REG - Revolution Bars - Interim Results
01/03/2022 07:00
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RNS Number : 1133D Revolution Bars Group 01 March 2022
1 March 2022
Revolution Bars Group plc (LSE: RBG)
Unaudited Interim results for the 26 weeks ended 1 January 2022
Positive outlook following continued investment in all brands
Revolution Bars Group plc ("the Group"), a leading UK operator of 67 premium
bars, trading predominantly under the Revolution and Revolución de Cuba
brands, today announces its unaudited interim results for the 26 weeks ended 1
January 2022.
Results to 1 January 2022
H1 FY22 H1 FY21 H1 FY20 H1 FY22 H1 FY21 H1 FY20
(IFRS 16) (IFRS 16) (IFRS 16) (IAS17) (IAS17) (IAS17)
£m £m £m £m £m £m
Total Sales 74.1 21.6 81.2 74.1 21.6 81.2
Operating Profit/(Loss) 6.7 (14.4) 1.0 4.1 (14.2) (3.5)
Adjusted(1) EBITDA 12.2 (1.2) 12.8 7.6 (5.8) 7.6
Profit/(Loss) Before Tax 4.3 (17.7) (1.6) 3.7 (14.7) (3.9)
Basic Profit/(Loss) Per Share 1.9p (15.7)p (2.9)p 1.6p (13.0)p (7.9)p
Net Cash/(Net Bank Debt)* 4.2 (21.0) (8.4) 4.2 (21.0) (8.4)
* "Net cash"/net bank debt is cash in bank less all drawings on the Revolving
Credit Facility ("RCF") and Coronavirus Large Business Interruption Loan
Scheme ("CLBILS") term loan
Key points
Encouraging trading when restriction free
· After restrictions were released on 19 July 2021, two weeks into
FY22, the Group enjoyed strong trading. Life-for-like2 ("LFL") sales between
then and 13 November 2021 were very strong at +14% ahead of the comparable
period in FY20 aided by the return of students, the return of office workers,
staycations and investment in our guest propositions;
· Overall, comparable LFL2 sales versus FY20 for the period from 19
July 2021 to 1 January 2022 remained positive at +1.4% despite the additional
restrictions imposed on our guests in the Christmas period, which was
reflected in LFL2 sales for the 6-week period ending 1 January 2022 of -23%;
· Despite the disappointing messaging by the Government around
Omicron, our bars performed admirably, and our sales teams have worked
tirelessly to rebook our corporate guests' Christmas parties into the next few
months; and
· Since "Plan B" restrictions ended, we have seen positive LFL2
sales versus FY20 of 6% in February, notwithstanding some ongoing restricted
trading in Scotland, Northern Ireland and Wales, taking the year to date LFL2
sales since Freedom Day on 19 July 2021 to 0.5%.
Robust results and stable financial position
· The Group has maintained a net cash position from 25 August 2021
through to the end of FY22 H1 due to positive cash generation from strong
sales;
· Adjusted1 EBITDA, as measured under IAS 17 inclusive of rental
charges, was £7.6 million, matching the £7.6 million adjusted1 EBITDA we
achieved in FY20 H1, the last period unaffected by COVID-19;
· We delivered profit before tax of £4.3 million in FY22 H1,
versus a loss of (£17.7) million in the comparative FY21 period, and a loss
of (£1.6) million in the comparative FY20 period;
· Successful net proceeds of £34.0 million from the FY21 equity
fundraisings, as well as positive cash generation from trade, have allowed the
enhanced refurbishment programme to begin in FY22, whilst also commencing new
site acquisitions;
· Capex of £2.4 million was spent in line with expectations in
FY22 H1 across four refurbishments, the new concepts, and other planned
capital expenditure. An additional five refurbishments have been completed in
FY22 so far, with 19 in total expected to be completed in FY22;
· We are pleased with current performance of the sites refurbished
so far, and confident they will achieve the two-year payback target we set for
refurbishments;
· The Hospitality industry has been significantly affected by
inflationary cost increases in areas such as employment, food, transportation
and energy, and as all meaningful Government support comes to an end in the
coming months we continue to monitor these cost pressures closely and take
action to mitigate wherever possible; and
· Net bank debt reduced from £21.0 million at the end of FY21 H1
to net cash of £4.2 million at the end of FY22 H1.
Investing in our brands, people and propositions
· Successful launch of two new concepts: Founders & Co., an
artisanal market-place experience now well established, and Playhouse, a
competitive socialising concept launched in November 2021 which continues to
deliver extremely encouraging results;
· First new bar lease signed since 2018, with two new openings
targeted this year and six next year, with a strong pipeline to achieve this;
· We launched the "Rev U" training academy, including new career
pathways for all operational roles. We also launched our first ever high
potential programme for General Managers, our Area Manager Development
programme and the "leading and inspiring teams" programme for our support
centre managers. In addition, we implemented a mentoring programme;
· The Group became an above-minimum wage paying employer to enable
us to attract and retain the best talent in the industry; and
· Our cocktail menu is now carbon neutral aided by the removal of
passionfruit which saves approximately 100 tonnes of carbon and provides a
significant reduction in waste, alongside our other industry-leading
initiatives.
Outlook
· After the release of trading restrictions under "Plan B" and the
positive news of the removal of COVID-passports in England, we are delighted
to have seen a return to strong LFL2 sales growth in February 2022;
· We are excited to see the confidence of our corporate guests to
rebook their postponed Christmas parties over the next few months, and look
forward to welcoming them back;
· Consumer confidence in visiting pubs, bars and restaurants is
also returning and is highest in our young guest base;
· Our strong approach to cost control is mitigating the impact of
inflationary pressures wherever possible;
· We believe that we are well positioned to continue to capitalise
on the favourable rental market;
· We continue to monitor the developing situation in Ukraine
however we expect any impact on our business to be limited; and
· Taking into account the above, despite the Government's response
to Omicron, which in our view was overly cautious and caused a substantial
loss of trade during the important festive season, the Board is now confident
of delivering adjusted1 EBITDA (on an IAS 17 basis) towards the top end of the
range of market expectations, which is currently between £8.0 and £10.0
million, assuming that the COVID-19 landscape does not significantly
deteriorate.
( )
(1 )Adjusted performance measures exclude exceptional items, share-based
payment charges and bar opening costs
(2 )Like-for-like (LFL) sales are same site sales defined as sales at only
those venues that traded in the same week in both the current year and
comparative reporting periods
(3) APM refers to Alternative Performance Measure being measures reported on
an IAS 17 basis
Rob Pitcher, Chief Executive Officer, said:
"We are hugely encouraged by the performance in FY22 H1 and are excited about
the future as we all now "learn to live" with COVID-19. We are emerging
strongly following a period of severe disruption and now believe that,
assuming no further variants, we can look forward to a sustained period of
growth.
We continue to urge the Government to support the recovery and rebuilding of
the hospitality industry by leaving VAT at 12.5% for food and non-alcoholic
beverages and retaining business rates relief at current levels, in-particular
maintaining the cap at £2.0 million, not reducing it to £110,000.
Demonstrating our renewed confidence, we have signed our first new lease since
2018, have a pipeline of opportunities, and several amazing refurbishments
taking place. There's never been a more exciting time for the Group."
Enquiries:
Revolution Bars Group plc Tel: 0161 330 3876
Rob Pitcher, CEO
Danielle Davies, CFO
FinnCap, NOMAD and Joint Broker Tel: 020 7220 0500
Matt Goode / Simon Hicks / Teddy Whiley (Corporate Finance)
Tim Redfern / Richard Chambers (ECM)
Peel Hunt LLP, Joint Broker Tel: 020 7418 8900
George Sellar / Andrew Clark
Instinctif (Financial PR) Tel: 07831 379122
Matt Smallwood
A presentation will be shared with analysts today and the presentation will be
made available on the Group's corporate website at www.revolutionbarsgroup.com
(http://www.revolutionbarsgroup.com) .
