The group, which operates more than 60 bars and gastropubs, trading mainly under the Revolution, Revolucion de Cuba and Peach Pubs brands, added it had seen a “strong” first half for its financial year (H1) versus last year while taking aim at the Government over its employers’ national insurance contributions (NICs) announcement.
The Revel Collective (TRC) said group like-for-like sales for the four weeks from 7 December 2024 to 3 January 2025 were up 1.6% while pre-booked revenue, largely from corporate Christmas bookings, achieved record levels over the festive period in its Revolution and Revolucion De Cuba brands and was 5.3% ahead of last year.
Meanwhile, 32 weekly food and drink sales records were broken across the group during the same period with the Peach Pubs brand performing the best of its three main brands.
It added while festive trading was robust and its pubs have seen a strong H1 performance compared to last year, sales at its bars during the early part of the financial year were hampered by the uncertainty caused by the delay to the completion of the Revolution Bars restructuring plan.
Sales not recovered
Although there has been gradual improvement in sales at Revolution sites, the late-night market continues to be challenging and sales have not yet recovered as quickly as anticipated.
Several planned initiatives are in place to boost profitable growth in H2. However, the changes announced in the Budget are expected to fully offset these efforts in FY25. TRC estimates the annual profit impact of the Budget announcements on the group will be worth £4m.
Lower sales in H1 and higher costs arising from the Budget, which will come into effect for the final quarter of the financial year, means TRC expects earnings before interest, taxation, depreciation and amortisation (EBITDA), driven by the level consumer sentiment, to be in the range of £2.0m to £4.0m while net debt is currently £14.4m.
TRC CEO Rob Pitcher said: “The 2024 festive trading period provided us with a fantastic opportunity to showcase what we do best and it was wonderful to see our guests enjoying the parties we hosted. I am particularly pleased with the strong performance in Peach and Founders & Co, which stood out in terms of sales growth.
New sales initiatives
“However, the younger guests in our bars continue to face challenges with the high cost of living. Additionally, the negative discourse surrounding the restructuring plan created uncertainty among our guests and team members. This uncertainty persisted well into FY25, leading to a weaker recovery than we had originally anticipated.
“We now look forward to a period that will see us implement several new sales initiatives, including launching the new brand proposition for our Revolution brand, just in time for our target guests to receive the 16.3% (18 to 20-year-olds) increase in national minimum wage.
“The newly elected Labour Government’s recent budget announcements, especially the reduction in the NICs thresholds for employers, will have a very damaging impact on the group.
“These measures are regressive and offer no clear pathway for economic growth within the hospitality sector. They also pose risks to the employment market. We strongly urge the Government to reconsider this policy in particular and explore more balanced alternatives.”
