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Revolution Bars Group reports like-for-like sales improving in ‘challenging start’ to new financial year after falling to pre-tax loss, Peach trading well ahead of pre-covid levels: Revolution Bars Group, the operator of 67 premium bars and 22 gastropubs, trading predominantly under the Revolution, Revolución de Cuba and Peach Pubs brands, has said trading in its new financial year is improving after the business reported a full-year loss. Year-to-date like-for-like sales are down 5.5% compared with last year, though this has improved in the last three weeks to minus 3.5% “as a result of the return of students and corporates in bars and continued strong performance in pubs”. The company said it remains confident in achieving FY24 expectations, “which have been prepared on the assumption that the important Christmas trading period is not interrupted by train strikes”. Like-for-like pre-booked party revenue for Christmas FY24 is up 17.7% compared with last year, “giving evidence of a potentially normal festive season”. It said its new CRM system, recently used in its first major campaign as students returned, is proving to be a “significant asset driving sales”. The company stated: “It has been a challenging start to the new financial year with the continued pressure on our guests, and while the wetter and colder summer, in comparison to recent years, has somewhat aided our bars business it has not helped the Peach Pubs business whose beautiful beer gardens weren’t fully utilised. The Peach business has performed extremely well outside the periods of poorer weather. The return of students has been strong for the Revolution brand over recent weeks with a high level of engagement in our promoted nights as well as sign-ups to the Revolution app. Revolución de Cuba continues to outperform the bars market, per the Coffer CGA Tracker, and has done since the start of 2023. Our Founders & Co bar in Swansea continues to trade positively and provides another route for growth when the time is right. Our two Playhouse bars are experiencing the same challenges with the cost-of-living crisis as we see in the Revolution brand and we continue to review this concept. Peach Pubs continue to perform in line with expectations and well ahead of pre-covid-19 levels, with excellent expansion opportunities available when funds allow. Corporate Christmas booking are tracking well ahead of the same period last year, and this gives us confidence of a strong festive trading period whilst we remain mindful of the global political volatility and, nearer to home, potential industrial action by the railway unions to disrupt peoples’ Christmas.” For the year ending 1 July 2023, the company reported turnover increased to £152.6m compared with £140.8m the previous year. Adjusted Ebitda was down to £17.0m from £19.4m the year before but “in line with expectations”. The business made a pre-tax loss of £22.2m compared with a profit of £2.1m the previous year as the business was “significantly impacted by non-cash exceptional impairment charges”. Like-for-like sales in the full year were down 8.7% compared with the previous year. The business has delivered “significant cost savings” with energy usage now down 35% since 2017 and has recently implemented an enhanced labour management system to further increase efficiency. After the year-end the business closed one Revolution bar and opened one new Peach Pub. In FY23, the business refurbished five bars in the first half of the year as well as converting a second bar into a Playhouse, and investing in sustainability, IT and other key investments. The refurbishment strategy was paused in January 2023 “while we manage the cost-of-living cost impacts on our guests and our business, and we intend to resume progress when appropriate”. Chief executive Rob Pitcher said: “Peach Pubs has seen continued strong trading since acquisition, especially during periods of good weather. We are very excited to open our first new Peach Pub since the acquisition and see this brand as having significant expansion opportunities across the UK when we have the necessary available funds. The group now offers a well-rounded, diversified offering through our bars and pubs to navigate the ongoing challenges our guests face with the cost-of-living crisis. The macroeconomic challenges facing the industry impact on both our guests’ available spending as well as profitability of the business. This is a key area of focus for our management teams, and we are pleased to see the impact of our sales-driving initiatives coming to fruition, alongside active cost management. With pre-booked revenues at record-highs for the upcoming festive period, we look forward to our bars and pubs hosting our fabulous corporate guests, as well as anticipating improved walk-in custom following the challenges of industrial action on the railways in recent years. We join UKHospitality in calling for the crucial festive season to be protected and for an urgent resolution to the ongoing rail dispute. Not only do the strikes have a significant impact on sales and profitability, but most importantly they affect our colleagues’ earning potential through lost shifts and tips which the teams rely on to see them through the quieter trading months of January and February. I am immensely proud of the resilience and positive attitude our colleagues continue to show and look forward to entering our busiest trading period of the year, which we hope to be the first normal Christmas since 2019.”