Chairman's Statement
Our business
At the end of the reporting period, the Group operated 67 premium bars with a
strong presence throughout the UK for its two original high-quality retail
brands: Revolution (47 bars), focused on young adults; and Revolución de Cuba
(18 bars), which attracts a broader age range, as well as our two new exciting
concepts, Founders & Co. (one bar) which welcomes families and adults
alike, and Playhouse (one bar) focused on fun-loving individuals. Most of the
Group's sales are derived from drink and food with some late-night admission
receipts driven by entertainment completing the sales mix, with further
diversification into other revenue streams via the new concepts.
Founders & Co., an artisanal market-place experience, delivered strong
sales over the festive period, showing the great position it has already built
in the Swansea community. We have also been very pleased with the launch of
Playhouse, our competitive socialising offering, which is attracting great
local interest in Northampton. We continue to monitor the new brands carefully
and support the teams as they continue to grow.
Following the successful equity fundraisings in FY21 and cash generation in
FY22 H1, I'm very pleased to say that we are emerging from the pandemic with a
strong balance sheet which allows us to refocus our resources on investing in
the existing estate to improve the underlying performance of the business, as
well as seeking expansion opportunities. We are in an excellent position to
grow the business, whether that is organically, or through acquisition of
single or small groups of sites.
We have continued to drive strategies in many key areas, making significant
headway in our Diversity and Inclusion ("D&I") agenda, as well as a real
focus on Wellbeing as our people faced unprecedented personal challenges
throughout the pandemic. We have made significant investments in
sustainability; our cocktail menu is now carbon neutral aided by the removal
of passionfruit which saves approximately 100 tonnes of carbon and provides a
significant reduction in waste.
Our results
Sales for the 26-week period of £74.1 million (FY21: £21.6 million) were
243.1% higher than the corresponding period in the prior year. After the first
two weeks of FY22, the Group was allowed to return to unrestricted trading and
saw significantly increased levels of trade. This is in comparison to FY21,
where the first half of the year was severely impacted by ongoing COVID-19
lockdowns, tiers and social distancing restrictions. We were very pleased to
see the performance comparable to FY20 H1, the last normal first-half-year of
trading prior to COVID-19, despite a challenging winter period due to Omicron.
Our profit before tax for the 26-week period of £4.3 million reflects a
return to more normal trading, whereas the equivalent period for FY21 was a
loss before tax of (£17.7) million following months of challenging
restrictions, as well as significant non-cash exceptional impairments
following the downturn in our trading expectations.
Adjusted(1) EBITDA, our preferred KPI, is significantly impacted by IFRS 16
and thus the Directors believe that business progress is best measured by the
directly comparable IAS 17 Alternative Performance Measures(3) ("APM") of
adjusted(1) EBITDA which was £7.6 million (2021: loss of (£5.8) million),
following a return to positive trading conditions and active cost mitigations.
This is in line with the adjusted(1) EBITDA of £7.6 million achieved in FY20
H1, the last comparable normal trading period.
When free to trade without the imposed COVID-19 restrictions, we are a highly
cash generative business. The Group has generated positive cashflows from
operating activities of £14.5 million in the 26-week period to 1 January
2022. These funds continue to support the business during periods of
uncertainty, and in achieving our enhanced refurbishment programme, with a
further focus on new sites and potentially acquisitions. As at FY22 H1-end,
the Group had cash in bank less all drawings on the Revolving Credit Facility
("RCF") and Coronavirus Large Business Interruption Loan Scheme ("CLBILS")
term loan ("net cash") of £4.2 million.
Current trading
As previously announced, Omicron had a severe impact on corporate guest
bookings over the festive period, with the "work from home" guidance
continuing the challenge into January. We were very happy to find many of our
corporate guests postponed, rather than cancelled, bookings into the new year,
and pleasingly many have already rebooked for the coming months and we look
forward to welcoming our guests back. We were pleased with the removal of
"Plan B" restrictions in late January, coupled with January's payday, where we
began to see our guests coming out in full numbers again.
We are of course aware that the risk of COVID-19 has not yet been eradicated,
and the Financial Review provides information on liquidity and going concern,
and also the full going concern disclosures, which include references to
material uncertainty, which can be found in note 1.
We continue to be excited with the return to normal trading; the Government
advice to "learn to live" with COVID-19 is positive, and we look forward to a
strong second half of the year. Following the recent announcement to remove
"Plan B" measures, we are very positive and confident of the future outlook
for the Group.
The market outlook and current trading and outlook are set out in more detail
in the Chief Executive Officer's statement.
Our People
The Group is led by an experienced and committed executive management team
with proven credentials in the industry, as well as a young, energised
workforce who are excited to return to delight guests. Throughout the pandemic
our people have shown a remarkable resilience and enthusiasm, delivering
excellent service and fun and memorable experiences in our bars for our
guests. I pay tribute to them and also to the senior management team and all
levels of management who have had to adapt to very different ways of operating
and leading.
Keith Edelman
Non-Executive Chairman
28 February 2022
(1 )Adjusted performance measures exclude exceptional items, share-based
payment charges and bar opening costs
(2 )Like-for-like (LFL) sales are same site sales defined as sales at only
those venues that traded in the same week in both the current year and
comparative reporting periods
(3) APM refers to Alternative Performance Measure being measures reported on
an IAS 17 basis
Chief Executive Officer's statement
Business review
FY22 began with a disappointing delay to "freedom day", which was moved from
21 June to 19 July 2021, meaning the first two weeks of the financial year
were impacted by ongoing social distancing restrictions. Once restrictions
were released, we were delighted with the strong sales performance seen across
our estate. As we had predicted, pent-up demand from our young guest base
helped drive a return to normality and we were very encouraged by the levels
of custom across the estate.
Restrictions on foreign travel continued to be beneficial in driving a strong
summer performance, with most people staying in the UK for a "staycation". We
were pleased with a continued extremely strong performance into the autumn
following the return of university students and office workers to towns and
cities.
Prior to the impact of Omicron, both Revolution and Revolución de Cuba were
in growth, with Revolution in particular driving the strong performance of the
Group. Enhancements to our brand propositions and a focus on delivering fun
and memorable experiences has helped to drive guests back into our bars.
Unfortunately, the Government's fear campaign regarding Omicron and "Plan B"
derailed festive trading, where corporate guests were discouraged from
fulfilling their large group bookings. The Group saw many bookings postponed
or cancelled due to the Government messaging, but we are now excited to
welcome these postponed guests back to us in the coming months.
Our first new concept, Founders & Co., launched at the end of FY21 and we
have seen it continue to grow with a particularly successful festive period.
Management at the location continue to solidify its position in the Swansea
community through a variety of exciting events. Our second new concept,
Playhouse, launched in November 2021, converting our existing Northampton
site. Playhouse has had a positive reception; the showstopping "Raceway" - a
remote control race track where the mini-asphalt can seat up to 10 players as
they speed their car around the exciting laps - opened in December and we
are very encouraged with the initial response from our guests and the local
media.
The challenge faced, with varying rules and restrictions, has been exacerbated
by the differing devolved nation rules, with highly disproportionate trading
between the devolved nations as a direct result of the ongoing restrictions in
Wales, Scotland and Northern Ireland. Approximately 15% of the Group's
business comes from these locations where restrictions were slower to lift in
the summer, and earlier to return in the autumn and winter. We look forward to
a full release of restrictions across the entirety of the United Kingdom as
soon as possible.
