Revolution Bars Share Discussion Threads

[oxinternet1] 25/9/2020 21:45

The management and board are complete clowns. Their decision to not open all venues was a disaster and an accident waiting to happen. A second lockdown / restrictions was always a high possibility.

I took up the offering at 20p and sold at 14p making a SUBSTANTIAL loss.

Revolution Bars lost my confisence, they'll lose the confidence of landlords, banks and investors with their inability to react quick enough or with hindsight.

This company is a dead duck walking.

[dagsteeth] 25/9/2020 21:33

Swan,

It is. It’s easy to criticise the company with hindsight and I accept they made the best choices at the time. What is not forgivable is a government which can implement arbitrary policy to wipe out private capital with no consequences. Whether it’s this, as an example, travel policies, political correctness gone mad, or traffic schemes, government sponsored and local council implemented, bringing large potions of cities to a gridlocked standstill and hastening the demise of life as we know it, with a media that doesn’t hold anyone to account, there is a very scary secret agenda at play. If we were in France, we’d be rioting and blockading until policies reverted to fairness and common sense. By the way, Rishi’s latest scheme, if you do the maths, having someone qualify by doing 1/3 hours and then being topped up by another third split between company and employer, means that the employee is effectively getting a 100pc pay rise per hour worked and the employer is effectively paying his employee 50pc more on a per hour basis at a time when revenue has fallen off a cliff. If I was the employer, it’s a no brainer to make my entire staff redundant and rehire them on 1/3 hours or only rehire 1/3 on 100pc hours at the same hourly rate or just fire 2/3. Why does no journalist point this out. Every board will be doing this maths. It’s bonkers. Only politicians and civil servants who are paid out of the public purse and have never had to worry about such tawdry things as revenue, profits, cash flow, capital and risk could come up with something this crazy. Personally I am so mad, and facing another 6 months of lock down, I am seriously thinking through some more radical revolutionary options with some like minded friends. Back to Revs, if I was Rob Pitcher, I would fire most of my staff, in the expectation I can rehire them next Spring, use the CVA to dump every marginal lease and keep only the best sites, offering equity for rent to get those landlords on side and then mothballing the entire estate until life is back to normal. That might preserve enough cash to survive but will turn current equity into option money. In any event, the requirement for 75pc approval of creditors makes a CVA far from a done deal. Oh and let’s not forget Alix Partners will be sucking out £1m plus for their fees and the banks will be paying one of the accountants £500k to produce an IBR, at the company’s expense. Keith Edelman, as Chairman, has been a shocking executive, on a giant ego trip (and no doubt newly enhanced terms for the extra work the restructuring is forcing on the poor non execs) - should have gone after the farce with Deltic/Stonegate when shareholders should have had a choice between 2 decent deals but in the end Edelman managed to botch both. And in true Edelman style, he’s now gone very quiet and let poor Rob Pitcher cop all the heat.

[swanvesta] 25/9/2020 19:15

Right, now you're making a bit more sense. Though I think it's a bit much to expect companies to try to predict the course of pandemics let alone government policy wrt to them. It's new territory for everyone.

[dagsteeth] 25/9/2020 16:43

Gosh, lots of downvotes. Must be rbg management and/or Finncap people! Otherwise not a rational response from any investor!

[dagsteeth] 25/9/2020 16:10

Since the company has no money, what I want is the company to sue the government on behalf of shareholders. I am not suggesting that the company acted fraudulently but arguably negligently in not providing adequate risk disclosure. And I question whether the government is acting lawfully to destroy otherwise decent businesses by making policy decisions without recompense to the affected parties. Ask yourself this, if the company had said there is a material risk, having spoken with government, that there may be a second lockdown which would terminally damage our business, but give us £15m anyway, would you have written the cheque? That is the whole reason advisors are on the hook for a 12 month working capital statement based on full downside risk

[swanvesta] 25/9/2020 15:48

You're unbelievable. You want to sue the company even though they provided a worst case scenario which you say we are now way below? What exactly do you think they should have done?

"Worst case was 100pc open by nov. Now we know 11 clubs will not reopen and the rest, thanks to Boris this week, are pared back to be as good as useless til the end of March. So we are way below the worst case..."

[dagsteeth] 25/9/2020 15:19

Adequate working capital for 12 months as confirmed in the fund raising docs does not mean a cvs and / or running out of cash in 6. It’s called obtaining money from shareholders based on a fraudulent statement. I presume you are only pretending to be thick

[swanvesta] 25/9/2020 14:52

dagsteeth, would you provide some materiality to this assertion please? "Given the working capital statement in the capital raise was clearly a work of fiction"

[jacksonyoung] 25/9/2020 13:50

why don't sue the government itself for the unlawful lock down due to over hyped covid panic? start with the nhs official published numbers, all there :)

[dagsteeth] 25/9/2020 13:41

I have a question here. Given the working capital statement in the capital raise was clearly a work of fiction, do subscriber have the ability to sue (1) the company, (2) finncap, (3) the government for their losses

[luthier] 25/9/2020 13:15

Actually, I think CVAs are inappropriately used under normal conditions when businesses are in terminal decline. A government imposed temporary restriction on an otherwise viable business is the situation in which they make sense! Of course your judgement then has to be which models are viable.

