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Revolution Bars, the operator of 73 bars and food outlets in the UK, has launched a company voluntary arrangement to close a number of bars and reduce rents after its revenues have collapsed due the coronavirus.
The group said that comparable venue sales in the 8 weeks from when it commenced the reopening of its bars on 4 July 2020 through to 29 August 2020 were down 27.5%.
In the subsequent three weeks, comparable venue sales remained buoyant at 77.8% of last year, but in the last five weeks to 24 October 2020 have slumped to just 49.4% due to the imposition of the 10pm curfew and more recently localised lockdowns, with more severe operating restrictions now affecting many of the group’s reopened bars.
It stated: “Given the latest Government restrictions under which the Group is operating, the Group’s trading outlook is uncertain and based on all the information and commentary available, the board now anticipates that the important Christmas trading period will be severely compromised and any return to near normal levels will not be possible before next Spring at the very earliest.”
As a result of the uncertain trading outlook and macro-economic environment it has launched a CVA for its 50 Revolution branded bars.
The CVA proposes to reduce the size of its Revelution estate by 6 bars and reduce its rental cost base, thereby improving the profitability and return on capital of the group over the long-term.
It has identified 13 trading sites that are either significantly underperforming due to their location and local trading conditions, significantly over-rented or not expected to generate future profitable returns going forward.
Revolution expects to exit six bars and obtain materially improved rental terms on seven others.
CEO Rob Pitcher commented: “Throughout this extended period of distress caused by COVID-19, the Group has sought to prioritise the health and well-being of its staff and customers, minimise its cash consumption, maintain good levels of liquidity to ensure its ongoing viability and to be in a position to take advantage of opportunities that may arise once restrictions are lifted.
“The CVA proposed by the Group’s Revolution Bars Limited subsidiary entity, if agreed by landlords, is another proactive step to lower outgoings to help safeguard the future of the Group and improve long-term performance.”
Morning update
On the markets this morning, the FTSE 100 has dropped a further 0.2% to 5,778.3pts.
Risers include McColl’s, up 4.1% to 21.9p, Bakkavor, up 2.8% to 61.7p and Marston’s, up 2.3% to 52.6p.
Fallers include Science in Sport, down 3.1% to 31.5p, Glanbia, down 1.8% to €8.14 and Cranswick, down 1.7% to 3,326p.
Yesterday in the City
The FTSE 100 started the week down 1.2% to 5,792pts.
Fallers yesterday included food to go exposed companies, such as Nichols, down 5.6% to 1,010p, Compass Group, down 4.8% to 1,095p, SSP Group, down 4.6% to 185.5p, Greencore, down 4.2% to 96.2p, Bakkavor, down 3.9% to 60p.
Other fallers included DS Smith, down 3.2% to 286p, Marks & Spencer, down 2.7% to 95.2p, Just Eat Takeaway.com, down 2.2% to 8,972p and Ocado, down 2.3% to 2,260p.
The day’s risers included McColl’s, up 5% to 21p, FeverTree, up 4% to 2,285p, Domino’s Pizza Group, up 3.6% to 329.6p, Finsbury Food Group, up 3.3% to 54p and Naked Wines, up 1.5% to 482p.
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