Next Who’s Who of UK Food and Beverage to feature more than 203,000 words of content: The next Who’s Who of UK Food and Beverage will feature more than 203,000 words of content when it is released to Premium subscribers on Friday (20 October). The database now features 752 companies, and this month’s edition includes 25 new additions and 123 updated entries. The companies, listed in alphabetical order, will have their most recent results reported as well as broader information around Ebitda, plans and trading style available. The database merges Companies House information, interviews and other public information to provide an easy to reference and exhaustive guide to the sector. Premium subscribers also receive access to five other databases: the Multi-Site Database, which is produced in association with Virgate; the New Openings Database; the UK Food and Beverage Franchisor Database; the Propel Turnover & Profits Blue Book; and the UK Food and Beverage Franchisee Database. Premium subscribers are also to get access to the videos from this month’s Talent and Training Conference. They will be sent 13 videos on Friday, 27 October at 9am. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email kai.kirkman@propelinfo.com to upgrade your subscription. Premium subscribers are also being given exclusive access to the recording and slides to Propel Multi-Club Conferences. They also receive their morning newsletter 11 hours early, at 7pm the evening before; regular video content and regular exclusive columns from Propel group editor Mark Wingett.

Shoryu Ramen narrows FY losses, expects like-for-like sales to remain below pre-covid levels in 2023: Shoryu Ramen Restaurant Group, which is owned by Toridoll, has reported it narrowed its losses in the year ending 31 December 2022, but said it expects like-for-like sales to remain below pre-covid levels in 2023. The group, which operates eight restaurants in London and one each in Oxford and Manchester saw its pre-tax losses narrow from £412,421 to £125,854.This compares to a profit of £833,103 in the last full year before the pandemic, ending 31 December 2019. Turnover rose to £15,549,097 from £10,043,968 the previous year but remains behind the last full pre-pandemic figure of £17,954,842 in 2019. The group has net current liabilities of £1,354,558 (2021: £1,501,688) but overall net assets of £390,042 £2021 £518,395). A five-year Recovery Loan Scheme loan of £611,743 (2021: £750,000) included in creditors falling due within one year, has been reclassified to creditors due within one year due to a covenant breach, and the bank has “indicated it is possible that the same will apply for the financial year ended 31 December 2023”. A letter of comfort states it “does not intend to take any potential action as a result of the identified or potential future breaches.” In their report accompanying the accounts, the directors stated: “Shoryu’s like-for-like sales rose 66.3% compared with the previous year, showing a strong rebound from the pandemic. While mature locations (Regent Street, Denman Street, Carnaby Street, Liverpool Street and Stratford) recorded a sales increase of 57.1% the emerging sites Covent Garden and Shoreditch recorded an increase of 95.3% and the out of London locations, Manchester and Oxford City recorded a 76.3% increase. Shoryu’s New Oxford Street site permanently closed in October 2021 and surrendered its lease in March 2022. Overall, like-for-like sales were 8.7% behind pre-pandemic year 2019 while 2023 is forecast to be 3.4% behind. With the opening of Shoryu’s first franchise site in Kensington High Street (October 2022), Shoryu plans to expand both owned and franchising sites.” The company received government grants of £37,108 (2021: £734,804). No dividend was paid (2021: nil).

Whitbread set to launch second consecutive £300m share buyback: Whitbread is poised to announce a new £300m share buyback alongside a positive first-half performance as its Premier Inn budget hotels gain market share. The group, which reports its half-year results tomorrow (Wednesday, 18 October), is close to achieving a net cash position excluding leases, putting it in strong shape to launch a second consecutive £300m share buyback, reports The Times. Analysts at Morgan Stanley, Whitbread’s house broker, pointed out the company had completed its initial £300m buyback, announced at its full-year results in April, and continued to generate strong cash flow. Whitbread said at the time of the launch of the first share buyback that the return of cash to shareholders reflected its confidence in the outlook for the company. “The group aims to maintain sufficient funds for working capital and future investment in order to meet growth targets,” it said. “The management of equity through share buybacks and new issues is considered as part of the overall leverage framework, balanced against the funding requirements of future growth.” Analysts said that if the mooted sale of 250 of the company’s Beefeater and Brewers Fayre pub-restaurants were to take place, Whitbread would have even more cash to hand to investors. A share buyback is an alternative way for a listed company to reward its shareholders on top of the more common cash dividends. Companies pay shareholders to buy back their own shares and cancel them, thus reducing the share capital. While fewer shares remain in circulation, shareholders get both a larger stake in the company and a higher return on future dividends. Shares in Whitbread were up 35p, or 1.1%, at £32.94 last night (Monday, 16 October)

