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Revolution Bars Group plc Annual Report and Accounts 2021
Revolution Bars Group plc Annual Report and Accounts 2021
BARS...
Contents
STRATEGIC REPORT
GOVERNANCE REPORT
FINANCIAL STATEMENTS
Chief Executive’s Review
Investment Case
COVID-19 Timeline
2 Chairman’s Statement
4 At a Glance
4
6
8 Business Model
10
14 Strategic Framework
16 Strategy in Action
18 Risk Report
20 Financial Review
24 Section 172(1) Statement
26 Operating Responsibly
for our Stakeholders
101 Company Statement
of Changes in Equity
101 Company Statement
of Cash Flow
102 Notes to the Company
Financial Information
105 Glossary
106 Corporate Information
32 Board of Directors
34 Senior Management
35 Governance Section:
Chairman’s Introduction
to Governance
36 Governance
Section: Corporate
Governance Report
40 Board Activity
42
Nomination
Committee Report
44 Audit Committee Report
48 Directors’
Remuneration Report
54 Directors’ Report
58 Statement of Directors’
Responsibilities
62 Independent
70
71
72
73
74
Auditors’ Report
Consolidated
Statement of Profit
or Loss and Other
Comprehensive Income
Consolidated Statement
of Financial Position
Consolidated Statement
of Changes in Equity
Consolidated Statement
of Cash Flow
Notes to the
Consolidated Financial
Information
100 Company Statement
of Financial Position
Revolution Bars Group plc Annual Report and Accounts 2021
1
...operating two market-
leading brands, “Revolution”
and “Revolución de Cuba”.
We have a strong national
presence across the UK but
with significant opportunities
for further expansion and
currently trade from 67 bars
located exclusively in town
or city centre high streets.
Both brands focus on a premium
drinks range and a quality food
offering typically trading from
late morning through into the
late evening.
Purpose
We create fun and
memorable experiences
with our teams and guests.
Vision
The place where everyone
wants to be.
Values
Fun
It’s at the heart of what
we do, it’s who we are.
Have fun, be fun and
create fun.
Integrity
Just doing the right
thing, because it’s the
right thing to do!
Ambition
Always striving to be the
best version of ourselves.
Recognition
Creatively rewarding
and recognising the
achievements of all
our people.
Venues across the UK
Financial highlights
67
Revenue
Gross margin
FY21
£39.4m
FY21
£28.1m
FY20
£110.1m
FY20
£83.5m
£39.4m
£28.1m
APM Adjusted EBITDA*
Loss before tax
(£12.0m)
FY21
(£26.3m)
FY21
FY20
£0.1m
(£31.7m)
FY20
(£12.0m)
(£26.3m)
* Adjusted performance measures exclude exceptional items, share-based payment
charges and bar opening costs (see reconciliation table in the Financial Review).
Governance ReportFinancial StatementsStrategic ReportCompany overview
2 Revolution Bars Group plc Annual Report and Accounts 2021
CHAIRMAN’S
I am pleased that since mid-July
our business has finally been allowed
to trade without restrictions and we
hope that this return to normality
and positivity continues.
FY21 was a year of pandemic-related
challenges, with ongoing changing
restrictions, tiers and lockdowns being
both unpredictable and frustrating.
Our Management expertly navigated and
adapted to the ever-changing field, and
ensured, when allowed to do so, we were
ready to open in a safe environment where
colleagues and guests could return to, and
enjoy, our bars. Although in FY21 we did not
have any weeks of completely “normal” trade,
with some form of restriction in place at all
times, we were very pleased to see our guests
return in numbers when our bars reopened.
During the year we have taken the opportunity
to drive our core strategies. We have made
significant headway in our Diversity and
Inclusion agenda, as well as a real focus on
Wellbeing as our people faced unprecedented
personal challenges throughout the pandemic.
We have made significant investment in
sustainability, winning a prestigious award in
recognition of our success. Management has
taken advantage of lockdown periods to both
enhance and drive the offering at our two
core brands, whilst also opening a third new,
exciting brand in Swansea, and preparing
for a fourth competitive socialising brand
to open FY22 H1.
Our senior management team has shown
exceptional leadership and resilience in the
face of the most extreme circumstances and
taken all appropriate actions to ensure that
our bars could reopen safely when permitted
to do so and to protect and safeguard the
future of the business.
Our business
At the end of the reporting period, the Group
operated 67 premium bars with a strong
presence throughout the UK for its two
high-quality retail brands: Revolution (48 bars),
focused on young adults; and Revolución de
Cuba (18 bars), which attracts a broader age
range. Most of the Group’s sales are derived
from drink and food with some late-night
admission receipts driven by entertainment
completing the sales mix.
We successfully opened a third brand in
FY21, with the introduction of Founders & Co.
- an artisanal market-place experience, and
are set to open our fourth brand, a competitive
socialising experience, in November 2021.
Following the successful recent equity
fundraisings, I’m very pleased to say that
we are emerging from the pandemic with
a strong balance sheet which allows us to
refocus our resource on investment in the
existing estate to improve the underlying
performance of the business, as well as
seeking expansion opportunities. We are in
an excellent position to grow the business,
whether that is organically, through acquisition
of single sites, or acquisition of small groups.
In FY21, a Company Voluntary Arrangement
(“CVA”) was undertaken by the Group’s wholly
owned subsidiary, Revolution Bars Limited.
As part of this process we exited six sites, and
we also surrendered a further two separately
with the respective landlords resulting in an
estate of 67 premium bars as at 15 November
2021. The CVA and landlord negotiations have
delivered significant rent savings; coupled
with other cost-savings where possible,
FY21 was a year of pandemic-related
challenges, with ongoing changing
restrictions, tiers and lockdowns being
both unpredictable and frustrating.”
Keith Edelman, Non-Executive Chairman
Revolution Bars Group plc Annual Report and Accounts 2021
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including a streamlining of our Support
Centre resource and negotiations with other
suppliers, the Board believes the Group is
well-positioned to operate more efficiently
and, longer term, achieve a higher net margin.
I must take this opportunity to thank
our suppliers who have been extremely
supportive by suspending contracts or
agreeing deferred payments, our Board for
their salary sacrifices, the many landlords who
have part-waived rent, NatWest who has been
very supportive and increased our committed
debt facilities, and our shareholders for
supporting our two successful equity
fundraisings. I would also like to acknowledge
the outstanding efforts of Kate Nicholls,
CEO of UKHospitality, who has represented
the hospitality sector with unwavering vigour,
dedication and determination throughout
this challenging period.
Our results
Sales of £39.4 million (2020: £110.1 million)
were 64.2% lower than the previous period
as a result of the various COVID-19 (“COVID”)
lockdowns and restrictions throughout the
entirety of FY21, compared to just the last
14 weeks of FY20. Our statutory loss before
tax for the year of (£26.3) million reflects this
restricted trading period, whereas the prior
year loss before tax includes a significant
exceptional impairment taken during the start
of the COVID pandemic. Adjusted1 EBITDA,
our preferred KPI, is significantly impacted
by IFRS 16 and thus the Directors believe that
business progress is best measured by the
directly comparable IAS 17 Alternative
Performance Measures3 (“APM”) measure
of adjusted1 EBITDA which was (£12.0) million
(2020: £0.1 million). Due to the operational
leverage in the business, the full year
adjusted1 EBITDA performance was severely
impacted by the multiple lockdowns and
ongoing restrictions.
When free to trade without the imposed
COVID restrictions, we are a highly cash
generative business. We secured £20.0 million
of Coronavirus Large Business Interruption
Loan Scheme (“CLBILS”) term loans in FY21,
as well as £34.0 million from the net proceeds
of the two equity fundraisings.
These funds have been used to de-lever the
business and as at the year-end the Group
had net bank debt of £3.6 million compared
to £22.0 million at the end of FY20. As at today,
the Group has cash in bank less all drawings
on the RCF and CLBILS (“net cash”) position
of £4.6 million.
Our Board
As announced in the previous Annual Report,
at the FY20 AGM on 22 December 2020,
Mike Foster retired from the Board as Chief
Financial Officer. On the same day, Danielle
Davies was appointed to the Board in his place
as Chief Financial Officer. The Board continues
to demonstrate significant commitment to the
business over the last 20 months dealing with
the consequences of COVID and to review and
ratify many of the difficult decisions made by
the senior management team and to provide
a sounding board and support to the Executive
Directors given the unprecedented situation.
The Board also showed strong leadership and
empathy for the difficulties that COVID has
caused for most of the Group’s workforce by
agreeing to various waived reductions in salary
throughout the pandemic, until trading could
begin in earnest in May 2021.
Our team members
At the end of the reporting period, the Group
employed around 2,500 people, all of whom
strive to provide the outstanding guest
experience that is at the heart of our strategy.
FY21 has been a year like no other in terms
of the challenges our team members at every
level of the business have faced and I must
pay tribute to their resilience throughout the
lockdown period, their enthusiasm towards
returning to work under extremely difficult
operating conditions, and for their whole-
hearted support of the management team
in the face of some very difficult actions
necessary to safeguard the business. I must
also pay tribute to the senior management
team and indeed all levels of management
who have had to adapt to very different
ways of operating and leading and having
to deal with many matters they could not
have contemplated 20 months ago.
revenue £m
2021
2020
£39.4m
Net bank debt
£3.6m
2020: £22.0M
£110.1m
Our Future
Overall like-for-like2 (“LFL”) revenue generated
in FY22 since 19 July, when restrictions fully
relaxed in England, is up 14% on the equivalent
period in FY20 (the last equivalent normal
trading period). Total revenue in the year
to date is also 137% of the full-year revenue
generated in FY21. We are so pleased to see
a LFL2 increase as a reflection of both the
pent-up demand in our young customer base,
but also as a direct result of the time and
investment which management has given
to driving our customer offering and ensuring
we offer a safe and fun environment where
guests can enjoy amazing experiences.
As at 15 November 2021 we are also pleased
to report a net cash position of £4.6 million.
We continue to operate cautiously, aware
that the risk of COVID has not yet vanished,
but continue to be pleasantly satisfied with
the return to normal trading.
The Financial Review provides information
on liquidity and going concern, and also the
full going concern disclosures, which include
references to material uncertainty, can be
found in note 1.
I cannot end my report without my sincere
thanks to our two Executive Directors,
Rob and Danielle. Throughout the darkest
days, their enthusiasm and motivation never
waivered and in addition to keeping all the
staff involved and engaged they have
managed to complete two equity fundraisings
and a CVA, whilst at the same time led from
the front by taking large salary reductions.
