Last checked at 13 Nov 2020 14:37
13 November 2020
Revolution Bars Group Plc
("RBG" or the "Group")
Revolution Bars Group plc, the leading operator of 72 premium bars trading across the UK under the Revolution and Revolucion de Cuba brands, today provides an update on the result of the Company Voluntary Arrangement ("CVA") process, the Group's financial position and liquidity, a Board change, and the Group's announcement date for its Final results for the 52 weeks ended 27 June 2020.
CVA successfully approved
At a meeting of creditors held today, the CVA process announced on 27 October 2020 relating to the Group's wholly owned statutory entity Revolution Bars Limited ("RBL") was approved.
- Over 88% of all creditors voted in favour of the proposal (75% approval required)
- Over 75% of the unconnected creditors voted in favour of the proposal (50% approval required)
In accordance with the relevant statutory provisions, there is a 28-day period, following the filing of the report by the chair of the meeting, in which a creditor may apply to court to challenge the CVA.
RBL includes 51 Revolution branded leasehold bars. Following the approval of the CVA, RBL will exit six bars imminently, and reduced rental terms have been agreed in respect of seven other bars that are now subject to turnover-based rents with minimum rental thresholds for the duration of the two year CVA period. Further details of the CVA were provided in the announcement of the launch of the CVA on 27 October 2020.
Financial position and liquidity
Currently, all of the Group's English bars are closed until at least 3 December 2020 as a result of the latest UK government lockdown. However, the Group reopened two bars in Wales this week and reopened three of its seven Scottish bars last week following the lifting of restrictions in those countries, whilst its bar in Northern Ireland will remain closed until 27 November 2020.
The Group estimates that its cash flows (before one-off costs of implementing the CVA of approximately £1.1m) will improve over the two-year period of the CVA by approximately £4.0m. Net bank debt is currently £13.5m compared to current committed bank debt facilities of £37.2m, which reduces to £29.3m at the end of March 2021 and to £28.1m at the end of June 2021. Under the terms of the CVA, £1.3m of rent and service charge arrears will be paid on 20 November 2020. The Group's cash burn rate, if all the Group's bars are subjected to an enforced closure and assuming the continuation of the current CJRS and other government reliefs, is estimated at approximately £0.4m per week. Whilst there remains significant uncertainty due to the pandemic, the Board is very encouraged by the welcome news of a COVID-19 vaccine potentially becoming available by Christmas, which suggests revenue generation may return to more normal levels through the course of 2021.
Board changes
Following the successful completion of the CVA process, Mike Foster, Chief Financial Officer, has indicated that he will not seek re-election at the Group's upcoming AGM on 22 December 2020 and will step down from the Board at the end of that meeting. The Board is pleased to announce that it is intended that Danielle Davies will be appointed as Chief Financial Officer immediately following the AGM. Danielle joined the Group in July 2020 as part of our long-term succession planning process and has been working closely with Mike since that time. Danielle is an ACA and brings extensive retail experience through her most recent roles as Chief Financial Officer at Footasylum and Director of Finance at Pets at Home, and in senior financial positions at Matalan and the Co-Op.
Confirmation of preliminary announcement date
As previously advised, now that the CVA has been approved the Group will report its Final results for the 52 weeks ended 27 June 2020 on 17 December 2020.
Commenting on the approval of the CVA, Rob Pitcher, Chief Executive said:
"I'm grateful for the support of our creditors in approving the CVA of Revolution Bars Limited providing the opportunity for the business to move forward with much greater certainty for all its stakeholders. This is a positive step in the right direction for the business. However, whilst we welcome the support Government has given, the hospitality sector has been severely affected by their often illogical, inappropriate and disproportionate response to the coronavirus pandemic. To plan ahead, we still require guidance on how the sector can ultimately exit the current restrictions in a safe and timely manner. With phase one of the vaccine rollout potentially commencing in December and set to protect 99 per cent of the UK's at-risk population, we have some potential indication of a timeline to normality which will save jobs and allow us to resume delighting our customers again ."
Throughout this pandemic the safety and welfare of our teams and our guests has remained our primary focus and I would like to recognise the integrity and determination shown by all our colleagues over the last eight months."
Enquiries:
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This announcement contains inside information within the meaning of the Market Abuse Regulation. The person responsible for arranging release of this announcement on behalf of Revolution Bars Group plc is Mike Foster, Chief Financial Officer.