Food producer prices fall at fastest rate since covid pandemic: Prices charged by food and drink manufacturers fell last month at the fastest rate in more than three years, boosting hopes that inflation in food prices will ease significantly. According to the Lloyds Bank UK Sector Tracker, a measure of “factory gate” prices paid by wholesalers and retailers fell from a measure of 50.5 in August to 48.8 last month. That is the lowest reading since the outbreak of the pandemic in February 2020, when the tracker registered 46, and is the sharpest of the five consecutive monthly falls recorded since May. The reduction in prices was driven by a steep drop in input costs, down to a reading of 42.4, compared with 43.3 the month before. Lloyds said the last time that the measure had fallen at such a rate was in November 2015. The indices’ readings range from zero to 100, with a figure above 50 indicating an overall increase compared with the previous month, and one below 50 an overall decrease. Annabel Finlay, managing director of food, drink and leisure at Lloyds, told The Times: “The slowdown in food and drink manufacturers’ input costs is now clearly feeding through to the prices they charge their customers.”

UK economy shows ‘signs of resilience’ in face of interest rate woe: The British economy is showing “signs of resilience” despite high interest rates, experts claim. Even though interest rates are at their highest level for 15 years, there are signs that the economy will hold up, according to the EY Item Club’s autumn forecast. Hywel Ball, the UK chairman of accountancy firm EY, told The Daily Mail: “The cost of debt is set to be the biggest headwind for the economy over the next 12 months, with consequences for businesses and consumers.” But he added: “While high interest rates will weigh heavily on growth, there are still signs of resilience from which we can take positives. Inflation is heading in the right direction, average wages are rising in real terms once more and household and corporate balance sheets remain unusually healthy.” The EY Item Club economic forecasting group says sluggish growth will persist into 2024 thanks to the burden of high rates and the weaker-than-anticipated labour market. It predicts the economy will grow by 0.6% this year – better than the 0.4% it forecast in a report in July. However, GDP in 2024 is expected to be slightly lower than hoped, with Item Club economists moving their prediction from 0.8% to 0.7%. The Item Club predicted headline inflation would fall to around 4.5% by the end of 2023, before hitting the Bank of England’s 2% target in the second half of 2024. Falling inflation, a likely end to rate rises and a return to real pay growth would prevent the economy from sliding into a recession, it forecast. Britain’s economy returned to growth in August, rising 0.2% after falling sharply in July.

Bank of England still has ‘work to do’ to beat inflation, says chief economist: The Bank of England must not “declare victory prematurely” in the fight against inflation, a top official has warned. Huw Pill, the central bank’s chief economist, said there is still “some work to do” to put a lid on rising prices. The comments suggest the bank stands ready to raise interest rates yet again if required having pressed pause on its hiking cycle last month, reports The Daily Mail. The bank raised rates 14 times in a row between December 2021 and August this year – taking them from 0.1% to 5.25% It then left interest rates unchanged in September in a move that raised hopes borrowing costs have peaked. But while inflation has fallen from 11.1% in October last year to 6.7% , it remains well above the 2% target. Official figures tomorrow (Wednesday, 18 August) will show if inflation fell any further in September with economists polled by Reuters expecting a drop to 6.5%. Speaking ahead of that announcement, Pill said: “It is important that we do not declare victory prematurely, just because movements which are relatively mechanical in headline inflation are working their way through. We still have some work to do, in order to get back to 2%.”

Stonegate agrees new ten-year partnership with Carlsberg Marston’s Brewing Company: Stonegate Group, the UK’s largest pub company, and Carlsberg Marston’s Brewing Company (CMBC) have agreed a new ten-year partnership. The partnership will see an increased presence for CMBC’s premium beer brands including Brooklyn Pilsner and Birrificio Angelo Poretti across Stonegate’s pub estate. From spring 2024, CMBC will become Stonegate Group’s new logistics partner, managing all keg and cask deliveries to Stonegate Group’s managed pubs. The move is expected to create around 100 jobs within logistics at CMBC, including in distribution and warehousing. Melissa Wisdom, chief commercial officer, Stonegate Group, said: “We look forward to working with CMBC to provide an excellent logistics service to our pubs, thereby ensuring availability of products for our guests. We are excited to add CMBC premium beers to our range for our guests to enjoy.” Paul Davies, chief executive of CMBC, added: “This is a momentous agreement for both CMBC and Stonegate Group, securing a long-term partnership to deliver a range of our fantastic beer brands into thousands of Stonegate Group’s excellent pubs.”