I must also thank my colleagues Jemima
and Will for their support and dedication
throughout the very many Board meetings
to accomplish all of the above.
We have clearly made a good start to the year,
although given the uncertainty in the market it
remains difficult to forecast customer demand.
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Keith Edelman
Non-Executive Chairman
15 November 2021
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GROSS MARGIN £m
APM3 adjusted EBITDA (loss)
£28.1m
2021
2020
(£12.0m)
2020: £0.1M
£83.5m
1 Adjusted performance measures exclude
exceptional items, share-based payment charges
and bar opening costs
2
Like-for-like (LFL) sales are same site sales defined
as sales at only those venues that traded in the same
week in both the current year and comparative
reporting periods
3 APM refers to Alternative Performance Measure
being measures reported on an IAS 17 basis
4 Revolution Bars Group plc Annual Report and Accounts 2021
AT A GLANCE
two premium brands
drinks
food
Entertainment
A wide range of premium cocktails
and vodka focused drinks
Signature pizzas and burgers
supported by delicious
grazing dishes
Delivering the party spirit since 1996,
the best place to celebrate any
occasion with our amazing DJs
Rum-led cocktails and Latin
American inspired drinks
Cuban and Latin American inspired
tapas focused food menu
Authentic live Latin music
and dance productions
INVESTMENT
Our talented management
team are focused on our strategy
and core strengths are beginning
to yield results.
Management is ready to drive the trading performance, refurbishments,
expansion of the estate, and exciting new brands. Recent fundraising
allows the Group to accelerate the refurb programme.
Two Exciting
premium brands
Revolution has been delivering
the party spirit since 1996 and
continues to be famed for creating
fun and memorable experiences
Revolución de Cuba brand presents
relatively high barriers to entry and
delivers a highly differentiated offer
in the marketplace
Exciting introduction of a further
two new brands:
•
•
Founders & Co. – an eclectic
mix of independent food
vendors, makers, sellers, and
creators all under one roof
Our exciting fourth concept
– a competitive socialising
concept with a nostalgic nod
to the games found at a British
seaside pier coupled with
amazing pizza and cocktails
Read more on page 4
Revolution Bars Group plc Annual Report and Accounts 2021 5
venues across the uk
Our first Revolution bar opened
in Manchester in 1996, and now
we have 48 bars across the UK.
Our first Revolución de Cuba
bar opened in Sheffield in 2011,
and we now operate 18 bars
across the UK.
We opened our first Founders
& Co. in Swansea in June 2021.
7 Scotland
12 North-East
11 North-West
12 Midlands
3 Wales
13 South-East
8 South-West
1
Northern Ireland*
18
1
67Total venues
49
Revolution
Revolución de Cuba
Founders & Co
*
Revolución de Cuba only in Northern Ireland
Clear strategy
in place
Building guest loyalty
Driving sustained
profit improvement
Developing and expanding
our estate
Investing in:
• Our teams
• Our brands
• Our estate
The right
team and strong
culture
Experienced Executive team
empowered by the Board to
maximise trading post COVID-19
Purpose, Vision and
Values embedded throughout
the businesses
Focus on safeguarding
our colleagues and guests
Engaging our 3,000-strong
passionate team
Attracting new talent and
new thinking
Financially
well structured
Strong cash generation
Significantly improved liquidity from
increased debt financing, including
£20.0 million Coronavirus Large
Business Interruption Loan Scheme
(CLBILS) loan and £34.0 million
of net equity fundraises
Debt target to below one times
APM (IAS 17) adjusted EBITDA
Read more on pages 14 to 17
Read more on pages 32 to 35
Read more on pages 20 to 23
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6 Revolution Bars Group plc Annual Report and Accounts 2021
COVID-19
After months of uncertainty and
restrictions, we’ve finally brought
the party back!
The last year has allowed Management time to consolidate and focus
on strategy. Now restrictions are lifted, we are excited to see pent-up
demand bringing our guests back to us in numbers that have exceeded
our expectations.
A Summer of trade
Gradual reopening of our bars from
July to September. Although heavy
restrictions reduced capacity, we traded
well when allowed to do so. Aided by the
newly developed App and Order and
Pay at table facility which allowed a safe
environment for our guests and teams.
Investing in our
guest experience
The Group focused efforts on online
trade to counter periods of closure and
for those guests not ready to return to
bars. Live DJ sets operated on social
media, and we took Revolución de Cuba
into people’s homes with the development
of our online product offering and
cocktail masterclasses.
Preparing to reopen our doors
The majority of landlord deals now
concluded, making cash rent savings
of £6.0 million across the estate. With the
announcement of trading commencing
from April 2021, the Group saw huge
pent-up demand and increases in
bookings in advance of reopening our
doors. We continued to communicate
virtually with our colleagues on a regular
basis in advance of returning to work.
Q1 2020/21
JULY
AUG
SEPT
Q2 2020/21
OCT
NOV
DEC
Q3 2020/21
JAN
FEB
MAR
Cautious reopening over Summer
• Reopening of hospitality from
Various trading conditions
• CVA announced and concluded
4 July 2020
• Eat Out to Help Out aided recovery
• £15.0 million gross, £14.1 million
net, fundraising achieved and delist
to AIM
resulting in exit of six loss-making
bars and various other rent reductions
across remaining estate
• Curfews, varying tiers of restrictions,
second lockdown from 5 November,
and all bars closed by 31 December,
thereby missing NYE trading
• Continued focus on our online
offering and guest experience
The third Lockdown
• Third lockdown for over three months
from 6 January 2021 until we could
reopen outdoor spaces, and over
four months before indoor trading
• Continued cost reduction focus
whilst not trading, making sensible
and fair agreements with suppliers
• Management took this time
to consolidate plans and work
on two new brands
Revolution Bars Group plc Annual Report and Accounts 2021
7
The second Fundraising
The Group raised gross £21.0 million,
net £19.9 million, to refocus energies
on deleveraging the business, accelerate
its existing site refurbishment programme
and to take advantage of favourable
market conditions for estate expansion.
Bringing the party back
With the end of social distancing,
the Group fully reopened for late-night
trading, vertical drinking, live music
and dancing. A pleasing performance
across our bars is seen due to the hard
work done to refine and enhance our
brand, together with the excitement
our guests feel to finally be allowed
to enjoy themselves.
Return of students
September saw the return of students
and the exciting, high-energy events
that Revolution is known for offering.
With continued positive custom,
the Group was very pleased to
exceed the total revenue of FY21
after 14 weeks of trading in FY22.
Q4 2020/21
APR
MAY
JUN
Q1 2021/22
JULY
AUG
SEPT
Q2 2021/22
OCT
NOV
DEC
A return to trading
• A second fundraising is achieved
of net £19.9 million, and further
£3.5 million CLBILS loan secured
Release of restrictions
• Social distancing restrictions in
England relaxed from 19 July allowing
the party to really get started
Cautiously optimistic
• After 14 weeks of trading in FY22,
the Group exceeds total revenue
generated in the entirety of FY21
• Outdoor trading in England restarts
• Gradual releasing of devolved
• Launch of new exciting fourth concept
from 12 April and indoors from 17 May
nation’s restrictions
• Full release of restrictions in England
delayed from 21 June to 19 July, and
new brand Founders & Co. prepares
to open
• End of the Coronavirus Job
Retention Scheme
in Northampton, a competitive
socialising concept coupled with
amazing pizzas and cocktails
• Looking forwards to continued
normal trading and offering our guests
fun and memorable experiences
Governance ReportFinancial StatementsStrategic ReportCompany overview 8 Revolution Bars Group plc Annual Report and Accounts 2021
BUSINESS
Our business model is built on solid foundations that are
enabling us to recover quickly from the COVID-19 disruption.
Leveraging our sources
of competitive advantage
Creating value from our
customer proposition
Two established and recognised brands
• Revolution and Revolución de Cuba, both of which are
synonymous with a fun night out
• Two new brands, Founders & Co. and our fourth concept
New brands launched
2
Improved estate quality
• Leases of six sites exited through CVA process
in the period, and a further two loss-making sites
also surrendered
Sites exited in the year
8
Experienced team and skilled staff
• Highly experienced and dedicated Executive team
empowered by the Board to reposition business during
the COVID-19 period and drive the business forwards
now conditions allow
Employees at period-end
2,495
Strong financial structure
• Two fundraisings securing £34.0 million net cash,
and strong cash generation after reopening
VENUES
VENUES
FOOD
FOOD
ENTERTAINMENT
AND ENERGY
ENTERTAINMENT
AND ENERGY
Net bank debt at year-end
£3.6m
Maximising
value
1
Strong expansion
strategy
See page 5
2
Embedded
values
See page 26
Revolution Bars Group plc Annual Report and Accounts 2021
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Creating value from our
customer proposition
Sharing value with
our stakeholders
Guests
• Fun and safe night out for our predominantly
female guests
Percentage of our colleagues under 30
72%
VENUES
Large, characterful spaces
DRINKS
Two thirds of drinks
sales from cocktails
and spirits
Colleagues
• Rewarding roles, with opportunities for advancement
Percentage of our people who feel the Group
has an inclusive culture
DRINKSDRINKS
86%
ENTERTAINMENT
AND ENERGY
Live music, DJs
and entertainers
Shareholders
• Exceeded FY21 total revenue after first 14 weeks
of FY22, and business is currently in net cash position
Net cash as at 15 November 2021
£4.6M
ENTERTAINMENT
AND ENERGY
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FOOD
All-day menus that
are both delicious and
Instagram worthy
Communities
• Vibrant bars and job opportunities at the heart
of communities
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Locations
67
3
Robust risk
management
See page 18
4
Sound
governance
See page 36
10 Revolution Bars Group plc Annual Report and Accounts 2021
CHIEF EXECUTIVE’S
During the 53 weeks ended 3 July 2021, our
business has traded as well as we could have
expected in the face of the enforced restrictions.
Business review
During the 53 weeks ended 3 July
2021, our business has traded as
well as we could have expected in
the face of the enforced restrictions,
although this has in no way been
a reflection of the true performance
we can deliver when allowed to do
so without restrictions. The Group
has been unable to trade for 47%
of the year, with varying restrictions
in place for the remainder of the year.
