Shares in Revolution Bars (RGB:AIM) jumped 4.3% to 31.7p after the late bars operator said it was excited and ready to bounce back with tickets for summer events selling out in minutes, supporting expectations of pent-up demand.

The group is planning to open 20 of its 66 bars from 12 April utilising outdoor spaces while all the estate is due to open from 17 May in England with unrestricted trading from 21 June 2021, assuming the governments sticks to its ‘Freedom Day’.

Over the past four weeks the company has seen a 142% increase in bookings compared to 2019 with destination cities like Liverpool, Brighton and Newcastle-upon-Tyne fully booked throughout July for Cocktail Masterclasses.

STRATEGIC PROGRESS

The company has made good progress during lockdown by honing its offering and increasing uptake of its digital offering. Registered users of the company’s app have more than doubled to 563,000 since February 2020.

Chief executive Rob Pitcher told Shares that this will allow the company to increase the efficiency of its marketing and enhance margins.

Revolution Bars plans to trial two new concepts once trading conditions allow. One is based on the well-established trend of competitive socialising (think Flightclub or Bounce) where the firm will target seaside destinations to take advantage of ‘staycationing’.

The other concept involves helping young entrepreneurs to develop their businesses. Peel Hunt reckons this initiative could be in the fast-growing food halls sector.

The business is highly cash generative when allowed to operate without restrictions. The priority is to use cash flow to restart refurbishment of the estate which historically has earned a high return on investment.

The next priority is to conservatively reduce debts and expand the estate from internally generated cash.

Peel Hunt commented: ‘With plans in place to launch two new concepts, it is possible that the strategy could soon shift to becoming more expansive, which could generate a big uplift in equity value.’

First half revenues to 26 December 20202 fell 73% to £21.6 million producing adjusted pre-tax losses of £11.5 million compared with £2.9 million profit last year.

At 13 April 2021 the group had net bank debt of £30.8 million with total committed bank facilities of £40.3 million.

READ MORE ABOUT REVOLUTION BARS HERE

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Issue Date: 13 Apr 2021