Revolution Bars (RBG) , a UK hospitality operator trading under the Revolution, Revolucion de Cuba, and Peach Pub brands, announced that its previously proposed financial restructuring plan had been sanctioned by Court on August 8, 2024.
The plan, which was launched on May 31, 2024, aims to restructure some of the company's liabilities. This includes amending and extending its lending facilities, exiting the leases of certain loss-making sites, and implementing rent reductions on other sites to help them return to profitability.
In more general terms, the plan aims to restore the group to financial stability, providing a platform for recovery from trading challenges caused in recent years by structural changes to the late-night bars market, primarily triggered by the Covid pandemic. Revolution Bars expects the plan to deliver a significant annualised EBITDA improvement of c. £3.8m.
The plan is supported by Revolution Bars' secured lender, and delivered through the refinancing of RBG's banking facilities. It is also facilitated by a £12.5m fundraise executed in April 2024 with shares to be admitted in early September 2024.
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A major milestone for Revolution Bars as its financial restructuring plan, expected to deliver a significant boost to profits, has been greenlit by the Court. The plan is expected to stabilise the group, reduce leverage, and reenable a normal refurbishment cycle with flexibility to explore new opportunities. Altogether, it is forecast to deliver an annual EBITDA improvement of £3.8m for the £2.92m mktcap company. RBG shares jumped 15.2% on the news.
Revolution Bars' trading in H2 (6 months to June 24, 2024) was impacted by the uncertainty of the restructuring process, which had been the main focus of the board in 2024. However, despite the hurdle that has now been cleared, the group still expects an EBITDA outturn at year-end FY24 of c. £3.0m, and net bank debt as of August 8, 2024 of £23.8m before receipt of the proceeds from the aforementioned £12.5m fundraise. Final results are expected in October 2024.
With the restructuring plan now greenlit, RBG will be more diversified across its brands, providing a stronger financial base. Following completion of the plan, the group will have 27 Revolution Bars, 15 Revolucion de Cuba Bars, 22 Peach Pubs and one Founders & Co site.
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