Despite this significant impact on
our business, I am very proud of
the performance and perseverance
displayed by our colleagues during
the periods of trading. COVID-19
(“COVID”) has had a significant impact
on city centre late-night hospitality,
which has been disproportionately
disadvantaged by Government
messaging and restrictions. This
includes the instructions, at various
times during the pandemic, to work
from home, curfews, Rule of 6, social
distancing, and to avoid the use of
public transport wherever possible.
The Group has had to endure varying abilities
to trade; the financial year began relatively
positively with the phased reopening of our
bars from 6 July 2020, after the first lockdown,
further enhanced by the Government’s
“Eat Out to Help Out” campaign. Despite this,
summer trading was severely impacted by
COVID restrictions, with the table-service-only
instruction affecting our ability to operate our
bars to normal capacity levels, trade the late
hours our guests are accustomed to, and
provide guests with the fun experiences they
know and love us for.
After relatively stable, yet challenging,
trading conditions in the summer the Group
faced further unprecedented constantly
changing restrictions, with a further lockdown
in November, and highly restricted trading
in December. Understanding and adapting
quickly to the latest Government guidance,
and ensuring a high level of safety for our
teams and guests, has been of the utmost
importance to management during the year.
The second half of the year began with
a 14-week third lockdown, lasting until outdoor
trading was allowed in England from 12 April
2021 when we were pleased to open 20 bars.
This followed with indoor trading, still under
restrictions, from 17 May 2021 when we had
63 bars from our portfolio open and trading.
After this, the Group looked forward to a return
to normal trading on 21 June 2021 and was
disappointed to learn of the delay to “freedom
day” until 19 July 2021. The challenges faced,
and trading levels seen, with varying rules
and restrictions has been exacerbated by
the differing home nation rules, with highly
disproportionate trading between the home
nations as a direct result of the ongoing
restrictions following the third lockdown
in Wales, Scotland and Northern Ireland.
Aside from keeping on top of the ever-
changing landscape, our priority has been to
put people first. The safety of our colleagues
and guests is paramount and we have taken
all measures possible, from ensuring our bars
met the highest safety standards, to a cautious
approach to reopening, including choosing
not to reopen on Saturday 4 July 2020 as the
Board considered that a potentially very busy
Saturday was not the right environment to
open in the best interest of our colleagues.
Despite up to 98.5% of our colleagues being
on furlough at times through the lockdowns,
team engagement has increased with the
introduction of regular virtual team briefings
ensuring all our colleagues are kept abreast
of developments. We also ensured all
colleagues had pre-opening refresher training
where relevant to deliver the standards our
guests expect, but most importantly to ensure
people felt comfortable and ready to return.
Following the announcement of the roadmap,
we were really excited to host a virtual
“Welcome home party” for all our colleagues
where we could explain our plans and
strategies, and reinvigorate them for an
exciting return to the bars.
To ensure the continued success of the
Group, Management has also focussed on
financial strength for relaunching the business.
Within the financial year, the Group secured
£20.0 million of Coronavirus Large Business
Interruption Loan Scheme (“CLBILS”) term
loans, and achieved a total net fundraising
(across two fundraisings) of £34.0 million.
These funds have been used to pay down
the existing Revolving Credit Facility, and we
end the financial period with a strong balance
sheet with net bank debt of £3.6 million (2020:
£22.0 million). Today the Group has a net cash
position of £4.6 million. This provides us with
a solid platform to relaunch the business and
focus on starting to grow.
I am very proud of the performance and
perserverence displayed by our colleagues
during the periods of trading.”
Rob Pitcher, Chief Executive Officer
Revolution Bars Group plc Annual Report and Accounts 2021
11
Strategic priorities
The strategic priorities set for FY21 are making great progress, despite the distraction of COVID, with some of the
highlights set out below:
Investing in our team:
• created a new immersive induction scheme,
launched in time for reopening, so all our
new colleagues could enjoy the benefit;
• after the challenges of COVID and furlough,
a mass recruitment drive increased our
team from approximately 2,000 at the point
of reopening for outdoor trading in April
2021, to 2,500 by the beginning of July
2021, and to over 2,900 by August 2021;
•
“Set for Success” Management team
restructure implemented to ensure
we can deliver our strategy effectively;
• Diversity and Inclusion (“D&I”) champions
recruited from across the entire workforce
to set up a new D&I advisory Board;
• collaboration with “Wiser”, to formulate
our long-term D&I strategy;
• Partnered with “So Let’s Talk” enabling
the provision of education, events,
training and activities on all aspects
of mental, physical and financial health
relevant to the hospitality industry; and
• a virtual “Welcome home party”
to reinvigorate and engage our
colleagues prior to reopening.
Group strategic objectives
Investing in our brands
and guest experience:
• a major focus on our digital capabilities,
the urgency for which became much
greater in order to operate effectively
under the imposed COVID restrictions.
Building on the success seen in FY20,
the Revolution App now has 923,000
registered users, up from 230,000
in February 2020, and we’ve seen over
90% of all sales made at times via the
App when open;
•
increased focus on meaningful online
interactions via social media such as
online cocktail masterclasses, live DJ
sets, exercise classes and yoga tutorials;
• over 1,300 bottles of our Revolution
Flavoured vodkas sold via our online
shop in the year; and
• development of our competitive socialising
concept, ready for launch in H1 FY22.
•
Investing in our estate:
• one new opening, completed in FY21
H2, with the launch of our new brand,
Founders & Co., in Swansea. This
brand offers artisanal food from local
entrepreneurs, gifts and homewares from
our emporium, a co-working coffee shop
space, an off-licence, plus a range of
hand-crafted cocktails in a marketplace
style venue. Delivering a safe and fun
environment for likeminded groups and
families across the entire day and evening;
• one refurbishment delivered in FY21 H2
at our busiest bar, Manchester Revolución
de Cuba, ensuring it was primed and
ready for reopening;
• all other planned refurbishments
were halted to protect liquidity through
closure periods, but essential repairs
and maintenance work continued to
allow a successful estate relaunch;
the most recent June 2021 fundraising
allows the business to refocus on growth
and refurbishments, and an accelerated
refurbishment programme started in FY22
H1 has already delivered refurbishments
at 3 Revolution bars. It has also allowed
us to build our new site pipeline with
confidence; and
• a real drive forwards in our sustainability
programme, winning a prestigious
Green Apple Award for Environmental
Best Practice, recognising the great
achievements accomplished so far
in energy and waste reduction.
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Our three strategic objectives are now more relevant than ever; these being:
Driving sustained
1
Building
guest loyalty
2
profit improvement 3
Development
of our estate
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Number of users
of the Revolution App
923,000
Expected new sites across FY22
and FY23
8
New brands launched in 2021
Refurbishments in FY22 so far
2
3
These three pillars continue to be our guiding
principles and drive our long-term decision-
making. Our three-year plan, mapped out over
two years ago, made clear that our initial focus
was on the first two objectives but suggested
that we expected to be able to start planning
for estate expansion at the end of FY20. Whilst
the disruption caused by COVID has set back
our timescales for expansion, we believe that
post COVID, our market place and the
competitive landscape will be fundamentally
different and there will be good opportunities
for our brands to expand their estates at
a much lower level of investment.
12 Revolution Bars Group plc Annual Report and Accounts 2021
CHIEF EXECUTIVE’S
Strategic priorities for FY22
COVID has continued to dominate the
strategic direction of the Group in FY21;
necessarily our day to day actions have
focused on adapting our operations in
accordance with the constantly changing
rules and guidance issued by the various
UK statutory authorities. Our priorities remain
the health and safety of all our colleagues
and guests, ensuring that we can trade
viably and are doing everything possible
to safeguard the future of the business.
We have come out of the pandemic stronger
than ever, and our equity fundraisings and
current net cash position provide a solid
platform on which to grow the business.
We are evolving our two core brands, with
stronger propositions following increased
focus during lockdowns, and are so excited
to see our two new brands come to fruition.
Founders & Co. launched at the very end of
FY21, and we’ve been pleased to see positive
feedback and performance, and we will be
launching the second new brand in FY22 H1,
a competitive socialising concept with a
nostalgic nod to the games found at a British
seaside pier coupled with amazing pizza
and cocktails. Management is also actively
seeking good value acquisition opportunities,
whether that be single sites or small groups.
With these exciting plans and focus for
FY22, we remain committed to the following
strategic priorities in FY22:
Investing in our team:
• health & wellness partnerships established
to build on mental health first aid training;
•
remapping and reinvigorating the
career paths for both front-of-house and
back-of-house team members including
the development of our apprenticeships
programme;
• progressive approach to moving away from
being a national minimum wage employer;
• huge focus on D&I at the 2021 conference,
introducing the “Inclusion Revolution”
– our quest to be the place where
everyone wants to be through an even
more diverse and inclusive business; and
•
further training and education for
colleagues in collaboration with our
Wellbeing partners.
Investing in our brands
and guest experience:
•
•
introduction of a new guest feedback
platform, “Feed It Back”, to harness even
greater insights from our guests allowing
us to deliver the excellent experiences
they expect;
refining the customer service journey
through further development of Order
& Pay at table to relieve the ongoing
challenges of queuing at the bar, and allow
a smoother guest experience;
• maximising our market-leading position
for hosting the biggest party on the high
street at Revolution;
• capitalising on the demand for live music
with the continued development of this
Revolución de Cuba fame-point; and
• maximise the return-to-the-office
opportunity through our corporate
sales team.
Investing in our estate:
•
recent fundraisings have allowed
a returned focus on growth and new
site acquisition, with planned delivery
of eight new sites across the next two
financial years, expecting the majority
to be delivered in FY23;
•
launching our competitive socialising
brand, trial site to open in November 2021;
• delivery of our largest single year
refurbishment plan, comprising 19 sites;
• assessment of value-accretive acquisition
opportunities; and
•
implementation of the RBG Sustainability
Charter, recently becoming the UK’s first
bar group to commit to Science-Based
Targets to achieve Net Zero before 2030.
Market outlook
Following the delay to “freedom day”, the
Group is now enjoying largely unrestricted
trading and getting back to what it does
best. We continue to be comforted by the
successful vaccine rollout, with 80% of the
adult population now with two doeses, which
is well above initial Government expectations.
Our young guest base are at the lowest
risk of becoming seriously ill, and because
of this we continue to see their excitement
and enthusiasm to party resulting in full
bars and very strong trading.
