By Scott Wright

REVOLUTION Bars Group saw 25 per cent wiped from its stock market value yesterday after the leisure operator issued a profit warning, citing the impact of rail strikes and the cost-of-living crisis during the crucial Christmas period.

The company, which has 90 outlets trading under the Revolution, Revolucion de Cuba and Peach Pub brands, said uncertainty over rail service reliability and strike action combined with consumer money worries to undermine footfall.

It meant that walk-in revenue in the week starting December 11 – traditionally the operator’s busiest week of the year – was lower than in previous years, while like-for-like sales were 9% down versus the same period in December 2019, the last festive trading period that was unaffected by Covid restrictions.

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The company is now forecasting profits will be lower than previously anticipated, and has decided to close a number of Revolution and Revolucion de Cuba outlets at certain times this month and next to save on energy costs.

The update from Revolution came shortly after C&C Group, owner of Tennent’s Lager, cited the impact of rail strikes when it issued a profit warning on Friday. C&C referenced figures from hospitality analyst CGA that highlighted a sharp rise in booking cancellations and reduction in “walk-ins” over the festive period.

The combination of travel woe and cost of living concerns in the build-up to Christmas cited by Revolution came as it reported a 17.3% rise in like-for-like sales over the five weeks to December 31, compared with the same period in 2021.

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Revolution said the rise was driven by strong corporate party bookings that reflected a return in confidence, with pre-booked party business up 10.3% on 2019. However it noted that the comparative period the year before had been impacted by the Omicron outbreak.

Revolution reported that like-for-like sales were 9.4% down over the 26 weeks ended December 31 compared with the same period in 2019. It said the fall reflected the impact of record temperatures on the group’s Revolution and Revolucion De Cuba brands, rail travel disruption and the effect of the poor economic outlook on consumer confidence. But it highlighted a positive performance by Peach Pubs since its acquisition in October, with sales at the chain 9.9% ahead of 2019. Revolution acquired the 21-strong, food-led Peach group in a cash deal worth £16.5m.

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In light of the challenges it encountered at Christmas, bosses at Revolution said yesterday that profit expectations have been downgraded for the full year. Directors now expect profits to be at the bottom end of the £6.7m to £10.5m range forecast, “assuming that industrial action subsides, energy prices hold at current levels and taking into account various mitigating actions being undertaken.” Mitigations include closing some outlets on Mondays and Tuesdays in January and early February to help with energy costs.

Rob Pitcher, chief executive of Revolution Bars Group, said: “The first Christmas since 2019 without the shadow of Covid, saw a new company record for pre-booked party revenue allowing us to be optimistic of a strong Christmas period. However, the continued train strikes had a material impact on whether guests attended their office Christmas parties, how long they stayed and whether they met up with friends on a separate occasion.

“Given the current economic environment, the coming months are going to be challenging and uncertain, not only for us, but for many businesses. We are not immune to this.

“The board have reviewed their expectations for the full year, taken a number of actions to mitigate the external factors where possible, and will continue to track these closely.

“The decision to close some bars on a Monday and Tuesday in the early weeks of the year allows us to minimise energy usage in our quietest period whilst also allowing our teams to recover after the busy Christmas period.

“I am again proud of our team’s resilience during this disrupted Christmas and New Year period, and know that they have loved, as have I, seeing our guests enjoying themselves.”

Shares in Revolution Bars Group closed down 1.9p at 5.5p.