We are making good progress on our strategic priorities, despite the continued
distraction of COVID-19, with highlights including:
· Investing in our team:
o Became an above-minimum wage paying employer to enable us to retain and
attract the best talent in the industry;
o Diversity and Inclusion ("D&I") champions recruited from across the
entire workforce to set up a new D&I advisory Board; establishment of our
"Inclusion Revolution" Strategy, with data driven insight through our
partnership and research with "Wiser";
o Identified the key elements of our Wellbeing Strategy. Nominated Area
Wellbeing Champions to drive insight and inform actions in wellbeing focus
groups. Mental Health First Aid training for all managers across the business
as well as support centre colleagues;
o Launched the "Rev U" training academy, including new career pathways for
all operational roles. We also launched our first ever high potential
programme for our General Managers. We also introduced our Area Managers
Development programme, management level apprenticeships, and implemented a
mentoring programme;
o Highest ever participation rate in our Quality of Life survey, at 83% of
the staff population. Strong Engagement and our highest Employee Net Promoter
Score ("Employee NPS") score (32) since 2017, despite extremely challenging
trading conditions; and
o Enhanced our long service awards to demonstrate our commitment back to our
wonderful people and to celebrate their long-standing contributions to the
Group.
· Investing in our brands and guest experience:
o "Feed It Back" guest experience feedback platform launched across the
business, to harness even greater insights from our guests allowing us to
deliver the excellent experiences they expect;
o Continued investment in our digital capabilities, the urgency for which
became much greater in the last 18-24 months in order to operate effectively
under the imposed COVID-19 restrictions. Building on the success seen in FY21,
the Revolution App now has over one million registered users, up from 230,000
in February 2020; and
o Return of students to towns and cities saw greater attraction of
university clubs and societies, as well as the launch of new promotor-led
events which have been delivering very encouraging results.
· Investing in our estate:
o First new concept, Founders & Co., continues to build a strong local
reputation and deliver pleasing results;
o Successful launch of our second new concept, Playhouse. We are very
pleased with the initial responses to the site, furthered by the launch of the
"Raceway" on the top floor;
o Delivered four refurbishments in FY22 H1, and a further five in FY22 H2 to
date. We are pleased with current performance of the sites refurbished so far,
and confident they will achieve the two-year payback target we set for
refurbishments;
o First new bar lease signed since 2018, with two new openings targeted this
year and six next year, with a strong pipeline to achieve this; and
o Continued exciting developments in our industry-leading sustainability
programme: our cocktail menu is now carbon neutral aided by the removal of
passionfruit which saves approximately 100 tonnes of carbon and provides a
significant reduction in waste; the Group scored a B in Carbon Disclosure
Project ("CDP") reporting meaning Management are taking coordinated action on
climate issues and is better than the Bars, hotels & restaurants sector
average; ongoing investment in our carbon-reduction test site in Reading; and
our science-based targets are expected to be validated soon.
Our People
The last 18-24 months, dealing with the ever-changing restrictions and
enforced lockdowns, has taken its toll not just on our business but has had a
profound impact on our teams who have had to live with the reality of not
knowing when they would be allowed to carry out their chosen profession or be
placed into furlough. I've been truly humbled and amazed at their resilience
in standing firm in the face of such great adversity.
I'm proud of the fact that our core team stayed true to our values and
committed to the Group, helping us to not only navigate our way through the
tough times, which included huge recruitment challenges with Chefs and Door
Staff, but enabled us to emerge stronger and more engaged than pre-pandemic.
This is evidenced by our highest ever participation rate in our company-wide
employee survey which also delivered our highest employee net promoter score
and engagement level since 2017. I believe these outstanding results were
delivered via the numerous people-focused interventions we have put into the
business over the past two years, including our tailored induction programme,
our wellness strategy and our diversity and inclusion agenda.
I would like to take this opportunity to extend my thanks and gratitude to all
our colleagues for their continued efforts and positivity during the
challenges over the last 18-24 months. Their ability to create the fun and
memorable experience for our guests is second to none and I'm extremely
privileged to be able to lead such a great team.
Market outlook
When allowed to trade without restrictions, the Group has seen extremely
strong sales performance in FY22 H1 with high cash generation. We have been
pleased to see the Government now encouraging people to "learn to live" with
COVID-19 and are pleased to see that consumer confidence is returning with our
corporate guests rebooking their delayed Christmas parties and our young
guests excited to enjoy themselves in our bars.
We are also encouraged that our guest base is less impacted by the
cost-of-living pressures impacting the United Kingdom. Our young guests are
typically still living at home, university or renting and we see them continue
to choose to spend their cash on fun experiences in our bars.
We believe the property market is favourable at the moment, with many
hospitality venues having sadly become empty since the pandemic or still with
significant sums of unpaid rent still outstanding.
More fundamentally, the UK Government must recognise the urgent need to
introduce business rates reform; UKHospitality estimates the Hospitality
industry overpays £2.4bn each year; following the pandemic, which hit the
Hospitality industry particularly hard, there is undue pressure and expense on
heavily indebted businesses who are trying to rebuild. UK high streets are
seeing the effects of this dated and inefficient system, causing serious
unjust imbalances in the rates businesses are paying. We recognise an online
sales tax could be hard to implement, but just because something is difficult
doesn't mean it shouldn't happen, and we would welcome any reform which
alleviates this very serious problem causing undue burden and expense. We
would also encourage the Government to maintain the current reduced VAT of
12.5% for non-alcohol beverages and food to support the hard-hit Hospitality
industry.
We continue to monitor the developing situation in Ukraine however we expect
any impact on our business to be limited.
Current Trading and Outlook
After such a successful start to FY22, we were very disappointed by the impact
of the Government and devolved nations' response to Omicron and the impact
this had on consumer confidence. Following the lifting of "Plan B"
restrictions, which helpfully coincided with January pay-day, we have seen a
return to strong growth again and are pleased with the performance of the
refurbishments completed so far. After a successful summer of normal trade in
2021, we are very positive about the outlook with a return to unrestricted
trading. Door Staff recruitment challenges have subsided and are no longer
impacting trading. Some kitchen recruitment issues persist in particularly
challenging locations, which we continue to focus our efforts on resolving.
Our new concepts, Founders & Co. and Playhouse, are both performing well
and we're very encouraged by the early performance of Playhouse which is still
experiencing the excitement of a newly opened bar following the recent
introduction of its "Raceway" and continued positive local media around the
new offering. We have signed our first new bar lease since 2018, with two new
openings targeted this year and six next year, with a strong pipeline to
achieve this.
The Hospitality industry has been significantly affected by inflationary cost
increases in areas such as employment, food, transportation and energy, and as
all meaningful Government support comes to an end in the coming months I am
pleased with our continued rigorous approach to cost control which enables us
to mitigate wherever possible many of the cost pressures coming our way.
We are very pleased with the advancements in our brand offerings, D&I,
sustainability and the guest journey furthered in the year.
The Board is now confident of delivering adjusted EBITDA (on an IAS 17 basis)
towards the top end of the range of market expectations, which is currently
between £8.0 and £10.0 million, assuming that the COVID-19 landscape does
not significantly deteriorate.