[dagsteeth] 25/9/2020 12:59

Sadly, inevitable and why the equity will be worthless - always is in these restructuring situations

[swanvesta] 25/9/2020 12:56

dagsteeth, of course I get your point. You're assuming the very worst, which is appropriate to consider (as the company is clearly doing) but not appropriate to conclude. At any rate, it looks like we'll soon have a clearer picture.

[jacksonyoung] 25/9/2020 12:51

the boards played their hand now forcing landlords to sit and talk, well played

£15 million raised before summer + busy summer (help out to eat out) and now down to mcap of 10 million

shake over, Mark my Ward :)

[jacksonyoung] 25/9/2020 12:09

Revolution has a strong balance sheet following the GBP15m equity fundraising and the extension of its banking facilities announced in June but the Board believes that the long term nature and potential impact of the latest operating restrictions means that it must consider all necessary options to ensure that its business remains viable.

[jacksonyoung] 25/9/2020 12:08

Mark Ward don't agree, this isn't a game over, just a hard shake today.

[thomasearnshaw] 25/9/2020 11:45

Game over man

[dagsteeth] 25/9/2020 11:45

I just don’t get why you don’t get my point. At the time of their last RNS, I was a believer. Since then the 10pm curfew is critical. Revs is a late night operator not a pub and doesn’t cater to pub clientele. The vast majority of its revenue comes after 10pm and from party bookings of more than 6 people. Can’t you see the goalposts have moved? How do you think they can generate revenue before 10 while employing all their staff. Look at the bbc website today, interesting article on late night sector. Deltic’s ceo saying he thinks the sector is toast and thinking that since it is not currently a viable business it won’t even qualify for rishi’s salary top up scheme. I am not making this up. It’s fact.

[swanvesta] 25/9/2020 09:30

I'm just observing the way you spin the available evidence.

Your £3m cashburn is an assumption. How do you know how much of the costs (above your baseline £1.7m) aren't matched by revenue? At 75% LfL they could easily be at operating breakeven before rent etc. They did say they were ahead of base case scenario (nevermind worst case scenario) since reopening.

You state "Worst case was 100pc open by nov". However what they actually stated was "assumed opening date for all sites is November 2020".

Since the base case involved opening earlier at very poor LfL (which they say they have beaten) doesn't it suggest they are currently well ahead of worst case?

And you talk about rent as if it's a new problem. But the worst case scenario assumed no improvement in rent commitments over what had already been secured.

Like I say, they may go down the tubes, but for some reason (which I imagine many here will be able to guess) you're trying to paint the very worst possible picture.

[dagsteeth] 24/9/2020 19:02

Hopefully we are agreed that net debt after the capital raise was £10m and that was for pro forma end of June. My point is that lockdown cash flow out was £1.7m a month but that was with full moratorium on costs and all staff furloughed. As they have reopened, staff costs and working capital for supplies will have kicked in big time, not matched by revenue, hence estimate of £3m cash burn. Worst case was 100pc open by nov. Now we know 11 clubs will not reopen and the rest, thanks to Boris this week, are pared back to be as good as useless til the end of March. So we are way below the worst case, incurring increased costs with no matching revenue. The landlord situation has clearly worsened and they have to now pay the March rent deferral. Total bank facility is £28m so that gives £18m headroom from end of June and If at £3m outflow that’s 6 months from June to dec until they are fully drawn. Then they are bust. Where is the flaw in my analysis? Ps I am well hacked off, since without a second lockdown I thought this was a great recovery play. Now, they won’t survive to ever have the chance to prove it.

[swanvesta] 24/9/2020 16:56

Which RNS do I have in the wrong order?

26/5: net debt £22m
26/6: net debt £22m

Obviously the figures are rounded. But your £3m estimate is based on a period before cost-saving began and includes commitments entered into before covid hit.

In the AIM submission on 27/7, capital is judged adequate for 12 months for the *worst case scenario*, which includes
- sites not opening till *NOVEMBER 2020*
- *NO RENT REDUCTIONS*, beyond those already secured

The most recent trading update says that trading is ahead of the base case scenario (NOT the worst case scenario.) Yet you think the company is in much worse shape than that worst case scenario, which hasn't even transpired yet.

I'm not disputing the company is in a very difficult spot. I'm just pointing out that you seem to be twisting the facts a bit.

[dagsteeth] 24/9/2020 15:50

VAT and staff schemes are lifelines but expected. The 2 issues not covered are rent and revenue. No change to my opinion and I stand by my financial analysis, Swanvesta, you need to re-read RNSs and docs in chronological order