LONDON (Alliance News) - Revolution Bars Group PLC on Monday said it expects to report lower earnings in its current financial year, hurt by a decline in like-for-like sales and increased expenses.
Shares were down 22% at the London open at 95.00 pence.
The UK bars operator said revenue in the 26 weeks for the end of December 29 totalled GBP78.5 million, up 6.4% from GBP73.8 million reported for the same period a year earlier.
Revolution Bars said it opened five new venues in the first half, which have traded ahead of expectations.
Like-for-like sales performance for the 26 weeks ended December 29 was 4.0% below last year, however, with the first quarter down by 5.0% and second quarter 3.1% lower. The 26 week reporting period does not include New Year's Eve.
The Revolucion de Cuba brand continued to grow like-for-like sales during the first half with a particularly strong performance over the Christmas period, the company said. Meanwhile, it said the Revolution brand consistently traded below last year over the 26 week period, but achieved growth over the four weeks to New Year's Eve.
More positively, Revolution Bars said like-for-like sales in the four weeks up to and including New Year's Eve were 2.6% higher year-on-year, representing the sixth consecutive year of growth over the festive period.
Pre-booked party revenue was up 12% on a like-for-like basis, Revolution Bars said, and average weekly sales per venue were above GBP60,000.
Looking forward, the company said it expects adjusted earnings before interest, taxes, depreciation, and amortization in the first half of 2019 to be GBP2.0 million lower year-on-year due to the like-for-like sales decline and increased operating costs.
Accordingly, it expects adjusted Ebitda for the full year to be GBP12.0 million, down from GBP15.0 million reported in financial 2018.
"The uplift in like-for-like sales performance over the festive period gives us momentum going into the second half and I'm pleased with the progress being made in refreshing the Revolution brand proposition," said Chief Executive Rob Pitcher.
"However, given the uncertain economic and political outlook we are adopting a more cautious outlook on trading in the coming months," Pitcher added.
Revolution Bars will publish its interim results on March 1.