Rob Pitcher
Chief Executive Officer
28 February 2022
Financial Review
Introduction
· The "H1 FY22" accounting period represents trading for the 26 weeks to 1
January 2022 ("the period"). The comparative period "H1 FY21" represents
trading for the 26 weeks to 26 December 2020 ("the prior period");
· The Group continues to offer comparative Alternative Performance
Measures(3) ("APM") of the numbers converted to IAS 17 following the
implementation of IFRS 16 in FY20. APM(3) for the current period are given
equal prominence in this review because, in the opinion of the Directors,
these provide a better guide to the underlying performance of the business;
· The results information therefore gives FY22 H1 IFRS 16 statutory numbers,
followed by APM(3) under IAS 17. A reconciliation between statutory and APM(3)
figures is provided in note 17;
· When considering the results for the period, it should also be noted that
sales over the Christmas period were heavily impacted by the move to "Plan B"
including the return to the "Work from Home" instruction, implementation of
Vaccine Passports for late night bars and Government messaging which
encouraged the limiting of social interactions resulting in a significant
impact on Christmas trade, all of which we are pleased to now see removed;
· When considering the results for the prior period it should be noted that
trade was severely impacted by ongoing COVID-19 lockdowns, tiers and social
distancing restrictions, and therefore we have also included a comparison to
FY20 H1, the last comparable period unaffected by COVID-19;
H1 FY22 H1 FY21 H1 FY20 H1 FY22 H1 FY21 H1 FY20
(IFRS 16) (IFRS 16) (IFRS 16) (IAS17) (IAS17) (IAS17)
£m £m £m £m £m £m
Total Sales 74.1 21.6 81.2 74.1 21.6 81.2
Operating Profit/(Loss) 6.7 (14.4) 1.0 4.1 (14.2) (3.5)
Adjusted(1) EBITDA 12.2 (1.2) 12.8 7.6 (5.8) 7.6
Profit/(Loss) Before Tax 4.3 (17.7) (1.6) 3.7 (14.7) (3.9)
Non-cash Exceptionals 0.0 (4.0) (4.2) 0.1 (2.8) (7.4)
Cash Exceptionals 0.0 (2.2) (0.2) 0.0 (2.4) (0.0)
Net Cash/(Net Bank Debt) 4.2 (21.0) (8.4) 4.2 (21.0) (8.4)
Results
The Group is very pleased to have seen a positive upturn in trading since
social distancing restrictions were lifted on 19 July 2021; this is in
comparison to FY21 where the first half of the year was severely impacted by
ongoing COVID-19 lockdowns, tiers and social distancing restrictions. The
Group has seen a significant increase in revenue in the year to £74.1 million
(2021: £21.6 million), 243.1% higher than the corresponding period, which
shows the level of disruption that lockdowns and restrictions created in FY21
H1.
The underlying result, as measured by our preferred APM(3) adjusted(1) EBITDA
(see note 17), was £13.4 million higher than the equivalent prior year
period, at a profit of £7.6 million (2021: loss of (£5.8) million). This is
our preferred metric as it is a proxy for the underlying cash available, in a
normal trading period, for investment, loan servicing and repayment, and for
distributing to shareholders in the form of dividends.
Gross profit in the year amounted to £57.8m (2021: £15.9 million) which
amounted to a gross margin of 78.0%, up from 73.3% in the equivalent prior
period. The increase in margin was in part due to a change in the mix of
products sold, with guests now able to enjoy late-night trading at higher full
price volumes. Lower discounts, particularly in our cocktail menu, and better
trading agreements also contributed to this improved margin.
FY20 H1 was the last equivalent normal period of trade, and we are excited to
have achieved the same APM(3) adjusted(1) EBITDA in FY22 H1 of £7.6 million
(2020: same). Revenue of £74.1 million was lower than FY20 H1 of £81.2
million due to challenging Christmas trading due to Omicron, but APM(3) profit
before tax was higher at £3.7 million (2020: loss before tax of (£3.9)
million) due to ongoing cost mitigations including rental savings.
Pleasingly, the Group ended its use of the Coronavirus Job Retention Scheme
("CJRS") early as the bars returned to normality. The final payment of
deferred VAT payments from the pandemic was made in January 2022. The
two-thirds reduction in business rates for the English Hospitality industry,
capped at £2.0 million, expires at the end of March 2022 and was therefore
applicable throughout the period. The reduction will result in an overall
£2.0 million saving for the Group in FY22, of which £1.3 million has been
recognised in FY22 H1. A further £0.5 million in rates savings relating to
the devolved nations has also been recognised in FY22 H1.
Underlying profitability
The Board's preferred profit measures are APM(3) adjusted(1) EBITDA and APM(3)
adjusted(1) pre-tax profit/(loss) as shown in the tables below. The APM(3)
adjusted(1) measures exclude exceptional items and charges/credits arising
from long-term incentive plans ("LTIPs").
26 weeks ended 26 weeks ended 53 weeks ended 26 weeks ended 26 weeks ended 53 weeks ended
1 January 26 December 2020 3 July 1 January 2022 26 December 2020 3 July 2021
2022
2021
APM(3) APM(3) APM(3)
IFRS 16
IAS 17 IAS 17 IAS 17
IFRS 16
£m IFRS 16
£m
£m
£m
£m
£m
Pre-tax profit/(loss) 4.3 (17.7) (26.3) 3.7 (14.7) (22.8)
Add back Exceptional items (0.0) 6.2 5.4 0.1 5.2 3.2
Add back LTIP (credit)/charge (0.0) 0.0 0.1 (0.0) 0.0 0.1
Adjusted(1) pre-tax profit/(loss) 4.3 (11.5) (20.8) 3.8 (9.5) (19.5)
Add back Depreciation 5.6 6.9 11.8 3.4 3.3 6.3
Add back Amortisation 0.0 0.0 0.0 0.0 0.0 -
Add back Finance costs 2.3 3.3 5.1 0.4 0.4 1.2
Adjusted(1) EBITDA 12.2 (1.2) (3.9) 7.6 (5.8) (12.0)
Exceptional items and accounting for long-term incentive plans
Exceptional items, by virtue of their size, incidence or nature, are disclosed
separately in order to allow a better understanding of the underlying trading
performance of the Group. The statutory exceptional credit position of £0.02
million has seen a significant reduction due to the high impairments in the
previous year as a result of COVID-19 on trade. The prior half-year charge of
£6.2 million included property restructure costs relating to the Revolution
Bars Limited Company Voluntary Arrangement ("CVA") of £2.2 million, an
impairment charge of £10.5 million, offset with a £6.5 million gain on
disposal as a result of surrendered leases.
Finance costs
Finance costs of £2.3 million (2021: £3.3 million) are made up £0.4 million
of bank interest paid on borrowings (2021: £0.4 million) and £1.9 million of
lease interest (2021: £2.9 million).
Liquidity
On 11 November 2021, the RCF was extended to 30 June 2023, and interest was
increased by 1.2% with a further up-to 1% chargeable if the RCF is drawn to
within £5.0 million of total limits. A new deleveraging method was also
agreed based on overperformance compared to the severe but plausible downside
case. The RCF also reduced to £16.3 million following £1.0 million of
amortisation in December 2021.
The original £16.5 million CLBILS loan is a three-year term loan expiring 5
July 2023, and the new £3.5 million CLBILS loan is a three-year term loan
expiring 9 May 2024. We would like to thank NatWest and our shareholders for
this support during the year.
The Company now has committed Facilities as follows:
RCF CLBILS Total
£m
£m £m
30 June 2022 16.3 14.8 31.1
31 December 2022 16.3* 14.3* 30.6*
30 June 2023 15.3* 13.8* 29.1*
( )* Facilities are due to deleverage after 30 June 2022 under the
overperformance deleverage agreement detailed above, meaning the facilities
will reduce further at this point based on overperformance of FY22 against the
severe but plausible downside case
Taxation
There is no tax payable in respect of the current period due to previous
losses made. Accordingly, the charge in the current year is £nil (2021:
£nil).
Earnings/(loss) per share
Basic earnings per share for the period was 1.9 pence (2021: loss (15.7)
pence). Adjusting for exceptional items, non-recurring opening costs and
credits arising from long-term incentive plans resulted in an adjusted(1)
earnings per share for the period of 1.9 pence (2021: loss of 12.0 pence).
Operating cash flow and net bank debt
The Group generated net cash flow from operating activities in the period of
£14.5 million (2021: utilised (£5.6) million), whilst capital expenditure
payments of £2.4 million, bank loan interest £0.4 million and loan
repayments of £0.5 million contributed to a net cash inflow in the period of
£7.3 million decreasing net bank debt from (£3.6) million as at 3 July 2021
to a net cash closing position of £4.2 million as at 1 January 2022.
Capital expenditure
The Group made capital investments of £2.4 million (2021: £1.0 million)
during the period; this was incurred entirely on the existing bars post
COVID-19, comprising building renovation works as part of the enhanced
refurbishment programme, as well as equipment replacement and IT investment.
Dividend
As notified previously, the Board has suspended payments of dividends.
