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(Alliance News) - Revolution Bars Group PLC on Tuesday said subsidiary Revolution Bars Ltd expects to close six bars to reduce its rental cost base following the latest government restrictions to curb the spread of Covid-19 in the UK.
The operator of 73 bars trading across the UK said the subsidiary has launched a company voluntary arrangement in order to reduce the size of its estate and rental cost base and improve the profitability and return on capital of the group over the long-term.
The voluntary arrangement will see the subsidiary "exit" six bars and obtain improved rental terms on seven others.
The remaining 37 bars in the subsidiary's portfolio will not be materially affected, Revolution Bars said. These bars either benefit from group guarantees, are considered strategic to the brand, or rental mitigation has already been agreed with landlords. This will leave the subsidiary with approximately 44 bars.
The company's Revolucion de Cuba branded bars and four Revolution branded bars operated by other entities in the group are unaffected by the proposal, Revolution Bars said.
A swift recovery when trading conditions normalise is paramount, the company urged.
Revolution Bars said: "Given the latest government restrictions under which the group is operating, the group's trading outlook is uncertain and based on all the information and commentary available, the board now anticipates that the important Christmas trading period will be severely compromised and any return to near normal levels will not be possible before next spring at the very earliest."
Revolution Bars said that is unable to provide reliable guidance for the current financial period given the uncertain trading outlook and macro-economic environment.
Revolution Bars lender, NatWest Group PLC, has agreed to waive the defaults that arise from the company voluntary arrangement which would otherwise mean that the company is in breach of undertakings under its revolving credit if the arrangement proposals are accepted.
Revolution Bars shares were up 0.5% at 9.95 pence each in London on Tuesday morning.
By Greg Roxburgh; gregroxburgh@alliancenews.com
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