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Fri 24th Jun 2016 - Horizons' foodservice Brexit warning, Revolution eyes four Edinburgh bars for new brand in £16m deal
Horizons – foodservice sector will be ‘less buoyant than it otherwise would have been’ following Brexit: Peter Backman, managing director of foodservice consultancy Horizons, has said the foodservice sector will be “less buoyant than it would otherwise have been” following the UK’s decision to leave the EU. He said: “The UK economy will now face a period of uncertainty, which is likely to be intense over the next few days and weeks, but will be ongoing for five years or so as Britain finds its new way in the world. Notably for foodservice, the pound will remain volatile and will trade at lower rates than over the last few years. Consumer sentiment will probably remain depressed, costs will be elevated, and there will be some uncertainty over employment because of our reliance on European labour. The foodservice sector will be less buoyant than it would have otherwise been – but the impact is likely to be felt differently in different areas of the business. Sectors that could benefit include tourism-related business including hotels and leisure, while restaurants, quick-service restaurants and pubs could lose out. However, profitability, and therefore investment in the sector, is now under threat. Overall we could be facing reduced sales, increased costs and lower demand from the home market and while this could be offset to a small degree by more foreign tourists coming here due to the fall in the value of the pound, the eating-out market now faces less growth than we predicted for this year and next.”

Revolution Bars Group reveals plans to acquire four Edinburgh bars for £16m, proposes to launch new brand: Revolution Bars Group, which operates 62 sites across the UK under the Revolution and Revolución de Cuba brands, has revealed it is in discussions to acquire four Edinburgh bars for £16m. The company said the proposed deal would result in the introduction of a new brand capable of being rolled out to other sites. It stated: “Revolution Bars Group announces that it is in discussions regarding a proposed acquisition of four bars in Edinburgh (the ‘target assets’) for an expected consideration of approximately £16m. In the financial year ended 26 April 2015, the target assets reported an aggregate site Ebitda of £3.3m. The proposed acquisition, should it complete, is expected to be significantly earnings enhancing for the group’s financial year ending 30 June 2017, and would enlarge the group’s portfolio of bars and introduce a further brand, which the directors believe to be capable of being rolled out to other sites, to the group’s portfolio. The consideration is expected to be funded via new debt, a relatively small placing of new ordinary shares for cash and the issue of ordinary shares to the vendors. Discussions are ongoing and, particularly in light of the results of the EU Referendum announced this morning (Friday, 24 June), may or may not result in any transaction, whether as described above or at all, being agreed. A further announcement will be made when appropriate.” The company added: “The group continues to trade well in the second half of the financial year ending 30 June 2016 following its strong performance in the first half. The site opening programme for the financial year ending 30 June 2017 is progressing ahead of schedule.”

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