Revolution Bars’ shares tumble after rail strikes disrupt Christmas sales
Revolution Bars has seen its share price fall by over a quarter on Tuesday after revealing that its crucial Christmas trading period was hampered by rail strikes and the cost-of-living crisis.
The pub and bar operator, who trade through the Revolution, Revolucion de Cuba and Peach Pub brands, said that customer confidence took a hit as rail strikes disrupted the week commencing December 11, what is usually the group’s busiest week of the year.
As a result, Revolution says its walk-in revenue was lower than previous years, with an impact on group sales. Group like-for-like sales, when compared to the same period in 2019, the last Christmas period not affected by Covid, were down by 9%.
This performance was despite strong numbers of corporate bookings reflecting an increase in confidence. This led to a rise in like-for-like sales for the five weeks to 31 December by 17.3% against 2021. However, the comparative period was affected by widespread disruption due to the prevalence of the Omicron variant.
As a consequence of the impact of the critical Christmas period, Revolution’s board has reassessed its expectations for its 2023 financial outturn, assuming that industrial action subsides, energy prices hold at their current levels and taking into account various mitigating actions being undertaken, including some Revolution and Revolucion de Cuba closing on Mondays and Tuesdays in January and February to save on energy costs.
Revolution now expects its earnings for the year are likely to be lower than previously anticipated, estimated to be in the range of £6.7m-£10.5m, and has issued a profit warning.
Rob Pitcher, CEO 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 group intends to publish its Interim Results for the first half on 7 March 2023.