Furthermore, (a) a condition of taking on the CLBILS facility is that the
Company is unable to pay a dividend whilst the CLBILS remains outstanding and
(b) as a result of the CVA referred to above, the Company's subsidiary entity,
Revolution Bars Limited, is unable to pay a dividend for a period of three
years until 13 November 2023. A restriction on the Group's principal trading
subsidiary being unable to make a dividend payment to its Parent Company may
significantly impact the Company's ability to make a dividend payment until
after 13 November 2023. There was no dividend paid or declared in either the
current or prior period.
Going concern
As reported in the Group Annual Report and Accounts 2021, the severe
disruption to the Group's trade during the last twelve months caused by
COVID-19 and the resultant and frequently changing operating restrictions
imposed by the UK Government and the devolved authorities indicates the
existence of a material uncertainty which may cast significant doubt over the
ability of the Group and Company to continue as a going concern.
This uncertainty is most definitely reduced following the release of
restrictions since 19 July 2021, but continues to exist whilst there is a risk
of further restrictions being imposed, such as the heightened Government
caution with Omicron that impacted December 2021 trading. Management remains
positive following the release of "Plan B" restrictions in January 2022,
alongside the scrapping of COVID-passports. The unpredictability of the
nature, extent and duration of COVID-19 and future variations, and the imposed
operating restrictions seen to date means that the uncertainty still exists.
How this will impact the Group's operational performance and in particular the
level of sales and EBITDA generated will in turn determine the Group's
covenant compliance.
As reported in the Group Annual Report and Accounts 2021 and reflected in
these interim financial statements, the Group took various actions to support
its liquidity including: two equity fundraisings securing a total of £34.0
million net proceeds; securing a total of £20.0 million Coronavirus Large
Business Interruption Loan Scheme ("CLBILS") term loans; and securing
committed total facilities (including the CLBILS) as at 31 December 2021 of
£32.6 million. As at the 26-weeks ended 1 January 2022, the Group had net
cash of £4.2 million.
Notwithstanding the material uncertainty, after due consideration the
Directors have a reasonable expectation that the Group has sufficient
resources to continue in operational existence for the period of 12 months
from the date of approval of these condensed financial statements.
Accordingly, the financial statements continue to be prepared on the going
concern basis. However, the circumstances noted above indicate the existence
of a material uncertainty which may cast significant doubt over the ability of
the Group to continue as a going concern. The financial statements do not
contain the adjustments that would arise if the Group were unable to continue
as a going concern.
Responsibility statement of the directors in respect of the half-yearly
financial report
We confirm that to the best of our knowledge:
• the condensed consolidated interim financial statements have been prepared
in accordance with IAS 34 Interim Financial Reporting, and
• the interim management report includes a fair review of the information
required by:
(a)DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an
indication of important events that have occurred during the first 26 weeks of
the financial year and their impact on the condensed set of financial
statements; and a description of the principal risks and uncertainties for the
remaining 26 weeks of the year; and
(b)DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related
party transactions that have taken place in the first 26 weeks of the current
financial year and that have materially affected the financial position or
performance of the entity during that period; and any changes in the related
party transactions described in the last annual report that could do so.
Danielle Davies
Chief Financial Officer
28 February 2022
(1 )Adjusted performance measures exclude exceptional items and share-based
payment charges and bar opening costs
(2 )Like-for-like (LFL) sales are same site sales defined as sales at only
those venues that traded in the same week in both the current year and
comparative reporting periods
(3) APM refers to Alternative Performance Measure being measures reported on
an IAS 17 basis
Revolution Bars Group plc
Condensed Consolidated Statement of Comprehensive Income
for the 26 weeks ended 1 January 2022
Note Unaudited Unaudited Audited
26 weeks ended
26 weeks ended
1 January
26 December 2020 53 weeks ended
2022 3 July
£'000 2021
£'000
£'000
Revenue 74,134 21,636 39,417
Cost of sales (16,289) (5,772) (11,352)
Gross profit 57,845 15,864 28,065
Operating expenses:
- operating expenses, excluding exceptional items (51,246) (24,059) (47,217)
- exceptional items 4 20 (6,221) (5,361)
- grant income 5 51 - 3,357
Total operating expenses (51,175) (30,280) (49,221)
Operating profit/(loss) 6,670 (14,416) (21,156)
Finance expense 6 (2,324) (3,292) (5,140)
Profit/(loss) before taxation 4,346 (17,708) (26,296)
Income tax 7 - - -
Profit/(loss) and total comprehensive income/(expense) for the period 4,346 (17,708) (26,296)
Earnings/(loss) per share:
- basic and diluted (pence) 9 1.9 (15.7) (21.2)
Dividend declared per share (pence) - - -
Revolution Bars Group plc
Condensed Consolidated Statement of Financial Position
at 1 January 2022
Note Unaudited Unaudited Audited
26 weeks 26 weeks 53 weeks
ended ended ended
1 January 26 December 3 July
2022 2020 2021
£'000 £'000 £'000
Assets
Non-current assets
Property, plant and equipment 10 33,455 35,554 33,945
Right-of-use assets 10 61,952 66,276 64,044
Intangible assets 28 20 24
95,435 101,850 98,013
Current assets
Inventories 3,616 2,787 2,956
Trade and other receivables 11 6,794 1,281 5,218
Cash and cash equivalents 19,446 4,593 12,118
29,856 8,661 20,292
Total assets 125,291 110,511 118,305
Liabilities
Current liabilities
Trade and other payables (25,296) (11,646) (20,361)
Lease liabilities 12 (5,666) (5,626) (5,143)
Provisions 13 (1,101) - (842)
(32,063) (17,272) (26,346)
Net current liabilities (2,207) (8,611) (6,054)
Non-current liabilities
Lease liabilities 12 (97,425) (103,191) (100,034)
Interest-bearing loans and borrowings 14 (15,251) (25,583) (15,751)
Provisions 13 (1,444) (1,004) (1,404)
(114,120) (129,778) (117,189)
Total liabilities (146,183) (147,050) (143,535)
Net liabilities (20,892) (36,539) (25,230)
Equity attributable to equity holders of the parent
Share capital 230 125 230
Share premium 33,794 14,050 33,794
Merger reserve 11,645 11,645 11,645
Accumulated losses (66,561) (62,359) (70,899)
Total equity (20,892) (36,539) (25,230)
Revolution Bars Group plc
Condensed Consolidated Statement of Changes in Equity
for the 26 weeks ended 1 January 2022
Reserves
Share Share Merger (Accumulated losses) / retained earnings Total
capital premium reserve £'000 equity
£'000 £'000 £'000 £'000
At 27 June 2020 50 - 11,645 (44,667) (32,972)
Loss and total comprehensive expense for the period - - - (26,296) (26,296)
Fundraising 180 33,794 - - 33,974
Charge arising from long-term incentive plans - - - 64 64
At 3 July 2021 230 33,794 11,645 (70,899) (25,230)
Profit and total comprehensive income for the period - - - 4,346 4,346
Credit arising from long-term incentive plans - - - (8) (8)
At 1 January 2022 230 33,794 11,645 (66,561) (20,892)
Revolution Bars Group plc
Condensed Consolidated Statement of Cash Flow
at 1 January 2022
Note Unaudited Unaudited
26 weeks 26 weeks Audited
ended ended 53 weeks ended
1 January 26 December 3 July
2022 2020 2021
£'000 £'000 £'000
Cash flow from operating activities
Profit/(loss) before tax from operations 4,346 (17,708) (26,296)
Adjustments for:
Net finance expense 6 2,324 3,292 5,140
Exceptional gain on disposal 4 - (6,538) (8,388)
Depreciation of property, plant and equipment 10 2,843 3,893 6,045
Depreciation of right-of-use assets 10 2,716 3,040 5,770
Impairment of property, plant and equipment 10 56 2,749 3,273
Impairment of right-of-use assets 10 - 7,816 8,315
Lease modification 12 (76) (17) (28)
Amortisation of intangibles 1 1 1
(Credits)/charges arising from long-term incentive plans 8 (8) 16 64
Operating cash flows before movement in working capital 12,202 (3,456) (6,104)
(Increase)/decrease in inventories (661) 807 637
(Increase)/decrease in trade and other receivables (1,576) 2,148 (2,908)
Increase/(decrease) in trade and other payables 4,220 (5,129) 4,859
Increase/(decrease) in provisions 299 (15) 1,228
Net cash flow generated from/(used in) operating activities 14,484 (5,645) (2,288)
Cash flow from investing activities
Purchase of intangible assets (5) (1) (5)
Purchase of property, plant and equipment 10 (2,409) (974) (2,038)
Net cash flow used in investing activities (2,414) (975) (2,043)
Cash flow from financing activities
Net proceeds from equity fundraising - 14,125 33,974
Interest paid 6 (411) (402) (1,133)
Lease surrender premiums paid - (1,250) (1,700)
Principal element of lease payments 12 (1,918) (1,954) (4,438)
Interest element of lease payments 12 (1,913) (2,890) (4,007)
Repayment of borrowings (500) (30,918) (52,749)
Drawdown of borrowings - 32,000 44,000
Net cash flow (used in)/from financing activities (4,742) 8,711 13,947
Net increase in cash and cash equivalents 7,328 2,091 9,616
Opening cash and cash equivalents 12,118 2,502 2,502
Closing cash and cash equivalents 19,446 4,593 12,118
Reconciliation of net bank debt
Net increase in cash and cash equivalents 7,328 2,091 9,616
Cash inflow from increase in borrowings - (32,000) (44,000)
Cash outflow from repayment of borrowings 500 30,918 52,749
Opening net bank debt (3,633) (21,998) (21,998)
Closing net cash/(net bank debt) 4,195 (20,989) (3,633)
Notes to the Half-yearly Financial Report
1. General information and basis of preparation
(a) General Information
Revolution Bars Group plc (the 'Company') is a company incorporated and
domiciled in the United Kingdom. Its Registered Office is at 21 Old Street,
Ashton-under-Lyne, OL6 6LA, United Kingdom. The Company's shares were admitted
to trading on the AIM market of the London Stock Exchange on 27 July 2020.