As a result of the successful vaccine rollout,
we see vaccine passports as an unnecessary
administrative burden on businesses that
will not have a significant positive impact
on increased health outcomes. We hope
the Government recognises the challenges
the Hospitality industry has faced in the last
20 months, and that the economy cannot take
another lockdown. We are at a point where we
are so excited to be open and trading, seeing
our guests enjoying themselves – COVID is
now something we have to live with and we
should not go back to further lockdowns or
significant restrictions. In a normal year we
generate approximately £48.0 million in
taxation and duty for the Government, which
amounts to over 40% of normal sales.
The Government should be mindful of
the amount of tax revenue generated for
the Exchequer by bar companies such as
Revolution and the wider Hospitality sector
which would be lost as a result of the
imposition of future lockdowns or restrictions.
The UK Government must recognise the
urgent need to introduce business rates
reform; UKHospitality estimates the Hospitality
industry overpays £2.4bn each year; following
the pandemic, which hit the Hospitality
industry particularly hard, there is undue
pressure and expense on heavily indebted
businesses who are trying to rebuild. UK high
streets are seeing the effects of the dated
and inefficient system, causing serious unjust
imbalances in the rates businesses are paying.
We recognise an online sales tax could be
hard to implement, but just because
something is difficult doesn’t mean it shouldn’t
happen, and we would welcome any reform
which alleviates the very serious problem
causing undue burden and expense.
The Hospitality industry provides a safe
and fun environment which brings people
together; the importance of human
connections on mental health are more
important now than ever, after prolonged
periods of isolation. We love nothing more
than seeing our guests coming back to us,
reconnecting with friends and family alike,
and making sure we’re the place where
everyone wants to be. It is clear that our young
guest base are out in force and making up for
lost time; they need to be free to live their lives
as those in previous generations have been.
This is against the challenging backdrop of
the reopening of hospitality, where there is a
shortage of available workforce and input cost
pressures across the supply chain. We would
encourage the Government to maintain the
current reduced VAT of 12.5% for non-alcohol
beverages and food.
Current Trading
We were very disappointed with the delay to
“freedom day” from 21 June to 19 July 2021, as
we recognised our young guests’ desperation
to be allowed out for late-night events, vertical
drinking, dancing and having a party. The delay
further drove demand, and upon the release
of restrictions we’ve been very pleased to
see sales have exceeded our expectations.
In the first 14 weeks of FY22 we have already
generated more revenue than during the whole
of FY21. Our bars are predominantly city centre
based, and the whole UK has seen city centres
fill with young people ready to get on with their
lives, and we’re delighted that many of them are
celebrating in our bars. Please reference the
going concern disclosures for information
Welcome Home Party
Revolution Bars Group plc Annual Report and Accounts 2021
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Our Team
The last 20 months, dealing with COVID and
the related fall-out in terms of its impact on
our business and the many difficult decisions
we have had to make to safeguard its future,
has been an immense challenge for all our
colleagues. Throughout this period, I have
been amazed and uplifted by unsolicited
feedback and support from our team members
acknowledging the efforts and achievements
of the senior team to keep the Revolution Bars
Group family together and their generosity
of spirit in dealing with those very difficult
decisions and the circumstances generally,
and I would like to take this opportunity to
thank all our colleagues. I feel very proud and
very fortunate to lead such a great team and
continue to recognise the ongoing challenges
our people face operating in the current
environment.
Rob Pitcher
Chief Executive Officer
15 November 2021
on liquidity, which include references
to material uncertainty, in note 1.
which we have previously been unable
to accommodate.
As previously mentioned, the difference in
restrictions between the home nations has
caused highly differing trading conditions
and results; we are particularly disappointed
with the approach taken with Scotland and
Northern Ireland which has maintained
significant restrictions far longer than England
and Wales. The introduction of vaccine
passports in Scotland and Wales is extremely
disappointing and is this year’s version of
“needing to eat a scotch egg to drink a pint in
a pub”. However, restrictions on foreign travel
have been beneficial to us with most people
staying in the UK for a “staycation”; we offer
a fun environment where people can enjoy
a brunch with friends, a lunch with colleagues,
a family dinner, or a full night out and because
of this all-day offering we’ve benefitted from
people staying in the UK for their holidays.
Alongside Christmas, the return of students
from September is one of the most valuable
trading periods of the year. After months of
online study, young students are out enjoying
themselves and have returned to university
towns. We ensured a strong student offering,
with appropriate marketing and promotional
strategies to encourage them into our bars.
Christmas bookings have been building more
slowly than we would normally expect, which
we believe is due to a level of uncertainty
around the “return to office” and the UK
Government COVID autumn and winter plan;
this leads us to believe the shape of Christmas
trading will be different, including smaller
parties and much higher levels of walk-ins
Following the return to trading from 12 April
2021, we have faced the same challenges
as the rest of the Hospitality sector with team
member recruitment, supply chain issues
and industry cost pressures including utilities,
and are mitigating these challenges wherever
possible. Utility rates are largely fixed until
April 2023. Notwithstanding these challenges,
we are pleased to have built our team back
up from approximately 2,000 at the point of
reopening for outdoor trading in April 2021,
to over 3,000 by November 2021. We are
proud to continue attracting a high-quality,
dedicated and diverse workforce, providing
rewarding jobs for young adults to start
their careers.
We have also been very proud of the launch
of our third brand, Founders & Co. The new
venture, in Swansea, has been performing
well so far and receiving positive guest
feedback. We are building a great business
in partnership with our Founders, the food
traders we collaborate with, and continue
to offer a variety of events and reasons for
our guests to keep returning. The test site for
our fourth brand will open in November 2021,
offering a competitive socialising experience,
and we couldn’t be more excited to see our
guests reaction to this new offering.
We are very pleased with the advancements
in brand offerings, D&I, sustainability and the
guest journey furthered in the year. We are
seeing the results of this, with guests enjoying
themselves in our bars, which adds further
confidence in the full year outlook.
welcome home party
On 14 May 2021 the entire Group
got together virtually for our Welcome
Home Party.
Bar staff and Support Centre alike met
(socially distanced, of course!) in their local
bars to view Rob Pitcher and the rest of the
Exec team deliver key messages and get
everyone in the party spirit before reopening
our internal spaces on 17 May 2021.
Confidence in leadership
79%
Governance ReportFinancial StatementsStrategic Report
14 Revolution Bars Group plc Annual Report and Accounts 2021
STRATEGIC
Strong delivery when allowed to trade, and advancement
of customer proposition strategy. Cost reductions and
fundraisings allowing the Group to come out of COVID-19
with a strong cash position for future investment in new
sites and refurbishments.
FY21 Strategic priorities
Invest in our team,
our brands and guest
experience and our
core estate
Net bank debt reduction
targeting below one times
APM (IAS 17) adjusted
EBITDA
Deliver workstreams
The Group has faced unprecedented
trading conditions over the last year
but it has been really exciting to see
an excellent return to positive trading
since the release of social distancing
restrictions on 19 July 2021, with the
return of partying, vertical drinking
and dancing.
During periods of closure or reduced trade,
Management has taken the opportunity
to focus on cost reduction and cash liquidity
through ongoing negotiations with suppliers
and landlords, securing a total of £20.0 million
of CLBILS loans, and achieving a total gross
proceeds via fundraisings of £36.0 million
(£34.0 million net). This funding has allowed the
business to come out of COVID-19 with a level
of net bank debt not seen since before the
pandemic, and places the Group in an excellent
position to further an enhanced refurbishment
plan and take advantage of favourable market
conditions for estate expansion.
The Group is pleased to see a return to the
late-night trading, which it has historically
been known for. However, COVID-19 gave the
Group the opportunity to focus on building
daytime trade through greater emphasis
on food and brunch offerings. Customer
feedback has been very encouraging, and
since reopening for trade in April 2021 we
have seen an increase in daytime guest visits
and sales. This, coupled with the excitement
of late-night trade, has allowed the Group
to come out of the pandemic in a stronger
trading position than ever and we’re very
excited to continue to grow.
Customer proposition
Workstream
• Female customer at heart
of both our major brand
propositions; focus on
clean, well-maintained,
safe environments
• Focus on online offerings and
marketing – Cocktail Making,
virtual entertainment
Progress
• Bottomless Brunch bookings
seeing increased popularity
in shift to daytime trade
• Friday evening guided rum
tastings provided by leading
brand ambassadors for up
to 500 people at a time
• New Revolution food menu
launched August 2021
KPIs
• 4.5 feedback rating in
Revolution (FY20: 4.5)
and Revolución de Cuba
at 4.3 (FY20: 4.4)
• 240 new events launched
prior to onset of COVID
Next Steps
• Maintain high level of
feedback response both
centrally and at our bars
• Finding more ways of
delivering what our
customers want
• Continue innovating and
refreshing our drinks offer
by working with key
brand owners
Revolution Bars Group plc Annual Report and Accounts 2021
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Team engagement
Workstream
• Training available to all staff
• Encouragement for all staff
to live and breathe fun into
their jobs
• Bringing our teams back
to work safely
• Regular updates to all team
members throughout lockdown,
including those on furlough
Digital journey
Workstream
• New App features to
enhance customer loyalty
• New Party Booking and
management system
• Revamped music offerings
in all our bars
Sales generation
Workstream
• Focus on daytime
offerings like food, brunch
and themed events
• Reduced level of discounts
given lower footfall and
operating capacity reductions
to protect margin
• Selling fun times and happy,
memorable experiences
Cost Leadership
Workstream
• Re-engineered menus
with focus on cost-effective
products to improve margin
and improve speed of service
• Partnering with cost reduction
specialist incentivised to
reduce costs on all non-resale
product spend
• Support from suppliers in
challenging market conditions
Estate development
Workstream
• Continued focus during
2020/21 on exiting
underperforming sites
•
Investment in making bars
COVID-safe to ensure customer
confidence on reopening
post lockdown
• Rent reductions via
negotiations with landlords
Progress
• Collaborating to further
both our Wellbeing and
D&I agendas
KPIs
• Digital “Welcome Home”
party before indoor
reopening in May 2021
• Continued utilistion of our
•
Quality of Life survey across
all colleagues
• New D&I Board represented
across entire workforce
“Rob’s Recaps” newsletter
launched and released
every month with updates
and good news
• New employee food
menu for teams on shift
• Virtual communication
sessions for site and
support office
Next Steps
• Continued support of our
venue-based staff to help
them deliver an amazing
customer experience
• Further development
around our employee
welfare, and diversity
and inclusion policies
Progress
• Over 923,000 registered
downloads of the App
since launch
• Order and pay at table
via the App
KPIs
• Over 90% of sales made
Next Steps
• Continued development
via the App since reopening
of the Apps
• Over 80% of bookings
are made via our
booking system
• Further use of technology in
delivering customer journey
• Online sales from cocktail
kits and masterclasses
• Over 1.2 million followers
on Social Media
Progress
• Cocktail “make at home”
kits delivered through
lockdowns
• Menu adaption and
changes in bar ergonomics
to drive sales
•
Increased personalisation
of goods, including birthday
Revolution Flavour and
Ciroc Vodka
KPIs
• At issue of report,
like-for-like sales since
19 July 2021 were up
14% on FY20
• Over 1,000 bottles of
our famous Revolution
Flavour delivered
to people’s homes
• Revolution’s 25th and
Revolución de Cuba’s
10th birthdays this year
• New Revolution food
menu with increased
focus on vegan offering
Next Steps
• Cocktail Masterclasses
offered direct to your table
• Relaunch of high-energy
entertainment packages
(Saturday X and Saturday Y)
when late-night trading was
allowed to resume
• Focus on profit generation
during peak evening trade
Progress
•
19% reduction in energy
usage since 2017
• Effective use of Government
support including furlough
and grants
• Restructure of Support
Centre teams for maximum
efficiency and right people
in the right place
KPIs
• Cash burn rate reduced
to £0.4M per week during
lockdown, including rent
• Significant cash savings
through payment holidays
and suspension of
contracts through lockdown
Next Steps
• Ongoing focus on how
to minimise the impact
from National Living
Wage increases
• Continued process
simplification and increased
speed of service
• Zero Heroes in all our bars
pushing sustainability and
energy reductions
• Focus on maximisation
of App sales and efficiency
of product delivery
Progress
• Realigned property team
KPIs
• 3 bars already refurbished
to best address key focuses
and focus on refurbishments
• Significant investment
in PPE, screens, sanitiser,
signage, all making a
COVID-safe environment
for staff and customers
• Company Voluntary
Agreement (CVA) for
Revolution Bars Limited
completed
in FY22
• Two loss-making leases
surrendered during the
period
• CVA – exiting further six
underperforming bars
• Total cash rent savings
across the estate since start
of COVID-19 of £6.0 million
Next Steps
• Using fundraising funds
to launch enhanced
refurbishment scheme
• Ready to take advantage of
favourable market conditions
for estate expansion
• Ongoing negotiations with
landlords for continued
improved rental terms
Governance ReportFinancial StatementsStrategic ReportCompany overview 16 Revolution Bars Group plc Annual Report and Accounts 2021
STRATEGY IN
Investment in our
customer
experience
In a world increasingly focused on
digital entertainment, we recognise
that when people get together they
expect something extraordinary.
