The Revel Collective sees strong Christmas sales but warns of £4m Budget impact

The Revel Collective has reported “robust” festive trading but has warned that the changes announced in the annual Budget will have a £4m impact on its annual profit.

For the weeks from 7 December 2024 to 3 January 2025, the group saw its group like-for-like sales increase by 1.6%.

Prebooked revenue, largely corporate Christmas bookings, also achieved record levels over the festive period in its Revolution and Revolucion De Cuba and was 5.3% ahead of last year.

The group also revealed it had broken its 32 weekly food and drink sales record during the festive period, with the Peach Pubs brand performing the best of its three main brands.

It added that its pubs saw a “strong” H1 performance compared with last year, however, sales in its bar brands during the early part of the financial year were hampered by the uncertainty caused by the delay to the completion of the Revolution Bars Limited Restructuring Plan.

The group stated that although there has been some gradual improvement in sales in its Revolution brand, the late night market “continues to be challenging, and sales have not yet recovered as quickly as we had anticipated”.

Several planned initiatives are in place to “boost profitable growth in the second half”, as previously outlined as part of its Restructuring Plan.

However, the company said that changes announced in the budget are expected to “fully offset these efforts in FY25”.

As a result of lower sales in H1 and higher costs arising from the Budget, which will come into effect for the final quarter of the financial year, the board now expects the IAS 17 EBITDA outcome, driven by the level consumer sentiment, to be in the range of £2.0-£4.0m.

Rob Pitcher, CEO of Revolution Bars Group, said: “The 2024 festive trading period provided us with a fantastic opportunity to showcase what we do best and it was wonderful to see our guests enjoying the parties we hosted. I am particularly pleased with the strong performance in Peach and Founders & Co, which stood out in terms of sales growth.

“However, the younger guests in our bars continue to face challenges with the high cost of living. Additionally, the negative discourse surrounding the Restructuring Plan created uncertainty among our guests and team members. This uncertainty persisted well into FY25, leading to a weaker recovery than we had originally anticipated. We now look forward to a period which will see us implement several new sales initiatives, including launching the new brand proposition for our Revolution brand, just in time for our target guests to receive the 16.3% (18-20 year olds) increase in National Minimum Wage.”

He added: “The newly elected Labour Government’s recent budget announcements, especially the reduction in the National Insurance thresholds for Employers, will have a very damaging impact on the Group. These measures are regressive and offer no clear pathway for economic growth within the hospitality sector. They also pose risks to the employment market. We strongly urge the government to reconsider this policy in particular and explore more balanced alternatives. I’d like to thank our teams for all their dedication and hard work in making the Christmas period such a wonderful experience for our guests.”