Shares of Manchester-based Revolution Bars Group plc fell about 32% on Wednesday after it issued a trading update regarding COVID-19.
Revolution Bars said it expects a material deterioration in trading performance and its CEO said the firm “would welcome further Government support.”
“Following the announcement of the group’s interim results on 26 February 2020, the group has continued to perform in line with expectations with sales from like-for-like bars (LFL) up 1.1% for the 37 weeks of the financial period to date,” said the company.
“However, in very recent days, the group has experienced a decline in LFL revenue following the increasing impact of COVID-19.
“Following the UK Government’s announcement late yesterday advising the public to stay away from bars and the actions of other Governments, it is reasonable to expect the trading environment will be very challenging for the foreseeable future.
“As such, the board expects a material deterioration in trading performance for the remainder of the financial period ending 30 June 2020, however, given the continued high level of uncertainty it is not possible to quantify the precise impact at this time.”
To help mitigate the impact of COVID-19 and preserve cash, the company said it is taking actions “to remove cost and non-critical capex” from the business.
These measures include:
– Reduction in payroll costs across the business
– Review and reduction of unprofitable trading sessions
– Reduction in other variable costs such as entertainment and door staff
– Suspension of rent and deferral of business rates
– Requests to defer PAYE and VAT payments
Revolution Bars added: “The group welcomes the Government’s support for the business rates holiday for 12 months announced late yesterday, but this does not go nearly far enough and we hope that there will be further measures in the coming days to provide assistance with payroll entitlements to gain surety for our employees, amongst other things.
“The group’s net debt position as at the end of week 37 (last week) was £10.5m in line with the board’s expectations.
“The board continues to monitor the group’s funding requirements closely and is proactively exploring all the options available …
Revolution Bars CEO Rob Pitcher said: “At this difficult time, we are doing all we can to protect our business and our employees from the COVID-19 virus and any financial hardship its effects may have.
“We would welcome further Government support.
“Whilst we face a very challenging period in the current financial year, we are determined to make the right choices for the group, employees, shareholders and all other stakeholders.”