This half-yearly Financial Report is an interim management report as required
by DTR 4.2.3 of the Disclosure Guidance and Transparency Rules of the UK
Financial Conduct Authority (the 'FCA').
These condensed consolidated interim financial statements as at and for the 26
weeks ended 1 January 2022 comprises the Company and its subsidiaries
(together referred to as the "Group").
(b) Basis of preparation
The annual financial statements of the Group are prepared in accordance with
International Accounting Standards in conformity with the requirements of the
Companies Act 2006 ("IFRS").
The condensed consolidated interim financial statements of the Group for the
26 weeks ended 1 January 2022 have been prepared in accordance with IAS 34
Interim Financial Reporting. The condensed consolidated interim financial
statements do not include all the information and disclosures required in the
annual financial statements and should be read in conjunction with the Group's
financial statements for the 53 weeks ended 3 July 2021.
As required by the Disclosure Guidance and Transparency Rules of the FCA, the
condensed set of financial statements has been prepared applying the
accounting policies and presentation that were applied in the preparation of
the company's published consolidated financial statements for the 53 weeks
ended 3 July 2021.
The comparative figures for the 53 weeks ended 3 July 2021 are extracted from
the Company's statutory accounts for that period. Those accounts have been
reported on by the Company's auditor, filed with the Registrar of Companies
and are available on request from the Company's Registered Office or to
download from www.revolutionbarsgroup.com
(http://www.revolutionbarsgroup.com/) . The auditor's report on those accounts
was unqualified, did include a reference to any matters to which the auditor
drew attention by way of emphasis without qualifying their report, did include
a reference to a material uncertainty relating to going concern, and did not
contain any statement under sections 498 (2) or (3) of the Companies Act 2006.
New and amended standards adopted by the Group
A number of new or amended standards became applicable for the current
reporting period. The Group did not have to change its accounting policies or
make retrospective adjustments as a result of adopting these standards.
(c) Going concern
As reported in the Group Annual Report and Accounts 2021, the severe
disruption to the Group's trade during the last twelve months caused by
COVID-19 and the resultant and frequently changing operating restrictions
imposed by the UK Government and the devolved authorities indicates the
existence of a material uncertainty which may cast significant doubt over the
ability of the Group and Company to continue as a going concern.
This uncertainty is most definitely reduced following the release of
restrictions since 19 July 2021, but continues to exist whilst there is a risk
of further restrictions being imposed, such as the heightened Government
caution with Omicron that impacted December 2021 trading. Management remains
positive following the release of "Plan B" restrictions in January 2022,
alongside the scrapping of COVID-passports. The unpredictability of the
nature, extent and duration of COVID-19 and future variations, and the imposed
operating restrictions seen to date means that the uncertainty still exists.
How this will impact the Group's operational performance and in particular the
level of sales and EBITDA generated will in turn determine the Group's
covenant compliance.
As reported in the Group Annual Report and Accounts 2021 and reflected in
these interim financial statements, the Group took various actions to support
its liquidity including: two equity fundraisings securing a total of £34.0
million net proceeds; securing a total of £20.0 million Coronavirus Large
Business Interruption Loan Scheme ("CLBILS") term loans; and securing
committed total facilities (including the CLBILS) as at 31 December 2021 of
£32.6 million. As at the 26-weeks ended 1 January 2022, the Group had net
cash of £4.2 million.
Notwithstanding the material uncertainty, after due consideration the
Directors have a reasonable expectation that the Group has sufficient
resources to continue in operational existence for the period of 12 months
from the date of approval of these condensed financial statements.
Accordingly, the financial statements continue to be prepared on the going
concern basis. However, the circumstances noted above indicate the existence
of a material uncertainty which may cast significant doubt over the ability of
the Group to continue as a going concern. The financial statements do not
contain the adjustments that would arise if the Group were unable to continue
as a going concern.
2. Significant accounting policies
The accounting policies adopted in the preparation of the interim condensed
consolidated financial statements are consistent with those followed in the
preparation of the Group's annual financial statements for the 53 weeks ended
3 July 2021. These accounting policies are all expected to be applied for the
52 weeks to 2 July 2022.
Leases
Where the Company is a lessee, a right-of-use asset and lease liability are
both recognised at the outset of the lease. Each lease liability is initially
measured at the present value of the remaining lease payment obligations
taking account of the likelihood of lease extension or break options being
exercised. Each lease liability is subsequently adjusted to reflect imputed
interest, payments made to the lessor and any modifications to the lease. The
right-of-use asset is initially measured at cost, which comprises the amount
of the lease liability, plus lease payments made at or before the commencement
date adjusted by the amount of any prepaid or accrued lease payments, less any
incentives received to enter in to the lease, plus any initial direct costs
incurred by the Group to execute the lease, and less any onerous lease
provision. The right-of-use asset is depreciated in accordance with the
Group's accounting policy on property, plant and equipment. The amount charged
to the income statement comprises the depreciation of the right-of-use asset
and the imputed interest on the lease liability. The Company has utilised the
practical expedient to not assess whether rent waivers agreed as a result of
COVID-19 are lease modifications.
Items impacting Alternative Performance Measures
Exceptional items
Items that by virtue in their size, incidence or nature are disclosed
separately in the income statement. The separate reporting of these items
helps provide a more accurate indication of the Group's underlying business
performance, which the Directors believe would otherwise be distorted.
Exceptional items typically include impairments of property, plant and
equipment, bar closure costs, lease surrender costs, significant contract
termination costs including costs associated with making changes to the
Executive team and corporate Mergers and Acquisitions activity.