Our vision is to be the place where
everyone wants to be, and the way
to achieve that is offering truly
exciting experiences, and a fun and
safe environment, to our guests.
CUSTOMER PROPOSITION strategies
When COVID-19 resulted in the enforced
closure of our businesses, we took the
opportunity to prioritise our strategy, ensuring
we were able to operate in a safe and secure
environment and be compliant with the
operating restrictions, as well as preparing for
the relaxation of restrictions. We significantly
accelerated our digital offering via the
development of “Order and Pay at table”,
the App, and our online booking platform
for periods of closure, and also enhanced our
customer in-bar proposition for COVID-safe
trade through the development of “at table
Masterclasses” and a focus on queue
management.
Bring the party back!
• Exclusive partnerships with our
favourite suppliers to offer our
customers something they can’t get
anywhere else – in celebration of
Revolution’s 25th birthday we offered
personalised birthday bottles of Ciroc
vodka so guests could party with us,
as well as special birthday editions
of our very own Revolution Flavour;
•
recent introduction with Absolut to
bring guests “Pimp your Pornstar”
– the ability to upgrade the well-known
cocktail with your choice of flavour;
• complete revamp of our music
offering, taking you from cool daytime
vibes, live bands after work, to the
true party-starting bangers at night;
• going big on Bank holidays – offering
our customers all day brunching,
including our new Ibiza Brunch,
and going on into the night with
our famous Saturday X events; and
• our fabulous kitchen staff have
created some of the tasty treats that
feature in our new 2021 Revolution
menu, such as the Crispy Mac ‘N’
Cheese Bites by Elliot, our Kitchen
Manager at Wilmslow, or the Buffalo
Crispy Chicken Pizza by Drew, our
Kitchen Manager at Cambridge.
Trading under the new normal
•
Introduction of our “at table
Masterclass” via trolley, for use during
periods of restriction and customers
more careful about returning to
our bars. This was also designed
to accommodate a lower number of
guests than the at-bar masterclasses,
opening up new opportunities;
• analysis of App trends as we move
back to trade without restrictions.
Effective queue-at-bar management
where we can ensure App orders get
the same focus as in-person orders;
•
•
following increased custom in
daytime trade, we launched our
new “Revs Afternoon Tea” – not your
average Afternoon Tea; when we say
we’ve given your standard tea sippin’
session a sprinkle of Revs spice,
we’ve added the whole jar; and
recognising the increased daytime
custom means we have a real
need to maximise on peak evening
trade through “bottle to table”
service, new exciting cocktails,
and entertainment performers.
Happy team happy guests!
• Following the release of social
distancing restrictions, bringing back
our Support Centre Social Committee
(“SCSC”) – a team of people across
the core departments who drive fun
events where our 100-strong Support
Centre can come together to drive
relationships, let off some steam, and
creating synergies between teams
who might not usually work together;
• a focus on health and wealth with
the introduction of our colleague food
menu. Addressing the requirement
for healthier and cheaper food options
for colleagues on shift, available
at all times;
• Wellbeing is embedded in our culture,
and lockdowns have given us the
opportunity to accelerate our agenda
by collaborating to provide education,
events, training and activities on all
aspects of mental, physical and
financial health;
• we created our new Diversity
& Inclusion Board, committed to
working together with respect for
each other at all times and in a truly
collaborative way; and
• we also started our Inclusion Survey,
sent to the entire workforce, to give
a louder employee voice on the issue.
Revolution Bars Group plc Annual Report and Accounts 2021
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Following the relaxation of social distancing
restrictions on 19 July 2021, we have continued
to monitor customer trends and ensure we’re
offering the exciting experiences our guests
want to enjoy. Below are some of our core
customer proposition strategies and successes
we are really proud of this year.
Investment
Investment
This year, we celebrated Revolution’s 25th
and Revolución de Cuba’s 10th birthdays
in style! Unfortunately, both these massive
celebrations fell during a lockdown but we
wanted our guests to celebrate with us, by
knowing we were there for them and ready
to party digitally via Live Stream DJ Events
and celebration masterclasses, whilst also
ensuring we were ready to reopen our doors,
welcome our guests and resume the party
when permitted.
two new business ventures:
Founders & Co.
• An eclectic food hall based on
Wind Street, Swansea. Offering
an all-day venue with a food hall,
bar and coffee shop;
• coaching our Partners, we offer
a supportive environment where
new and established businesses
have a home to grow;
•
retail space “the Emporium”
offering up locally sourced goods,
be it handmade soaps, records,
plants, local artwork, anything!
Supporting and celebrating our
local traders, and offering them
a place to showcase their talents;
• a safe, fun environment for workspace
and events (for humans and doggos
alike!), we offer a monthly workspace
subscription to give our guests value
for money, and host a variety of
events including Life Drawing, Baby
Lover group, Creative Writing, Yoga,
Propagation & Prosecco, and Essential
Oils Workshops;
•
the food hall is filled with artisanal
delights, our bar is stocked with local
drinks to die for – all created and
curated by the finest homegrown
South Wales talent.
Our Exciting fourth concept
• Your place to thrill, chill, and fill
on Bridge St., Northampton;
• bringing you a mix of next-level
gaming experiences, with pizza
and an innovative drinks range;
•
the Gaming area has all the classics
including Air-hockey, Basketball,
and Time Crisis, but we’ve levelled-up
with some high tech showstoppers
that you just won’t see anywhere else.
Our giant 10 person raceway steals
the show…think remote controlled
Mario Kart, where you’re in the racing
seat with real pedals and a racing
steering wheel;
• a unique bar offering a premium range
draft cocktails and beers, alongside
an exciting vending machine range
to ensure its always quick and easy
to quench your thirst;
• New York-inspired giant pizza slices
are prepared with our 24hr dough
freshly made in house, and topped
with the finest ingredients for a truly
authentic taste. Available by the slice,
or share a metre with friends.
% of colleagues who feel RBG is
the place to be
88%
25
Number of years Revolution has
been bringing the party
18 Revolution Bars Group plc Annual Report and Accounts 2021
RISK
Risk management
In order to fully understand and manage the Group’s exposure
to risk, each key area of our operations is reviewed annually using
a methodology that allows us to measure, evaluate, document and
monitor our key risks.
Our risk management process identifies, monitors, evaluates and
escalates risks as they emerge, enabling management to take
appropriate action wherever possible in order to control them
whilst enabling the Board to keep risk management under review.
Principal risks
The risk factors set out below are those which the Board believes are
the most significant to the Group’s business model that could adversely
affect its operations, revenue, profit, cash flow or asset values and
which may prevent the Group from achieving its strategic objectives.
There may be additional risks and uncertainties that are currently
unknown or currently believed to be immaterial that may also have
an adverse effect on the Group.
Risk management
framework
Board
Responsible for risk management
Audit Committee
Risk Committee
Non-Executive Directors
Underlying cause of risk
Response and mitigation
Change to
residual risk
in FY21
Commentary
COVID-19
The Group’s operating environment was
severely impacted by COVID, significantly
restricting the ability to trade at normal
levels due to social distancing and restricted
opening hours during periods. There is the
risk of ongoing extensive local or national
lockdowns and potential fines if operating
restrictions are not fully complied with.
Supply Chain
Brexit may have short-term impacts
on consumer prosperity and
disposable income.
The reopening of the global economy
post-COVID has caused supply chain
and HGV issues that have impacted
the availability of certain products,
with the situation constantly evolving.
The UK is seeing cost prices rise across
several product lines, including utilities.
• Operational procedures implemented to ensure
safeguarding of our teams and guests
•
Investment to ensure COVID-safe venues through
use of signage, PPE, technology and enhanced
cleaning procedures
• Regular Board reviews and action planning
to deal with local and national lockdowns
• Significant step up in cash liquidity, via fundraises
and available debt, made available to support
further lockdowns
The Group continues to
carefully monitor the ongoing
situation and will react quickly
to further local and national
restrictions for hospitality
businesses.
