Revolution Bars Share Discussion Threads

[spoole5] 20/5/2017 08:13

I would shelve the new openings until the existing estate is performing better. Run the business for cash.

[elsa7878] 20/5/2017 07:59

Depreciation charge is around £6 million a year but capex on maintenance is running at approx £3 million.
So in cashflow terms they will make £15 million - £3 million - tax £2 million = £10 million a year.
Now clearly a reversal in sales would not be good, but at the moment running fast to stand still is generating heaps of cash...just not sure I would be using it all for expansion (6 new bars will use up a lot of that £10 million depending on unit size).

[staverly] 20/5/2017 07:31

Agree with Hordean Eagle.
Would also contend that the business appears incapable of covering its cost of capital, not withstanding exposure to around £140m future lease obligations. From what I've read, management appear far from convincing, so cannot relate to yesterday as a "good" profit warning. On balance, I'd view it as an early stage value trap.

[investment dave] 20/5/2017 01:22

Worth about £2-£3 easy been revolution tonight. Packed and best part of night

[barnetpeter] 20/5/2017 00:29

Worth 70 to 80p max. Lots of increases on the way with foreign worker payment increased, big increases in business rates, interest rate increases, biggest personal debts in history likely to reduce spending. The company seems to have little idea of its cost profile...if it cuts staff people soon go elsewhere. Asset backing....??

[opodio] 19/5/2017 23:28

cottoner


cheers great articke

[opodio] 19/5/2017 22:10

Its just a load of leases with sales deteriorating

cost pressures will continue to represent downside
risk to estimates

[thevaluehunter] 19/5/2017 21:53

EBITDA is a good proxy for free cashflow because depreciation and amortisation are both non-cash. You can argue that av annual maintenance capex should be included.

[opodio] 19/5/2017 21:26

Breach of bank covenants soon

[horndean eagle] 19/5/2017 21:07

Never sure why people are so keen to rely on ebitda as a metric. Surely its only valid if depreciation and amortisation are not an ongoing expense. For RBG they will be. Look at the history of listed bar/nightclub companies and its absolutely dire. Nearly every single one has gone bust or nearly bust. Yates, SFI, Luminar, Chorion, Eclectic Bar etc. They have a theme that works for a bit and then gets old and stale and they either go bust or have to re-invest heavily to stay on the treadmill.

Just checked capex on existing estate. At interim stage it was 2.5m and 3.4m the year before. Confirms my theory about heavy spending required to keep estate relevant. Depreciation figure in the period was £3.6. So not a massive difference from capex on existing estate. Suggests not as cheap as the ebitda brigade will have you believe.

[5chipper] 19/5/2017 20:08

Maybe a couple of weeks of volatility to come but market cap to adjusted profits (stripping exceptional opening costs and amortisation + depreciation) is far far too low. Roughly 3/4 x... Positive lfl sales and strong pipeline of new sites to boot

[topvest] 19/5/2017 19:35

Well this stock is certainly now an interesting proposition. May well take a position as I agree with Paul Scott that this is a "good" profit warning if there ever was one. After reading the profit warning guide on Stockopedia it's good to resist the temptation on a day like today and wait a few months or even a year.

[thevaluehunter] 19/5/2017 18:46

There's no debt. EV/ebitda is sub 4.

[opodio] 19/5/2017 18:15

Breach of bank covenants soon

[ksharlandjiev] 19/5/2017 17:34

And I was told the AIM was the unpredictable market lol!

[thevaluehunter] 19/5/2017 17:31

So they've lost c2% of ebitda margin - unsurprising given the minimum wage, tax increases and Euro strength. Not sure that it warrants a c£40m drop in market cap and definitely a good entry point IMO. The EV multiple now looks really low and could get taken out by private equity.

[turbocharge] 19/5/2017 17:24

Institution shareholders:

AS OF 30 SEP 2016
Old Mutual Global Investors (UK) Ltd. 8.72m 17.44%
Schroder Investment Management Ltd. 6.01m 12.03%
River & Mercantile Asset Management LLP 4.77m 9.54%

AS OF 16 JAN 2017
Legal & General Investment Management Ltd. 4.34m 8.68%

AS OF 30 SEP 2016
Artemis Investment Management LLP 3.20m 6.39%
Invesco Asset Management Ltd. 2.49m 4.97%

AS OF 24 NOV 2016
Aberforth Partners LLP 1.90m 3.81%

AS OF 04 JAN 2017
Polar Capital LLP 1.46m 2.92%

AS OF 21 OCT 2016
Royal London Asset Management Ltd. 1.45m 2.89%

AS OF 02 FEB 2017
AXA Investment Managers UK Ltd. 1.37m 2.74%

[dusseldorf] 19/5/2017 17:11

I would be cautious about leveraged positions here - buy and hold will one day win, but don't rule out further falls short-term (sub £1?). The press is negative and trading pattern indicates a larger seller behind the scenes - seen it many times before.

All the new entrants today are mostly in for a short term expecting a positive bounce, if this does not happen its a slippery slope regardless of long-term prospects as traders chase losses against MM's who are working a volume sale.

I hope everyone here makes money, but don't bet the house just yet, IMO it's too early.