Share based payments
Charges/(credits) relating to share-based payment arrangements, while not
treated as an exceptional item, are adjusted for when arriving at adjusted
EBITDA on the basis that such amounts are non-cash, can be material and often
fluctuate significantly from period to period, dependent on factors unrelated
to the Group's underlying trading performance.
3. Key Risks
The directors believe that the principal risks and uncertainties faced by the
business are as set out below. Occurrence of any of these risks or a
combination of them may significantly impact the achievement of the Group's
strategic goals;
· COVID-19
· Supply chain
· Refurbishment and acquisition of sites
· Consumer demand and PR
· Health and safety
· Leasehold rent increases
· Supplier concentration
· National minimum/living wage legislation
The Group's operating environment is severely impacted by COVID-19, with the
continued uncertainty over future strains and potential imposed restrictions.
4. Exceptional items
Exceptional items, by virtue of their size, incidence or nature, are disclosed
separately in order to allow a better understanding of the underlying trading
performance of the Group. Exceptional (credits)/charges comprised the
following:
Unaudited Unaudited Audited
26 weeks 26 weeks 53 weeks
ended ended ended
1 January 26 December 3 July
2022 2020 2021
£'000 £'000 £'000
Administrative expenses:
- impairment of right of use assets - 7,816 8,315
- impairment of property, plant and equipment 56 2,749 3,273
- lease modification (76) (17) (28)
- gain on disposal - (6,538) (8,388)
- property restructure - 2,211 2,189
Total exceptional items (20) 6,221 5,361
Following the implementation of IFRS 16, impairment reviews now include
right-of-use assets relating to leases. The net book value of property, plant
and equipment at nine of the Group's bars (FY21-end: 30) was written down.
There was no impairment on right-of-use assets (FY21-end: 31 bars). The
significant reduction in the non-cash impairment charge is predominantly a
reflection of the large impairments that have occurred in previous years due
to the impact of COVID-19 on trade.
In the prior year, the exceptionals were impacted by a gain on disposal in
respect of surrendered leases as a result of extinguishing the remaining IFRS
16 lease liability, and is net of surrender premiums paid and other relevant
exceptional closure costs. Furthermore, a Company Voluntary Arrangement
('CVA') was undertaken by the Group's wholly owned subsidiary entity,
Revolution Bars Limited. The Property Restructure costs predominantly
comprised the associated CVA professional fees, alongside other legal and
professional costs incurred through landlord negotiations and the relevant
closure costs of the affected sites.
5. Grant income
Unaudited Unaudited Audited
26 weeks 26 weeks 53 weeks
ended ended ended
1 January 26 December 3 July
2022 2020 2021
£'000 £'000 £'000
Local authority grants 51 - 3,357
51 - 3,357
The Government have provided various Local Authority grants to support the
hospitality industry, particularly for periods of closure or severe
restrictions. This income has been recognised as Other Income within operating
profit/(loss).
6. Finance expense and income
Unaudited Unaudited
26 weeks 26 weeks Audited
ended ended 53 weeks
1 January 26 December ended
2022 2020 3 July
£'000 £'000 2021
£'000
Interest payable on bank loans and overdrafts 411 402 1,133
Interest on lease liabilities 1,913 2,890 4,007
Interest payable 2,324 3,292 5,140
7. Taxation
The taxation charge for the 26 weeks ended 1 January 2022 has been calculated
by applying an estimated effective tax rate for the 52 weeks ending 2 July
2022. Due to brought-forwards tax losses, no tax was due for the half-year
period. Due to the continued uncertainty over COVID-19, there was no deferred
tax charge or credit to the income statement.
8. Share-based payments
Unaudited Unaudited Audited
26 weeks 26 weeks 53 weeks
ended ended ended
1 January 26 December 3 July
2022 2020 2021 £'000
£'000 £'000
(Credit)/charge in the period (8) 45 94
Credit relating to forfeitures in period - (29) (30)
Total (credit)/charge arising from long-term incentive plans (8) 16 64
The Group currently operates an employee share incentive scheme, namely The
Revolution Bars Group Share Plan. Awards under the scheme comprise:
· a Nominal Cost Option ("NCO") granted to acquire ordinary shares
in the Company at an option price of 0.1 pence per share; and
· a linked, tax-favoured Company Share Option ("CSOP") granted
under Part II of The Revolution Bars Group Share Plan to acquire a number of
ordinary shares in the Company. The option price is set at the market value of
the shares at the time of the award.
The Group issued 1,311,528 options under a Restricted Share Award scheme on 24
December 2020, and a further 4,155,290 options under a Restricted Share Award
scheme on 23 November 2021.
9. Earnings/(loss) per share
The calculation of loss per ordinary share is based on the results for the
period, as set out below:
Unaudited Unaudited Audited
26 weeks 26 weeks 53 weeks
ended ended ended
1 January 26 December 3 July
2022 2020 2021
£'000 £'000 £'000
Profit/(loss) for the period (£'000) 4,346 (17,708) (26,296)
Weighted average number of shares - basic and diluted ('000) 230,049 113,093
124,075
Basic and diluted profit/(loss) per ordinary share (pence) 1.9 (15.7)
(21.2)
A calculation of adjusted earnings per ordinary share is set out below:
Unaudited Unaudited Audited
26 weeks 26 weeks 53 weeks
ended ended ended
1 January 26 December 3 July
2021 2020 2021 £'000
£'000 £'000
Profit/(loss) on ordinary activities before taxation 4,346 (17,708) (26,296)
Exceptional items (20) 6,221 5,361
Share-based payments (8) 16 64
Adjusted profit/(loss) on ordinary activities before taxation 4,318 (11,471) (20,871)
Taxation on ordinary activities - - -
Taxation on exceptional items 4 (2,078) (2,600)
Adjusted profit/(loss) of ordinary activities after taxation 4,322 (13,549) (23,471)
Basic and diluted number of shares ('000) 230,049 113,093 124,075
Adjusted basic and diluted earnings/(loss) per ordinary share (pence) 1.9 (12.0) (18.9)
10. Property, plant and equipment and right-of-use assets
Property, plant and equipment Freehold land and buildings Short leasehold premises Fixtures and fittings IT equipment and office furniture Total
£'000 £'000 £'000 £'000 £'000
Cost
At 27 June 2020 1,426 82,740 56,246 8,891 149,303
Additions - 1,133 641 264 2,038
Transfers - 15 - - 15
At 3 July 2021 1,426 83,888 56,887 9,155 151,356
Additions - 793 1,198 418 2,409
At 1 January 2022 1,426 84,681 58,085 9,573 153,765
Accumulated depreciation and
impairment
At 27 June 2020 (1,216) (50,752) (48,280) (7,833) (108,081)
Depreciation charges - (3,238) (2,282) (525) (6,045)
Impairment charges - (2,750) (465) (58) (3,273)
Transfers - - (6) (6) (12)
At 3 July 2021 (1,216) (56,740) (51,033) (8,422) (117,411)
Depreciation charges - (1,565) (1,033) (245) (2,843)
Impairment charges - (30) (25) (1) (56)
At 1 January 2022 (1,216) (58,335) (52,091) (8,668) (120,310)
Net book value
At 1 January 2022 210 26,346 5,994 905 33,455
At 3 July 2021 210 27,148 5,854 733 33,945
Right-of-use assets - Group Bars Vehicles Total
£'000 £'000 £'000
Cost
At 3 July 2021 105,269 418 105,687
Reassessment/modification of assets previously recognised 624 - 624
At 1 January 2022 105,893 418 106,311
Accumulated depreciation and impairment
At 3 July 2021 (41,318) (325) (41,643)
Depreciation charges (2,652) (64) (2,716)
Impairment charges - - -
At 1 January 2022 (43,970) (389) (44,359)
Net book value
At 1 January 2022 61,923 29 61,952
At 3 July 2021 63,951 93 64,044
Depreciation and impairment of property, plant and equipment and right-of-use
assets are recognised in operating expenses in the consolidated statement of
profit or loss and other comprehensive income.