• The Group’s suppliers have assured us they
are monitoring the position closely and have
contingency plans in place to maintain supply
• Product offerings can be easily adapted and
switched to alternative suppliers and ingredients
•
Increase in our retail selling prices may
be required to counter the growing costs
• Utility rates are largely fixed until April 2023
The Group operates wholly
within the UK and therefore
exposure is limited. The Board
will continue to monitor the
situation and react accordingly
to mitigate risk, including
contract reviews with suppliers
to ensure securing the
best prices.
Refurbishment and acquisition of bars
The Group’s long-term strategy is based
on growth through the acquisition of new
bars. Longer-term market expectations rely
on the Group sourcing and developing
a pipeline of good sites.
Continued like-for-like sales growth
is dependent on refurbishment and quality
of existing bars, and high-quality offerings
at our highest performing bars.
• The development team and property agents have
sufficient resources to ensure the investigation
of new site opportunities, as required
• 5/6-year investment cycle for all bars
• Bars refurbished have proven track record
of improvement in sales
• Operational management focus on economically
significant bars
Following a successful
fundraising in June 2021
the Group has refocussed
on identifying potential new
sites and acquisitions, whilst
refurbishing existing bars. This
allows the Group to refurbish
all the bars that were halted
during COVID-19.
Revolution Bars Group plc Annual Report and Accounts 2021
19
Underlying cause of risk
Response and mitigation
Change to
residual risk
in FY21
Commentary
Consumer demand and PR
The out of home markets for eating
and drinking depend on the consumers’
disposable income. Macroeconomic factors,
such as employment levels, interest rates
and consumer confidence are important
influences on disposable income.
In an increasingly digital world, customers
are more likely to express dissatisfaction on
social media rather than alerting a member
of staff, which can have reputational impacts.
There is a growing trend for consumer-led
digital campaigns against sectors or brands
that they believe require change.
Health and safety
• Ability to tailor offerings in response to
macroeconomic influences, including quick
adjustments to promotional activity
• Ensure a safe and welcoming environment
in a COVID world
• Group’s proposition is not based solely on selling
price; a more affluent demographic is targeted
•
Increased focus on guest experience and
feedback, with recent partnership with “Feed It
Back” to monitor customer experience
• Our brands take a progressive approach to
consumer trends, allowing them to be on the
right side of most consumer-led campaigns
The Group’s bars are open to the public
and the Group has a duty of care to look
after its staff and its customers.
• The Group’s policies and procedures manual
covers all aspects of operations, as well
as detailed ongoing training for all staff
Allergens are a heightened risk for our
customer base, and thus the Group must
ensure strict guidelines are adhered to
in order to ensure the safety of guests.
• Adherence to these is strictly enforced both
through internal operational line management
and through external third-party audits
•
Incidents are thoroughly investigated, and
any lessons learned communicated throughout
the business
• The physical safety of our guests is paramount,
and our bar and operational teams are trained
in managing guest safety
COVID has increased
macroeconomic uncertainty
and consumer demand both
financially and from a health
risk perspective.
All bars are tasked with
reviewing feedback
and addressing it, whilst
Management also review
overall customer
experience scores.
New PR firm has been
appointed to help manage
any crisis that may occur.
Independent audits of Health
& Safety continue across all
bars to ensure a high quality
of safety.
Enhanced procedures to
ensure a safe environment
for teams and guests.
Group policies, procedures
and staff training are
constantly evolving.
Exec team sit on industry
bodies to ensure up to date
on any issues.
The difficult economic
backdrop has eased the
pressure on rent reviews
and improved rental terms
have been agreed on many
Revolution bars in the year.
Leasehold rents
All of the Group’s operating sites
are held under leases. Typically, rents
are determined on a five-year cycle
by reference to open market rents
prevailing at the time of the review.
Supplier concentration
The drinks distribution market is dominated
by one significant business, Matthew Clark,
which is the Group’s principal supplier.
Matthew Clark operates nationwide
whereas other drink wholesalers do not.
If Matthew Clark were to face business
difficulties or otherwise change its
arrangements or pricing, then the
Group’s operations could be disrupted.
National minimum/living wage
A significant proportion of bar-based teams
are affected, directly or indirectly, by wage
legislation and the national minimum living
wage. Recent years have seen rises above
inflation imposed on the business.
Post-COVID, we face challenges in
availability of the right people and we must
ensure we offer competitive packages
to attract and be the best place to work.
This extends to the costs of other people-
focused suppliers like security staff.
• The Group employs specialist rent review
advisers who deal only with tenant reviews
• CVA in year resulted in exit of six sites,
and improvements in terms on others
• Further two loss-making sites exited
• Many concessions and rent reviews finalised
due to COVID negotiations
• The proposed strategy is to tolerate the risk,
based on the Group’s assessment that Matthew
Clark is the best supplier, and a three-year deal
is in place to September 2024
• A tested contingency plan is in place to move
to an alternative supplier should Matthew Clark
be unable to supply
In April 2018, Matthew Clark’s
parent company entered
administration, and the Group
invoked its contingency plan
for several weeks with an
alternative supplier to no
significant adverse impact.
• Technology is utilised to deploy staff more
effectively and to streamline back office
processes that will help mitigate wage increases
• Contracts are reviewed regularly for external
suppliers to ensure securing the best rates
•
Increase in sales price of goods may be
required to counter the growing costs
Better adoption and
refinements of the labour
scheduling system have
allowed improvements in
efficiency of staff rostering.
The Group has recently
increased the rate paid for
security staff to ensure
meeting licence requirements
and providing guests with
a safe night out.
Governance ReportFinancial StatementsStrategic ReportCompany overview 20 Revolution Bars Group plc Annual Report and Accounts 2021
FINANCIAL
The Group is very pleased to have
seen a positive upturn in trading since
social distancing restrictions were
lifted post year-end on 19 July 2021,
but when considering the FY21 results
it is important to remember the impact
COVID-19 has had on the business.
Revenue
2021
2020
cash (used in)/generated
from operating activities
£39.4m
(£2.3m)
2021
£110.1m
2020
£6.5m
£39.4m
Adjusted1 EBITDA
(£3.9m)
2021
(£2.3m)
Adjusted1 LPBT
(£20.9m)
2021
2020
£9.8m
(£9.8m)
2020
(£3.9m)
(£20.9m)
Presentation of results
Consistent with previous reporting periods, the
Group operates a weekly accounting calendar
and as each accounting period refers only to
complete accounting weeks, the period under
review reflects the results of the 53 weeks
to 3 July 2021. Prior year comparatives relate
to the 52 weeks ended 27 June 2020. There
have been no changes to accounting policies
following the implementation of IFRS 16 in
FY20. The Directors believe that adjusted1
EBITDA provides a better representation of
underlying performance as it excludes the
effect of exceptional items and share-based
payment charge/credits (non-cash), none
of which directly relate to the underlying
performance of the Group. The adjusted1
EBITDA represents IFRS 16 and therefore
excludes any rental costs. APM3 adjusted1
EBITDA represents IAS 17 and is therefore
after deducting the IAS 17 rental charge.
Results
The Group is very pleased to have seen
a positive upturn in trading since social
distancing restrictions were lifted post
year-end on 19 July 2021, but, when
considering the FY21 results (being the
12 months commencing July 2020),
it is important to remember the impact
COVID-19 has had on the business:
•
•
•
a summer of restricted trading in 2020
with caps on numbers and trading ability;
tiers introduced in the autumn with
varying rules, and a four-week lockdown
in November;
more restrictions and a curfew introduced
in winter;
Management efforts have
been focused on cost reduction,
cash liquidity and stakeholder
communication.”
Danielle Davies, Chief Financial Officer
Revolution Bars Group plc Annual Report and Accounts 2021
21
• a three-and-a-half-month lockdown
starting in January;
• outdoor trading only permitted
from 12 April;
•
•
indoor trading with social distancing
restrictions from 17 May; and
finally, the year ended with a delay of the
release of restrictions, until 19 July 2021.
Restrictions have included various changing
tiers and rules, requirements for social
distancing between tables, enhanced health
and safety restrictions, substantial meals
needing to be purchased alongside alcoholic
drinks, curfews, and restrictions on household
numbers to name but a few.
Due to this, the Group has seen a significant
reduction in revenue in the year to £39.4
million (2020: £110.1 million). Indeed, we have
already generated more revenue since the
FY21 year-end than during the whole of FY21,
which shows the level of disruption that the
lockdowns have created. FY20 was also
impacted by COVID-19 but only by the inability
to trade for the final 14 weeks of the period.
Our statutory loss before tax for the year
of (£26.3) million reflects this, whereas our
prior year loss before tax of (£31.7) million
includes the exceptional impairment that
we recognised at the start of lockdown.
The underlying result, as measured by our
preferred APM3 adjusted1 EBITDA (see note 28),
was £12.1 million lower, at a loss of (£12.0) million
(2020: profit of £0.1 million). This is our preferred
metric because it shows the underlying
cash available, in a normal trading period,
for investment, loan servicing and repayment,
and for distributing to shareholders in the
form of dividends.
Adjusted1 EBITDA was a loss of (£3.9) million
(2020: profit of £9.8 million). This is a direct
result of the reduced sales and continued
fixed costs during periods of enforced closure.
Management efforts have been focused on
cost reduction, cash liquidity and stakeholder
communication during these times.
Gross profit in the year amounted to £28.1m
(2020: £83.5 million) which amounted to a
gross margin of 71.2%, down from 75.9% in the
period year. The deterioration in margin was
in part due to a change in the mix of products
sold, with customers enjoying our daytime
food offering more than in previous years,
and a higher participation of cocktails being
enjoyed. These items are lower margin than
the higher margin bottles of spirits and
magnums which are more traditionally enjoyed
late night, which was not permitted during
FY21. In addition, the ongoing opening and
closing of bars throughout FY21 due to the
changes in restrictions lead to higher
obsolescence and write-offs, and lower
supplier income.
Headcount reduced from 2,968 at the start of
FY21 to c. 2,000 in April 2021, before increasing
to 2,495 at the end of FY21, as we recruited
once bars re-opened. The increased furlough
claims and reduced headcount meant that total
payroll costs for the year were £22.1 million
compared to £35.8 million in FY20. Across the
year the Board took voluntary pay cuts of up
to 50%; these salaries have returned to full
pay following the reopening of the estate.
The Group took advantage of all applicable
Government support throughout the period.
