Revolution Bars Group, which operates 77 bars under the Revolution and Revolución de Cuba brands, has today announced business has “stabilised”, despite losses having widened.
The Ashton-under-Lyne-headquartered group reported loss before tax increased to £5.6m, up from £3.6m in 2018, in its preliminary results for the year ended June 29.
Adjusted EBITDA was at £11.1m for the year, a contraction from £15m in 2018, while adjusted profit before tax was £3m, down from £8m in 2018.
However, sales at the group increased by 6.7 per cent to £151.4m, up from £141.9m the year previous.
The group said “considerable progress” had been made in 2019, which is said was “a year of transition”.
Rob Pitcher, the group’s CEO, said: “A return to positive like-for-like sales in Q1 of the current year reflects the hard work by the team in stabilising the business.”
The group said like-for-like sales at the end of the 2019 financial year grew, while like-for-like sales in five of the last seven weeks of FY20 Q1 were up 0.7 per cent.
Mr Pitcher continued: “We will invest in our team, our brand experience and our estate to continue to improve performance.
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“Our progress demonstrates that our business is delighting our guests, and is both profitable and cash generative.
“We will utilise surplus cash to reduce debt to such an extent whereby any return to expansion of the estate will be self-funding.”
Looking forward, the group said it was entering into a year of consolidation, with a focus on building on improvements, investing in existing estate and reducing bank borrowings.
Mr Pitcher said the group “will seek to consolidate our improved performance through investment in our people, our guest experience and by revitalising the Revolution brand and the business as whole”.
He said: “Our performance is set against a very challenging macro-economic and politically uncertain trading environment for the whole sector and specifically the ‘high street’ which has suffered with both the ongoing, widely publicised, cost headwinds and the impact of closures in the casual dining sector.
“While we are cognisant of the challenges this trading environment presents, we have remained focused on the delivery of our three-year turnaround plan.
“Having stabilised the business, we are now transitioning into a year of consolidation ahead of returning to expansion in financial year 2021.”
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The group said its refurbishment of its flagship Revolucion de Cuba in Manchester, along with five other bars, was showing an “encouraging sales uplifts in their first few weeks of trading”.
The Group’s chairman said Keith Edelman added: “We are profitable, cash generative and are focused on further reducing debt to less than one times adjusted EBITDA, at which time we expect to be able to recommence expansion on a self- funded basis.
“I am confident that the changes in operational personnel and the actions and work-streams initiated in the last twelve months under Rob Pitcher’s guidance will drive improved performance and a better business.”