The Group has determined that for the purposes of impairment testing, each bar
is a cash generating unit ("CGU"). The bars are tested for impairment in
accordance with IAS 36 "Impairment of Assets" when a triggering event is
identified. The recoverable amounts for CGUs are predominantly based on value
in use, which is derived from the forecast cash flows generated to the end of
the lease term discounted at the Group's weighted average cost of capital.
Impairment testing methodology
At the end of each reporting period, a filter test is used to identify whether
the carrying value of a CGU is potentially impaired. This test compares a
multiple of run rate EBITDA, adjusted for an allocation of central overheads,
to the carrying value of the CGU. If this test indicates a potential
impairment, a more detailed value in use review is undertaken using cash flows
based on Board-approved forecasts covering a three-year period. These
forecasts combine management's understanding of historical performance and
knowledge of local market environments and competitive conditions to set
realistic views for future growth rates. Cash flows beyond this three-year
period are extrapolated using a long-term growth rate to the end of the lease
term. The cash flows assume a 5-year refurbishment cycle, with an increase in
revenue factored after refurbishments based on historical refurbishment
outcomes.
The key assumptions in the value in use calculations are typically the cash
flows contained within the Group's trading forecasts, the long-term growth
rate and the risk-adjusted pre-tax discount rate.
11. Trade and other receivables
Unaudited Unaudited
26 weeks 26 weeks Audited
ended ended 53 weeks
1 January 26 December ended
2022 2020 3 July
£'000 £'000 2021
£'000
Amounts falling due within one year
Trade and other receivables 2,956 726 1,896
Accrued rebate income 824 64 720
Prepayments 3,014 (389) 2,469
Other debtors - 880 133
6,794 1,281 5,218
12. Lease liabilities
Short leasehold properties Vehicles Total
£'000 £'000 £'000
At 3 July 2021 105,079 98 105,177
Reassessment/modification of liabilities previously recognised 76 - 76
Modifications taken as a credit to administrative expenses (note 4) (76) - (76)
Lease liability payments (3,763) (68) (3,831)
Lease concessions (168) - (168)
Finance costs 1,912 1 1,913
At 1 January 2022 103,060 31 103,091
The reassessment/modification of leases relates to re-gears on existing
leases, where the terms of the lease have been changed such as an extension or
change to rental amount.
The lease liability cash payments in the year comprise interest of £1.9
million and principal of £1.9 million. £5.7 million of the net present value
of lease liabilities, net of interest, are current, and £97.4 million are
non-current.
13. Provisions
The dilapidations provision relates to a provision for dilapidations due at
the end of leases. The Group provides for unavoidable costs associated with
lease terminations and expiries against all leasehold properties across the
entire estate, built up over the period until exit. Other provisions include
provisions for various COVID-19 related items. Dilapidation provisions are
expected to be utilised over the next 5-15 years as leases come to an end.
Other provisions Dilapidations Total provisions
provision
£,000 £'000 £'000
At 3 July 2021 842 1,404 2,246
Movement on provision 307 40 347
Utilisation of provision (48) - (48)
At 1 January 2022 1,101 1,444 2,545
Unaudited Unaudited
26 weeks 26 weeks Audited
ended ended 53 weeks
1 January 26 December ended
2022 2020 3 July
£'000 £'000 2021
£'000
Current 1,101 - 842
Non-current 1,444 1,004 1,404
2,545 1,004 2,246
14. Interest-bearing loans and borrowings
Unaudited Unaudited
26 weeks 26 weeks Audited
ended ended 53 weeks
1 January 26 December ended
2022 2020 3 July
£'000 £'000 2021
£'000
Revolving credit facility - 9,500 -
Coronavirus Large Business Interruption Loan Scheme 15,251 16,083 15,751
15,251 25,583 15,751
As at the date of the consolidated financial position, the Group had an
undrawn revolving credit facility (the "Facility") of £17.3 million expiring
in June 2023, and £15.3 million remaining of Coronavirus Large Business
Interruption Loan Scheme ("CLBILS") loans. The CLBILS is a three-year
amortising loan which expires in July 2023 and May 2024.
The Facility and the CLBILS are secured and supported by debentures over the
assets of Revolution Bars Group plc, Revolución De Cuba Limited, Revolution
Bars Limited, Revolution Bars (Number Two) Limited and Inventive Service
Company Limited, and an unlimited guarantee.
15. Dividends
No dividend in respect of the interim reporting period is being declared. No
interim or final dividend was declared in respect of the 53 weeks ended 3 July
2021.
16. Capital Commitments
There were £nil capital commitments as at 1 January 2022 (at 3 July 2021:
£nil).
17. Alternative Performance Measures - Adjusted EBITDA - Non-IFRS 16 Basis
The Board's preferred profit measures are Alternative Performance Measures
("APM") adjusted EBITDA and APM adjusted pre-tax loss, as shown in the tables
below. The APM adjusted measures exclude exceptional items, bar opening costs
and charges/credits arising from long term incentive plans. Non-GAAP measures
are presented below which encompasses adjusted EBITDA on an IFRS 16 basis:
26 weeks 26 weeks 53 weeks ended
ended 1 January
ended 26 December 2020
3 July
2022 £'000
2021
£'000
£'000
Non-GAAP measures
Revenue 74,134 21,636 39,417
Operating profit/(loss) 6,670 (14,416) (21,156)
Exceptional items (20) 6,221 5,361
(Credit)/charge arising from long-term incentive plans (8) 16 64
Adjusted operating profit/(loss) 6,642 (8,179) (15,731)
Finance expense (2,324) (3,292) (5,140)
Adjusted profit/(loss) before tax 4,318 (11,471) (20,871)
Depreciation 5,559 6,933 11,815
Amortisation 1 1 1
Finance expense 2,324 3,292 5,140
Adjusted EBITDA 12,202 (1,245) (3,915)
The below table reconciles from the statutory non-GAAP adjusted EBITDA to the
APM formats, which translates to a pre-IFRS 16 basis by inputting the rental
charge and other relevant adjustments.
26 weeks ended 1 January 2022 Reduction Reduction Onerous lease provision interest Rent charge 26 weeks ended 1 January 2022
in depreciation in
interest
IFRS 16 IAS 17
£'000 £'000 £'000 £'000 £'000 £'000
Adjusted profit before tax 4,318 2,198 1,913 (26) (4,626) 3,777
Depreciation 5,559 (2,198) - - - 3,361
Amortisation 1 - - - - 1
Finance expense 2,324 - (1,913) 26 - 437
Adjusted EBITDA 12,202 - - - (4,626) 7,576
53 weeks ended 3 July 2021 Reduction Reduction Onerous lease provision interest Rent charge 53 weeks ended 3 July 2021
in depreciation in
interest
IFRS 16 IAS 17
£'000 £'000 £'000 £'000 £'000 £'000
Adjusted loss before tax (20,871) 5,497 4,007 (37) (8,124) (19,528)
Depreciation 11,815 (5,497) - - - 6,318
Amortisation 1 - - - - 1
Finance expense 5,140 - (4,007) 37 - 1,170
Adjusted EBITDA (3,915) - - - (8,124) (12,039)
The APM profit measures have been prepared using the reported results for the
current period and replacing the accounting entries related to IFRS 16 Leases
with an estimate of the accounting entries that would have arisen when
applying IAS 17 Leases. The effective tax rate has been assumed to be
unaltered by this change. Impairment assumptions have been re-geared for an
IAS 17 perspective, and the onerous lease provision movement has been
included.
The APM profit measures see a large reduction in depreciation due to the
non-inclusion of IFRS 16 depreciation on the right-of-use assets, and
similarly non-inclusion of the finance expense of interest on lease
liabilities. The operating loss is impacted by the inclusion of rent
expenditure from the income statement and inclusion of the onerous lease
provision. Exceptionals are significant impacted by the change in impairment,
gain on disposals recognised under IFRS 16, and the classification of certain
cash closure exceptionals.
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