Results round-up
Revolution Bars was under the cosh on Thursday as it warned that adjusted earnings for the year would be in line with last year's results and below analysts' expectations amid challenging trading conditions, with the blamed laid on weather and the absence of a CEO.
In an update for the year to 30 June, the company said it has experienced "challenging and volatile" trading conditions, with sales falling short of expectations. As a result, adjusted earnings before interest, taxes, depreciation and amortisation are expected to be unchanged from last year's £15.1m.
The company said weather has been the most significant factor affecting the sales trend, while the prolonged absence of a chief executive has also played its part.
"The adverse, wintery weather conditions in March combined with the unusually hot weather throughout May and early June, has curtailed typical late-night week-end trading. The sales performance in the last six weeks at sites with significant outside trading areas has performed well relative to last year."
Total sales for the group in the second half to 9 June were up 7.3%, but like-for-like sales were down 1.7%, with both of its brands affected, although the smaller Revolucion de Cuba brand saw LFL sales remain in growth. For the 49 weeks to 9 June 2018, total sales were up 9.1% and LFL sales were 0.5% lower. The company said wet sales performed better than food, particularly in the Revolution estate where little food development and innovation was undertaken in 2017.
"This development is now underway for delivery in Q1 next year," it said.
On a brighter note, the group said the new bars opening programming for the year has been delivered to schedule, with those five bars performing to expectations. In addition, its capex plans for FY19 remain unchanged and the group will open six new sites this year including four large bars in the next four months.
At 1025 BST, the shares were down 8.8% to 142.90p.
Canaccord Genuity said: "Customers stay at home when the weather is dreadful and head to the pub when it's very hot and there's not much night-club and late-night bar operators can do about that, except batten down the costs and wait for the weather to change (as it inevitably does).
"When new CEO Rob Pitcher arrives from Mitchells & Butlers, Revolution would have been without a CEO since mid-October 2017 when Mark McQuater left the building. Nine months is too long without a CEO. We also suspect the tone of the trading statement reflects the desire to clear the decks before the new CEO, Rob Pitcher, arrives on 25 June."
Canaccord cut its price target on the stock to 190p from 210p but maintained its 'buy' stance.
Majestic Wine said on Thursday that it swung to a profit in the year to 2 April 2018 but warned that it expects the market to remain tough.
The company made a profit of £8.3m versus a loss of £1.5m the year before, as revenue rose 2.3% to £476.1m. Meanwhile, the final dividend per share was lifted to 5.2p from 3.6p in 2017.
Naked Wines saw underlying sales growth of 11.3% in the year to £156.1m, with the business growing "considerably" in the US and Australian markets. Adjusted earnings before interest and taxes were up a whopping 571.2% to £8.7m.
Majestic Commercial saw underlying revenues fall 5.6% to £43.5m and EBIT rise 1.7% to £2.4m in the period as the division has been in a holding pattern up until the appointment of a new managing director, Olivia Fitzgerald, in April 2018. Majestic said it was hopeful that this business is now in a position to start to grow again following the investment in the Majestic Retail IT systems and processes.
In Majestic Retail, underlying revenue was 1.9% higher at £263.8m and adjusted EBIT was 0.4% firmer at £13.3m. Lay & Wheeler, meanwhile, saw its revenues edge up 0.2% to £14.5m and EBIT drop 1% to £0.9m.
Majestic Commercial saw revenues fall 5.4% in the period as the division has been in a holding pattern up until the appointment of a new Managing Director, Olivia Fitzgerald, in April 2018. Olivia has extensive sales and hospitality experience, and has jumped straight in. We are hopeful that this business is now in a position to start to grow again following the investment in the Majestic Retail IT systems and processes.
Chief executive Rowan Gormley said: "Naked Wines continues to storm ahead with underlying sales growth of 11.3% in the year. The business has grown considerably in the exciting US and Australian markets and has proved that the digital customer acquisition channel is delivering high quality new customers in addition to our traditional partner channel.
"If the UK is headed for a retail crisis, as some commentators are suggesting, then we are planning for a great crisis. We founded Naked Wines during the financial crisis of 2008 and proved that investing in acquiring customers and generating loyalty through great products and service, will drive profitable growth even in a tough market."