The Group had previously utilised HMRC’s
Time to Pay scheme and began repaying this
debt in the year. VAT liabilities of £2.1 million
had also been deferred from the first
lockdown, and the Group took advantage of
the further deferral under monthly repayments
till January 2022 with £1.4 million still
outstanding at year-end. The Group continued
to utilise the Coronavirus Job Retention
Scheme (“CJRS”) during periods of enforced
closure, and to support bars as they reopened;
the Group has claimed total CJRS grants to
date of £22.0 million. In the year the Group
has also obtained various Local Authority
grants aimed at the Hospitality industry
of £3.4 million which has been recognised
as Other Income within operating profit.
The 100% rates holiday for the Hospitality
industry was applicable throughout the period
until the end of June 2021 and resulted in
a £6.5 million saving; this will then become
a two-thirds reduction from July 2021, subject
to a £2.0 million cap until April 2022.
Management continued to negotiate beneficial
payment and contract terms through periods
of closure with key suppliers and landlords
and the Group thanks them for their support.
As discussed in the Group Annual Report and
Accounts 2020, the Group completed the
Company Voluntary Arrangement (“CVA”) of
Revolution Bars Limited which was approved
on 13 November 2020. This resulted in a total
exit of six sites, with a further two loss-making
sites separately surrendered in the year. Total
cash rental savings agreed across the estate
since the start of COVID-19 are £6.0 million.
The Group incurred an operating loss of
£21.2 million (2020: £32.7 million). This was
after charging non-cash exceptional items
of £3.2 million (2020: £27.4 million) and cash
exceptionals of £2.2 million (2020: £0.4
million), which are detailed further below.
Summary
• The Group continues to offer comparative
•
Alternative Performance Measures3
(“APM”) of the numbers converted to IAS 17
following the implementation of IFRS 16
in FY20. APM3 for the current period are
given equal prominence in this review
because, in the opinion of the Directors,
these provide a better guide to the
underlying performance of the business;
the results information therefore gives
FY21 IFRS 16 statutory numbers, followed
by APM3 of FY21 under IAS 17, and the
equivalent comparison from FY20.
A reconciliation between statutory and
APM3 figures is provided in note 28;
FY21
(IFRS 16)
FY20
(IFRS 16)
FY21 APM3
(IAS17)
FY20 APM3
(IAS17)
Total Sales
£39.4 million
£110.1 million
£39.4 million
£110.1 million
Operating loss
£(21.2) million £(32.7) million £(21.6) million
£(27.5) million
Adjusted1 EBITDA
£(3.9) million
£9.8 million £(12.0) million
£0.1 million
Non-cash exceptionals
£(3.2) million
£(27.4) million
£(0.5) million
£(19.7) million
Cash exceptionals
£(2.2) million
£(0.4) million
£(2.7) million
£(0.4) million
Net bank debt
£(3.6) million £(22.0) million
£(3.6) million £(22.0) million
• when considering the results for the
period, it should also be noted that
trade has been restricted including two
lockdown periods where the Government
enforced the closure of pubs, bars and
restaurants in November and January
until mid-March, as well as varying rules
in the tier systems significantly impacting
Christmas trade, and ongoing social
distancing restrictions for the remainder
of the year. Comparatively, in FY20 the
business was unable to trade for the
last 14 weeks of the period;
Governance ReportFinancial StatementsStrategic ReportCompany overview 22 Revolution Bars Group plc Annual Report and Accounts 2021
FINANCIAL
Underlying profitability
The Board’s preferred profit measures are
APM3 adjusted1 EBITDA and APM3 adjusted1
pre-tax (loss)/profit as shown in the tables
below. The APM3 adjusted1 measures exclude
exceptional items, bar opening costs and
charges/credits arising from long-term
incentive plans.
Exceptional items, bar opening
costs and accounting for long-term
incentive plans
Exceptional items, by virtue of their size,
incidence or nature, are disclosed separately
in order to allow a better understanding of the
underlying trading performance of the Group.
The statutory exceptional position of £5.4
million is £2.2 million higher than the APM3
exceptionals of £3.2 million due to additional
impairment on right-of-use assets, and
accounting treatment changes (IAS 17
to IFRS 16) on fixed asset impairments and
on the surrender of leases and onerous
lease provisions, all of which result from
the implementation of IFRS 16.
The statutory charge of £5.4 million comprises
£3.2 million (2020: £27.4 million) of non-cash
exceptionals relating to property, plant and
equipment and right-of-use impairment charges
of £11.6 million offset by a gain on disposal
recognised under IFRS 16 upon surrender of
leases of £8.4 million. It also includes cash
exceptionals of £2.2 million (2020: £0.4 million)
relating to property restructure costs including
legal and professional expenditure incurred in
the CVA and various landlord deals, and the
cost of exiting sites. In the prior reporting
period, non-cash exceptionals also related
to impairment and a gain on disposal, and the
cash exceptional related to moving the listing
of the Company’s shares from the London
Stock Exchange premium segment to AIM.
A full analysis of exceptional items is given
in note 3 to the financial statements.
31 December 2021
30 June 2022
31 December 2022
30 June 2023
Pre-tax loss
Add back Exceptional items
Add back Charge arising from long-term
incentive plans
Deduct Exceptional finance income
Adjusted1 pre-tax loss
Add back Depreciation
Add back Amortisation
Add back Finance costs
Adjusted1 EBITDA
3 July
2021
IFRS 16
£m
(26.3)
5.4
0.1
–
(20.8)
11.8
0.0
5.1
(3.9)
27 June
2020
IFRS 16
£m
(31.7)
27.8
0.0
(5.9)
(9.8)
14.6
0.0
4.9
9.8
3 July
2021
APM3
IAS 17
£m
(22.8)
3.2
0.1
–
(19.5)
6.3
0.0
1.2
(12.0)
27 June
2020
APM3
IAS 17
£m
(28.1)
20.1
0.0
–
(8.0)
7.5
0.0
0.6
0.1
Charge relating to long-term incentive
schemes resulted from equity-settled share-
based payment transactions; this was a charge
of £64k (2020: £42k). No awards vested
in either the current period or prior period.
On 27 July 2020, the Group completed an
equity fundraising of £15.0 million, receiving net
proceeds of £14.1 million. These net proceeds
were used to repay all remaining outstanding
loan draw downs on the Facility.
Finance costs
Finance costs of £5.1 million (2020: £4.9 million)
are made up £1.1 million of bank interest paid on
borrowings (2020: £0.6 million) and £4.0 million
of lease interest (2020: £4.3 million). Charges
related to the Company’s committed revolving
credit facility with NatWest (the “Facility”)
including commitment fees relating to any
undrawn element of the Facility, and the
amortisation of arrangement fees over the life
of the Facility were much higher than the prior
period due primarily to higher average bank
debt levels during the year as a result of
increased borrowings due to COVID-19,
as well as the interest charged on the
Coronavirus Large Business Interruption
Loan Scheme (“CLBILS”) loans.
Liquidity
At the start of the period, the Group received
a £16.5 million CLBILS term loan from NatWest
in the form of a three-year term loan which was
used to pay down the Revolving Credit Facility
(“RCF”) and the RCF commitment was reduced
to £21.0 million from £30.0 million and its term
extended to June 2022. This provided the Group
with committed facilities of £37.5 million of which
£7.5 million was due to be prepaid at the end of
March 2021 with the RCF reducing a further £1.0
million at the end of June each year. The CLBILS
was due to amortise by £1.0 million per annum.
On 16 December 2020, due to the continued
COVID restrictions, NatWest agreed to defer
both the £7.5 million prepayment on the
committed facilities due at the end of March
2021 and the £1.0 million reduction on the
Facility due at the end of June 2021.
Additionally, in April 2021, NatWest agreed
to waive £2.0 million of amortisation scheduled
for September 2021 and approved a further
£3.5 million CLBILS term loan.
On 15 June 2021, the Group completed a further
equity fundraising of £21.0 million, receiving
net proceeds of £19.9 million. These net proceeds
were also used to repay all remaining outstanding
loan draw downs on the Facility, with remaining
funds held for an enhanced refurbishment
scheme and expansion opportunities. Therefore,
at year-end the Group had remaining gross bank
debt of £15.8 million which consisted entirely of
remaining CLBILS loans. The RCF also reduced to
£17.3 million following £3.7 million of amortisation
in June 2021.
On 11 November 2021, the RCF was extended
to 30 June 2023, and interest was increased by
1.2% with a further up-to 1% chargeable if the
RCF is drawn to within £5.0 million of total limits.
A new deleveraging method was also agreed
based on overperformance compared to the
severe but plausible downside case; please see
note 1 for further details on the key assumptions
in the severe but plausible downside case.
The Company now has committed Facilities
as follows:
RCF
£m
17.3
16.3
16.31
15.31
CLBILS
£m
15.3
14.8
14.31
13.81
Total
£m
32.6
31.1
30.61
29.11
1
Facilities are due to deleverage after 30 June 2022 under the overperformance deleverage agreement detailed above, meaning the facilities will reduce further at this point based
on overperformance of FY22 against the severe but plausible downside case.
Revolution Bars Group plc Annual Report and Accounts 2021
23
The Facility is due for expiry on 30 June 2023. The original £16.5 million CLBILS loan is a three-year term loan expiring 5 July 2023,
and the new £3.5 million CLBILS loan is a three-year term loan expiring 9 May 2024. We would like to thank NatWest and our shareholders
for this support during the year. At the time of writing, after 17 weeks of near-normal trade, the Group has net cash of £4.6 million.
Taxation
There is no tax payable in respect of the current
period due to losses made. Accordingly, the
charge in the current year is £nil (2020: charge
£3.5 million). The prior year charge principally
arises from the derecognition of the
deferred tax asset that was created on the
implementation of IFRS 16, given the difficult
trading outlook resulting from COVID.
Earnings/(loss) per share
Basic loss per share for the period was
21.2 pence (2020: loss 70.3 pence). Adjusting
for exceptional items, non-recurring opening
costs and credits arising from long-term
incentive plans resulted in an adjusted1
loss per share for the period of 18.9 pence
(2020: loss of 37.3 pence).
Operating cash flow and net bank debt
The Group utilised net cash flow from
operating activities in the period of (£2.3)
million (2020: generated £6.5 million) as
a direct result of the continued expenditure
and cash strain on the business during periods
of closure in the year. The Group focused on
minimising its cash outflow and liquidity during
periods of closure or reduced trading to
ensure that the business would be in a strong
position to resume trading when conditions
permitted. This was somewhat mitigated
through payment deferral arrangements with
the Group’s largest suppliers, rent concessions
agreed with a number of landlords as well as
the CVA, utilisation of the Coronavirus Job
Retention Scheme and HMRC Time to Pay
schemes, reduction of capital expenditure
and reduction of costs wherever possible.
