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Fri 13th Nov 2020 - Revolution Bars Group gets CVA approval, updates on financial position, CFO change
Revolution Bars Group gets CVA approval, updates on financial position, CFO change: Revolution Bars Group, which operates 72 bars under the Revolution and Revolución de Cuba brands, has had its company voluntary arrangement (CVA) approved. At a meeting of creditors held today (Friday, 13 November), more than 88% of all creditors voted in favour of the proposal while more than 75% of the unconnected creditors voted in favour. Following the approval of the CVA, Revolution Bars Group will exit six bars imminently, and reduced rental terms have been agreed in respect of seven other bars that are now subject to turnover-based rents with minimum rental thresholds for the duration of the two-year CVA period. Chief executive Rob Pitcher said: “I'm grateful for the support of our creditors in approving the CVA, providing the opportunity for the business to move forward with much greater certainty for all its stakeholders. This is a positive step in the right direction for the business. However, while we welcome the support government has given, the hospitality sector has been severely affected by their often illogical, inappropriate and disproportionate response to the coronavirus pandemic. To plan ahead, we still require guidance on how the sector can ultimately exit the current restrictions in a safe and timely manner. With phase one of the vaccine rollout potentially commencing in December and set to protect 99% of the UK’s at-risk population, we have some potential indication of a timeline to normality, which will save jobs and allow us to resume delighting our customers again. Throughout this pandemic, the safety and welfare of our teams and our guests has remained our primary focus and I would like to recognise the integrity and determination shown by all our colleagues over the past eight months.” Revolution Bars Group also updated on its financial position and a change of chief financial officer. The company stated: “Currently, all of the group’s English bars are closed until at least 3 December 2020 as a result of the latest UK government lockdown. However, the group reopened two bars in Wales this week and reopened three of its seven Scottish bars last week following the lifting of restrictions in those countries, while its bar in Northern Ireland will remain closed until Friday, 27 November. The group estimates its cash flow (before one-off costs of implementing the CVA of approximately £1.1m) will improve over the two-year period of the CVA by about £4m. Net bank debt is currently £13.5m, compared with current committed bank debt facilities of £37.2m, which reduces to £29.3m at the end of March 2021 and to £28.1m at the end of June 2021. Under the terms of the CVA, £1.3m of rent and service charge arrears will be paid on 20 November 2020. The group’s cash burn rate, if all the group’s bars are subjected to an enforced closure and assuming the continuation of the current Coronavirus Job Retention Scheme and other government reliefs, is estimated at about £400,000 per week. While there remains significant uncertainty due to the pandemic, the board is very encouraged by the welcome news of a covid-19 vaccine potentially becoming available by Christmas, which suggests revenue generation may return to more normal levels through the course of 2021. Following the successful completion of the CVA process, chief financial officer Mike Foster has indicated he will not seek re-election at the group’s annual general meeting (AGM) on 22 December 2020 and will step down from the board at the end of that meeting. The board is pleased to announce it intends Danielle Davies to be appointed as chief financial officer immediately following the AGM. Danielle joined the group in July as part of our long-term succession planning process and has been working closely with Mike since that time. Danielle is an ACA and brings extensive retail experience through her most recent roles as chief financial officer at Footasylum and director of finance at Pets at Home, and in senior financial positions at Matalan and the Co-Op.”

Reopening of bars and restaurants in Northern Ireland delayed by two weeks: Northern Ireland’s power-sharing government has agreed to extend covid-19 restrictions for between one and two weeks, falling short of stricter measures demanded by Irish nationalist parties. Northern Ireland, in mid-October, became the first part of the United Kingdom to re-impose strict covid-19 constraints, closing schools for two weeks and bars and restaurants for four, but the measures were due to lapse on Friday (13 November). The pro-British Democratic Unionist Party (DUP) has been pushing for a swift end to the restrictions to help small business owners, but the rival Ulster Unionist Party (UUP) and Irish nationalist parties Sinn Fein and the SDLP said high infection rates meant restrictions should be maintained. Under a compromise between the DUP, the UUP and the non-sectarian Alliance party, the five-party power-sharing executive agreed the reopening of cafes and close-contact services such as hairdressers will be delayed by a week, and the reopening of bars and restaurants serving alcohol will be delayed by two weeks. Sinn Fein voted against the measures, while the SDLP abstained. “The advice was that we needed a further two-week restriction (on cafes and close-contact services) and that’s what we would have wanted to see,” Sinn Fein’s Northern Ireland leader Michelle O’Neill told UTV television.

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