Revolution Bars Group has raised £ 21million to reduce debt and continue to renovate and expand its sites.
The Manchester-based listed group, which is behind the Revolution and Revolución de Cuba brands, obtained the additional capital by placing new shares on the London Stock Exchange.
In a statement, the group revealed that its net bank debt stood at £ 28.5m as of May 10, 2021, which the board considers a level which “will limit its ability to invest in the renovation and expansion of its field”.
A total of £ 11million will be used to strengthen the group’s balance sheet and cover the costs of fundraising, £ 2.5million will be used to refurbish an additional 15 bars over the next 18 months and £ 7.5million sterling will be used to expand the estate into eight sites in new towns and regions.
CEO Rob Pitcher said: “Thanks to the support of our shareholders and our new investors, this successful fundraising will allow Revolution Bars to emerge from this period of disruption in a strong position with a balance sheet adapted to our needs that offers us continuous financial flexibility, and a great platform from which to deliver for all of our shareholders.
“We now have the firepower to deliver strong, proven returns from renovating the rest of our uninvested bars and the ability to take advantage of the opportunities that will no doubt arise from a very dislocated market.
“We have traded exceptionally since the initial restrictions were lifted. We now look forward to the end of all restrictions and are excited for the next leg of the journey providing the best entertainment and hospitality to our guests.
A statement published on the London Stock Exchange added: “Before the start of the Covid-19 pandemic, the Group was showing signs that the recovery strategy put in place by the board had succeeded, with the group achieving growth at the both to -such as revenue and adjusted EBITDA and significant progress in deleveraging.
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“However, the Covid-19 pandemic has resulted in a significant increase in the group’s indebtedness, notwithstanding the measures taken by management to reduce costs and the group’s cash consumption during a period of significant disruption to the business. , including several extended periods of closure of the estate during the UK government imposed lockdowns and the support provided by shareholders through the equity fundraiser completed in July 2020.
“The board was delighted to be able to resume trading away on April 12, 2021 at 20 bars, ready to rebound to capture pent-up demand and take advantage of the improvements to its brands over the past year.
“The board of directors is delighted with the performance of the 20 bars of this group since the reopening, the group achieving 48% of the sales of the same period 2019 in the 4 weeks until May 9, 2021, against only 15% of the total capacity of bars that were able to trade, far exceeding expectations.
“The board believes that with a more appropriate capital structure, the group is well positioned for solid transactions in a market environment driven by strong pent-up consumer demand, aided by a significant increase in household savings.
“The Board of Directors further believes that such consumer demand will provide the opportunity for solid returns from its property renovation plans, with the group also benefiting from favorable market conditions for the expansion of its field.
“In addition, directors believe there may also be opportunistic prospects for mergers and acquisitions when government support and the rent moratorium end in the summer months.”
The business placement and placement was completed by finnCap and Peel Hunt through an expedited book building process.