The operator of 66 bars trading under its Revolution and Revolución de Cuba brands conditionally placed 5,001,866 open offer shares and 100,000,000 firm placing shares through finnCap and Peel Hunt.
According to a statement from the bar operator £11m from the fundraise will be used to strengthen the group’s balance sheet and foot the fundraising bill, while £2.5m will be used to refurbish 15 sites over the next 18 months – targeting a return on investment of at least 50%.
What’s more, £7.5m will be used to expand its estate – on a “selective site-by-site basis” – into new towns and regions, with a target return on investment from eight new sites of more than 25%.
According to an update announcing the fundraise, Revolution’s net bank debt stood at £28.5m on 10 May 2021.
What’s more, in November, the firm had a company voluntary arrangement (CVA) for subsidiary Revolution Bars Limited approved – which saw six sites immediately close.
‘We now have the firepower’
As reported by The Morning Advertiser, Revolution reopened 20 of its sites for outdoor guests in April before reopening its full 66-site stable for indoor trading on 17 May.
Following the operator’s successful fundraise, CEO Rob Pitcher said that the support from shareholders and new investors would allow Revolution to emerge from a period of disruption in a “strong position with a fit for purpose balance sheet”.
“We now have the firepower to deliver strong proven returns from the refurbishment of the remainder of our uninvested bars and the ability to take advantage of opportunities that undoubtedly will arise from a very dislocated market,” he added.
“We have traded outstandingly since the initial restrictions have been lifted. We are now looking forward to the end of all restrictions and are excited about the next part of the journey delivering best in class entertainment and hospitality to our guests.”
In its most recent results statement, Revolution revealed plummeting sales in the first 24 weeks of FY21 as a result of “severe and constantly evolving trading restrictions.”
In a preliminary results statement for the 25 weeks ended 27 June, Revolution Bars Group highlighted total revenue for FY20 had fallen to £110.1m compared to £151.4m in the previous 12-month period, while statutory pre-tax losses deepened from £5.6m to £31.7m.
What’s more, the group also revealed revenue for the 24 weeks from July 2020 stood at £20.6m, down by 58.6% against the £74.1m taken during same period the previous year.