Revolution Bars Share Discussion Threads

[dan_the_epic] 19/5/2017 15:36

The problem here is operational gearing. If growth really does grind negative, that Ebitda will be slashed in a flash.

[bones] 19/5/2017 15:35

That may be so, Pugugly, but I suspect RBG is a sitting duck for a takeover at these levels given its assets and lack of debt.

[pugugly] 19/5/2017 15:32

British Pub Chains Are Drowning Their Sorrows This Week


Read across - all bars are under extreme pricing pressure so (imo) the competitive environment may well lead to yet further and un forcast margin erosion.

[thevaluehunter] 19/5/2017 14:44

I'm in. Roll out on c£15m ebitda with no debt and a market cap of £64m.

[turbocharge] 19/5/2017 13:55

Just entered the fray, bought 1,888 @ 1.26

[connor23] 19/5/2017 13:52

Thanks GHF. Useful commentary.

[panic investor] 19/5/2017 13:52

Whilst it is true that customers have little loyalty in this business the fact the high streets are being turned into entertainment zones with far less focus on shopping should help - the high street is dead regarding that unless your specialist shopping i.e. High end jewellery etcPeople - the young - are spending as they have no realistic chance of purchasing property

[panic investor] 19/5/2017 13:46

I have too

[glasshalfull] 19/5/2017 13:46

Few of us having a nibble it would appear.

Numis have downgraded adj EBITDA by 12% while shareprice has been whacked by almost 40%.

Here's what they have to say,

"Lfl sales growth now stands at 1.7% YTD vs 2% in H1 and 1.7% weeks 27-34. This implies a slowdown to 1.3% in the last 18 weeks. The company suggests that disappointing trading over Easter and the first May bank holiday is a factor here.

Management has underestimated the impact of new wage legislation. Although the NLW was introduced in April 2016, there were also NMW increases (applying to under 25s) in October 2016 and April 2017. Similarly, labour market data shows a wider impact on differentials across the sector, hence we believe labour inflation is 100 to 200bp higher than previously guided.

Revolucion de Cuba site openings are taking longer to reach mature levels of profitability, despite producing a weekly turnover in line with target (£43k). This reflects the more labour intensive customer service in this model (compared to Revolution sites).

Two large sites were closed for unplanned refurbishments in H2 (Blackpool and Cardiff). The loss of four week's trading could have an impact of up to £0.3m on operating profit we estimate.

and

For FY17 we now assume lfl sales growth of 1.5%, GM reduction of 100bp and 5% wage growth. This gives adjusted EBITDA (excluding pre-opening costs) of £15.6m, a 12% downgrade.

EPS exc pre-opening cost is 13.7p (or 12.1p post). In FY18, lfl sales growth of c.3% will be needed to cover cost inflation in the existing estate.

We cautiously assume 1.5% lfl sales growth but expect the group to generate c.£1m in cost mitigation. Combined with the impact of new site openings, this gives adjusted EBITDA of £17.2m, a 10% y-on-y improvement but 12% downgrade against our previous forecast."

---

Hope this assists.

Kind regards
GHF

[nurdin] 19/5/2017 13:29

I have bought a few as well...purely as a punt

[bones] 19/5/2017 13:20

Having sold back in Feb when the FD resigned, I am pleased I did in retrospect (post 198 @ 198p, spooky)

However, I am pretty amazed at the severity of today's drop so I have opened a small long spreadbet at 127p. Risk reward feels OK for a bounce to 150p maybe?

[dusseldorf] 19/5/2017 13:03

Oversold maybe, but the market doesn't seem to have any support - suggests one of the big boys has dumped and it may take some time, and further price drops to absorb it - even though fundamentally not a huge amount has changed.

have added to my watch, but so sign of price strength yet....

[sailing john] 19/5/2017 12:55

Bought at 128p
Oversold?
Cracking balance sheet
Like CV of interim FD (though not reasearched beyond RNS)
GL SJ

[someuwin] 19/5/2017 12:46

When asked recently about the impact of higher costs they said something along the lines of they were unconcerned as they could just adjust the the makeup of their drinks to compensate. That sort of disregard for your products and customers will be their undoing imo.

[pugugly] 19/5/2017 12:44

Points from the statment - levy - rates - minimum wage - all major headwinds PLUS falling real wages - BREXIT and election uncertainty PLUS maybe not for everone's taste as rubbished in a prior post but not being of the key target market age group cannot commonent on the validity of their opinion - Any other users able to give an opinion of their offering -v- competition?

OR could the format just be a passing fashionable fad approching its "use by date" ?

[sundance 13] 19/5/2017 12:28

Not sure about the good mgmnt bit given the issues highlighted today! Tempted to buy a few at this level but there's plenty of headwinds going forwards for them to deal with, not sure the issues can be as quickly fixed as Paul thinks.

[asturius101] 19/5/2017 12:20

Yep, they have good mngt, good time to buy in imho.

[investment dave] 19/5/2017 12:13

In at 128 and 130 45,000 shares

[investment dave] 19/5/2017 12:13

Yes bluebell but things don't fall forever

[connor23] 19/5/2017 12:11

Bought back in today. I think this a little oversold now, and I think Paul is right in saying that the issues are fixable. Obv the risk is in management being able to do this quickly without it affecting the rollout.