Just like one of its cocktails, there's more punch in Revolution Bars (RBG) than it seems at first sip. Like-for-like sales rose 2.7 per cent to £59.2m, showing there is still demand for alcohol at the pricier end of the scale. The company recently introduced blended drinks - effectively slushed ice cocktails - which chief executive Mark McQuater says have proved a popular innovation despite their premium price tag.
A significant pressure on the service industry this year will be the introduction of the national living wage in April, which will enforce a £7.20 per hour wage to staff aged 25 and over. But Mr McQuater said that was unlikely to be the expensive headache it might be for his rivals as less than 10 per cent of its workforce are older than 25.
Management's expansion plans - and thus, associated costs - don't seem overly ambitious, either. Three Revolución de Cuba sites, its newer brand, were opened in October ahead of the Christmas rush. Mr McQuarter reports sales there are already tracking roughly 17 per cent ahead of forecasts. Another of these bars and a Revolution site are planned for the second half.
Broker Numis has upgraded its 2016 adjusted pre-tax profit estimate to £9m, leading to adjusted EPS of 13.9p, up from £8.3m and 12.8p in 2015.
| REVOLUTION BARS (RBG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 168p | MARKET VALUE: | £84m | |
| TOUCH: | 168-173p | 12-MONTH HIGH: | 210p | LOW: 160p |
| DIVIDEND YIELD: | nil | PE RATIO: | 43 | |
| NET ASSET VALUE: | 79p | NET CASH: | £1.5m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 58.0 | 4.3 | 8.7 | nil |
| 2016 | 59.2 | 4.7 | 8.0 | 1.50 |
| % change | +2 | +7 | -8 | - |
Ex-div: 10 Mar Payment: 8 Apr | ||||
