Revolution Bars (LON: RBG) is acquiring the Peach Pub Company, which will help to make the group less dependent on drinks with a greater exposure to food sales.
Revolution Bars is paying £16.5m for Peach Pub, although £500,000 is contingent on future performance. Revolution Bars operates 69 bars and Peach Pub has 21 food-led pubs in the south of England and the Midlands. Food is 53% of sales and there are also revenues from accommodation.
This year, like-for-like sales are more than 10% higher than in 2019. In 2021, Peach Pub generated pre-tax profit of £2.7m, but that was boosted by government assistance. There should be £1.5m of cost savings from combining the businesses at a minimal cost, but they will not be fully achieved until 2024-25.
In the year to 2 July 2022, Revolution Bars revenues were £140.8m and it moved from a loss to a pre-tax loss of £2.1m. Like-for-like growth was 1.3%. There was weaker trading in the fourth quarter. Train strikes and heatwaves have hit the start to the new financial year and like-for-like sales are 10% lower in the first eleven weeks.
The consideration will be funded by the Revolution Bars debt facility and leaves headroom of more than £15m. Revolution Bars will not be opening six new sites this year as previously expected.
