Revolution Bars (RBG) is accelerating its new openings schedule, suggesting business is good. The bar owner says it now plans to open six sites a year, compared with a previous estimate of five. During the first half of the financial year, it already added four new premises to its portfolio, taking the total estate to 66 sites. Of that, 53 fall under the Revolution fascia and 13 under Revolución de Cuba. These new sites come at a price, however, with a whopping 183 per cent rise in one-off opening costs resulting in flat operating profits of £4.7m.
New bars aside, underlying trading is strong. The group reported a solid 2 per cent improvement in like-for-like sales during the opening half year, thanks in part to a particularly good Christmas trading period. This, along with the contribution from new openings, allowed adjusted pre-tax profits to jump by a tenth during the period to £5.5m.
Chief executive Mark McQuater admits that the group has fed through some "tactical" price increases this year, but also worked hard to renegotiate with suppliers to protect margins, after import prices rose on sterling's decline.
Analysts at Peel Hunt expect pre-tax profits of £10.6m for the year ending June 2017, giving EPS of 16.7p, compared with £9.2m and 14.6p in FY2016.
| REVOLUTION BARS (RBG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 201p | MARKET VALUE: | £101m | |
| TOUCH: | 201-203p | 12-MONTH HIGH: | 235p | LOW: 145p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 87p | NET CASH: | £5m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 59.2 | 4.7 | 8.0 | 1.50 |
| 2016 | 66.7 | 4.6 | 7.7 | 1.65 |
| % change | +13 | -1 | -4 | +10 |
Ex-div: 16 Mar Payment: 6 Apr | ||||
