SHARES in Revolution Bars closed the day down more than 50% after the high-street hospitality operator declared it is “actively exploring all the strategic options available to it” in a bid to turn around its fortunes, including putting itself up for sale.
The company, which owns the Revolution, Revolucion de Cuba, and Peach Pubs brands, told the City that options under consideration “include a restructuring plan for certain parts of the group, a sale of all or part of the group and any other avenue to maximise returns for stakeholders”.
It also revealed that it was holding talks with stakeholders and investors, including high-profile hospitality entrepreneur Luke Johnson, over a potential fundraising.
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The update came in response to press speculation that Revolution was considering the sale of around 20 of its worst-performing venues, equating to about one-quarter of its estate, and holding talks with investors over fundraising and hoisting the for-sale sign above the business. Closures of this magnitude would affect a significant number of jobs, Sky News reported on Monday.
Revolution denied yesterday that it had held talks with or received an approach from “any potential offeror” concerning the acquisition of the business.
The company’s struggles come as the hospitality industry continues to come under pressure from an ongoing inflation crisis, which has ramped up the cost of energy, food, drink insurance and labour, while consumers have faced a cost of living crisis. Some in the industry have been expressing concern over the impact of next month’s increase in the national minimum wage.
Revolution issued a profit warning in January, citing concerns over inflation and the “material" increase in costs that the rise in minimum wage will bring, despite reporting strong trading over Christmas.
It also cast doubt on whether the forthcoming rise in minimum wage will lead to “increased discretionary spend for our Revolution guests in particular”.
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Revolution, which floated on the stock market for the second time in 2015, said in a statement to the stock market: “Revolution Bars Group PLC notes recent press speculation. Following a period of external challenges which have impacted the company’s business and trading performance, the board is actively exploring all the strategic options available to it to improve the future prospects of the group. These include a restructuring plan for certain parts of the group, a sale of all or part of the group and any other avenue to maximise returns for stakeholders.
“The company also confirms it is currently engaged with key shareholders and other investors including Luke Johnson in respect of a fundraising. The company continues to trade in line with management’s expectations. Further announcements will be made, as appropriate.”
Revolution added: “The company is not in talks with, nor in receipt of an approach from, any potential offeror relating to an acquisition of the issued and to be issued share capital of the company.”
Shares in Revolution Bars closed down 51.72%, or 1.5p, at 1.4p.
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