Demand for premium drinks from Britain's bar-goers helped cocktail-focused Revolution Bars (RBG) serve up a tasty 40 basis point rise in gross margins. Chief executive Mark McQuater said higher margin iced cocktails had proved popular with customers, pushing up spend per head. Volumes also rose, which is important given other drink-focused businesses cite growing demand for premium drinks but often in smaller quantities. Mr McQuater said expanding the pre-booking sales team had also coincided with a 10 per cent rise in table reservations.
Five new bars opened during the year, four under the Revolución de Cuba brand, while management has another 21 potential sites under lease negotiations. While this lays the path for future growth, the company has pulled out of an acquisition of a group of four bars, which it planned to convert into its own brands, in the wake of the UK's vote to leave the EU. Mr McQuater said that despite the deal's attraction, "the timing wasn't right". However, he believes future bolt-on acquisitions are still possible, especially given the group's net cash position.
Analysts at broker Numis expect pre-tax profit of £10.5m for the year to June 2017, leading to EPS of 16.6p, up from £9.2m and 16.1p in FY2016.
| REVOLUTION BARS (RBG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 153p | MARKET VALUE: | £77m | |
| TOUCH: | 153-160p | 12-MONTH HIGH: | 197p | LOW: 145p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 82p | NET CASH: | £2.7m | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 106 | 5.8 | na | na |
| 2013 | 112 | -2.1 | na | na |
| 2014 | 112 | 2.6 | 6.0 | nil |
| 2015 | 112 | 2.9 | 4.6 | 1.70 |
| 2016 | 119 | 7.1 | 12.1 | 3.30 |
| % change | +7 | +146 | +163 | +94 |
Ex-div: 10 Nov Payment: 9 Dec | ||||
