Shares of Greater Manchester-based Revolution Bars Group plc fell as much as 20% after it published a further update on its Christmas and first-half trading and outturn for FY24 saying that “January trade has started softly.”

The firm said it “has had to reconsider previous assumptions of LFL growth in the second half of the financial year.”

Revolution said: “As previously reported, group like-for-like sales for the four weeks from 4 to 31 December were +9.0%, the best festive period since 2019.

“Group like-for-like sales for H1, including New Year’s Eve, continued to demonstrate an improving trend at -2.8% for the half …”

However the company added: “Despite strong Christmas trading … and the improving LFL trend throughout H1, January trade has started softly as guests recover from the expense of Christmas.

“With inflation still high, we cannot assume that the 14.8% increase in the NMW for 18 to 20 year olds plus the 9.8% increase for those over 21 from April (total blended 10.8%) flows through to increased discretionary spend for our Revolution guests in particular.

“It is however a material increase in cost in each of our businesses.

“This, together with the recently announced continuation of Aslef train strikes, means that the board has had to reconsider previous assumptions of LFL growth in the second half of the financial year.

“Whilst the business continues to manage costs tightly, the significantly above inflation increases in both business rates and payroll costs set by the Government are a significant additional burden and barrier to growth.

“As a result, the Board now expects IAS 17 EBITDA to be c£3-3.5m.

“Net debt at 23 January 2024 is £20.3m, well within our facility with NatWest, however we will significantly reduce our capex expenditure to reflect this lower EBITDA with all refurbishments deferred until we see trading improve.”

Revolution Bars Group CEO Rob Pitcher said: “The 2023 festive trading period is our best for four years.

“I have been delighted with the strong growth in Peach, Revolución de Cuba and Founders over the festive period.  It was pleasing to see our Revolution guests experience their first uninterrupted Christmas since 2019, driving growth for the brand.

“Revolution’s younger guests are however still feeling the disproportionate effect of the cost-of-living crisis.

“Looking forward, both business rates and national living wage will increase materially in April 2024 and therefore we have had to take the view that, with inflation remaining high, the recovery for the Revolution business, our largest brand, will take longer than we had previously forecast.

“I’d like to thank our teams for all their hard work in making the Christmas period such a success and look forward to the point when the cost of living abates sufficiently for our Revolution guests’ disposable income in particular to improve.”