Furthermore, in FY21 the Group received
£20.0 million CLBILS loans and £36.0 million
gross (£34.0 million net) of equity fundraising
to support the business and to allow it to come
out of COVID-19 in a strong position.
Capital expenditure payments of £2.0 million,
lease surrender payments of £1.7 million, bank
loan interest £1.1 million and loan repayments
of £52.7 million offset with proceeds from
fundraising of £34.0 million and drawdown of
borrowings of £44.0 million all contributed to
a net cash inflow in the period of £9.6 million
decreasing net bank debt to a closing position
of £3.6 million. This is in comparison to 2020,
where capital expenditure payments of £4.2
million, lease surrender payments of £1.4
million, bank loan interest £0.6 million, loan
repayments of £12.0 million and drawdown of
borrowings of £19.0 million all contributed to a
net cash outflow of £0.1 million which resulted
in net bank debt of £22.0 million.
Capital expenditure
The Group made capital investments of £2.0
million (2020: £4.2 million) during the period;
this was incurred entirely on the existing bars,
comprising building renovation works,
equipment replacement and IT investment
and minor refurbishment work where urgent.
During COVID-19, planned refurbishments
were halted to focus on cash management,
and will restart with an enhanced
refurbishment programme in FY22.
Dividend
As notified previously, the Board has
suspended payments of dividends.
Furthermore, (a) a condition of taking on the
CLBILS facility is that the Company is unable
to pay a dividend whilst the CLBILS remains
outstanding and (b) as a result of the CVA
referred to above, the Company’s subsidiary
entity, Revolution Bars Limited, is unable to
pay a dividend for a period of three years until
13 November 2023. A restriction on the
Group’s principal trading subsidiary being
unable to make a dividend payment to its
Parent Company may significantly impact the
Company’s ability to make a dividend payment
until after 13 November 2023. There was no
dividend paid or declared in either the current
or prior period.
Going Concern
Under the terms of its banking facilities with
NatWest, the Company has one financial
covenant – “minimum liquidity headroom”
between its net bank debt and its committed
bank debt facilities. The Directors have
modelled both a management base case
forecast scenario and a severe but plausible
downside case scenario; please see note 1
for further details on the key assumptions
in the severe but plausible downside case.
No forecast breach of the banking covenant
arises under either forecast scenario but there
is very limited headroom under the severe but
plausible downside forecast scenario under
which headroom is minimised to £0.9 million
at the end in April 2022.
The low level of liquidity headroom relative to
the minimum liquidity covenant in the severe
but plausible downside case, and the material
uncertainty caused by COVID coupled with
forecasting difficulties as a result of constantly
changing operating restrictions means that the
Group cannot be assured that it will not breach
the minimum liquidity covenant. A breach of
covenant would require the bank to grant a
waiver or for the Group to renegotiate its
banking facilities or raise funds from other
sources, none of which is entirely within the
Group’s control. A breach of the covenant
would also result in the reclassification of £15.8
million of non-current borrowings to current
borrowings as at the date of the consolidation
statement of financial position. The Directors
have assessed, however, that given a strong
underlying business, particularly post lease
surrenders of under-performing bars and the
CVA undertaken during 2020, the Group’s
existing relationships with its main creditors,
its success in recent years in obtaining
covenant waivers and renegotiating its
banking facilities and recent equity
fundraisings, that a request for a waiver
of a covenant breach or renegotiation of
the banking facilities would be successful.
Despite a return to normal trading in England
since July 2021, the severe disruption to the
Group’s trade prior to that since March 2020
caused by COVID, and the resultant and
frequently changing operating restrictions
imposed by the UK Government and the
devolved authorities means that there is a
material uncertainty over the going concern
of the Group. This uncertainty exists because
of the unpredictability of the nature, extent
and duration of COVID, and the possibility
of further restrictions or lockdowns imposed
by the Government, and how this will impact
the Group’s operational performance and
in particular the level of sales and EBITDA
generated that will in turn determine the
Group’s covenant compliance.
Notwithstanding the material uncertainty,
after due consideration the Directors have a
reasonable expectation that the Group and the
Company have sufficient resources to continue
in operational existence for the period of 12
months from the date of approval of these
financial statements. Accordingly, the financial
statements continue to be prepared on the
going concern basis. However, the impact
of possible COVID restrictions on our trading
indicates the existence of a material
uncertainty which may cast significant doubt
over the ability of the Group and Company
to continue as a going concern. The financial
statements do not contain the adjustments that
would arise if the Group (and the Company)
were unable to continue as a going concern.
A more comprehensive disclosure on going
concern including the banking facilities,
liquidity and the detailed assumptions behind
both forecast scenarios is given in note 1 to the
financial statements.
Danielle Davies
Chief Financial Officer
15 November 2021
1 Adjusted performance measures exclude
exceptional items, share-based payment charges
and bar opening costs.
2
Like-for-like (LFL) sales are same site sales defined
as sales at only those venues that traded in the same
week in both the current year and comparative
reporting periods.
3
APM refers to Alternative Performance Measure
being measures reported on an IAS 17 basis.
Governance ReportFinancial StatementsStrategic ReportCompany overview
24 Revolution Bars Group plc Annual Report and Accounts 2021
SECTION 172(1)
Stakeholder engagement is critical
to the success of the business.
Under Section 172 of the Companies Act 2006 (“S172”), a Director
is required to act in the way they consider, in good faith, would be
most likely to promote the success of the Company for the benefit
of its members as a whole.
Stakeholder Engagement
This report discusses how the
interests of other stakeholders
impact the long-term success
of the Company, and explains how
the Company’s Directors have:
• engaged with employees, suppliers,
customers and others; and
• had regard to employee interests, the
need to foster the Company’s business
relationships with suppliers, customers
and others, in relation to the principal
decisions taken by the Company during
the financial year.
The S172 statement focuses on matters
of strategic importance to the Group.
The Board’s two Executive Directors
are closely involved in all aspects of the
Group’s business on a day-to-day basis in
conjunction with the senior management
team (together, the Executive Committee)
whose activity is reported back to and
influenced by the full Board.
The Group provides regular engagement
and consultation with investors, with
regular trading updates. Executive
Directors are regularly available for direct
meetings with institutional and individual
investors, particularly following publication
of the Group’s interim and annual results.
COVID-19 had a significant impact on all of
our stakeholders throughout the 53 week
period ending 3 July 2021. We set out here
the key priorities and the ways in which we
engaged with them during FY21. This list
is not intended to be an exhaustive list of
all stakeholder priorities and engagement
activity, but to provide a summary that
illustrates the importance stakeholder
groups play in the Board’s decision making.
We engage with:
Why we engage:
Colleagues
Attracting and retaining the best people
is fundamental to driving business success,
particularly given the Group’s purpose,
vision and values.
Creating fun and memorable experiences
would not succeed without a diverse group
of engaged, well-trained and motivated
people that enjoy working in our bars.
Suppliers
Accessing new premium products is a key
element of keeping the Group’s offering
vibrant, refreshed and interesting, whilst
providing the brand owners with an
opportunity to showcase their products
in a fun environment.
Great relationships with suppliers allow us
to source the best value goods for the benefit
of our guests.
Customers
We want to create a safe environment in
which our guests love coming to us for the
fun and memorable experiences we are
known for, and in order to do so we must
recognise our guests’ needs.
The Board recognises the need for
innovation to provide our guests with
a new and exciting offering.
Revolution Bars Group plc Annual Report and Accounts 2021 25
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How we engage:
Material topics:
The shift to remote working allowed the opportunity for the Board, Executive team and wider
colleagues to work together more closely and successfully than ever through the adoption
and use of virtual conferencing.
Regular virtual updates were also provided by Rob Pitcher, Chief Executive Officer, and other
Executive members to the wider business in periods of closure and furlough to ensure our
People felt supported and updated.
The Board considers the twice-yearly Quality of Life survey undertaken across the whole
of the Group’s workforce to be the most effective way of measuring employee engagement,
motivation, affiliation and commitment to the business.
The Executive team and core management undertake regular bar visits to allow the teams
time for communication and feedback.
• Providing a safe, diverse and inclusive
working environment
• The Group is determined that it remains
a responsible employer
•
Introduction of the Diversity & Inclusion
Board, made up of members across our
workforce, committed to working together
with respect for each other and the Group
at all times and in a truly collaborative way
• New charity partner, Campaign Against
Living Miserably (“CALM"), voted for by
our colleagues
Brand owners and all key suppliers are invited to attend the Group’s annual conference,
which includes sessions for the drink brands to understand how they can work with the
Group and provides them an opportunity to showcase new products.
All major contracts are reviewed and approved by the Board when they are first entered into
and at renewal. The senior management team regularly engages with the development teams
at the leading drinks brands to look at menu innovation.
We would like to again take this opportunity to thank our suppliers and landlords for their
support through COVID-19.
• Negotiations with key suppliers
and landlords for mutually beneficial
agreements throughout COVID-19
• The Matthew Clark contract was
re-tendered, and a three-year contract
signed until September 2024
• Major suppliers are required to include
statements on modern slavery and
anti-bribery, and are asked to partner
with us on sustainable workflows
Social media and review platforms are internally and externally reviewed, with high response
rates to guests to understand their experiences with our bars.
Recognising the increased focus on health and wellbeing, the Board is also mindful that the
Group’s trade is associated with the retailing of alcohol. Accordingly, significant resources are
allocated to staff training and guest supervision to ensure that guests do not gain entry if they
are intoxicated and that they leave our bars in a safe and orderly fashion so as not to cause
disruption to others.
• Our guests are showing an increased
focus on the environment and sustainability
agenda, and we recently announced our
intention to become the UK’s first Bar
group to achieve Net Zero before 2030
•
Increased health & safety requirements,
ensuring a safe environment in which our
guests can return following COVID-19
26 Revolution Bars Group plc Annual Report and Accounts 2021
OPERATING RESPONSIBLY
Corporate and Social Responsibility Statement
The Group’s corporate social
responsibility activities prioritise
our people, responsible retailing
and charity.
There is no planet
‘B’ and at Revolution
Bars Group we are
100% committed
to doing our bit to
ensure we minimise
our impact on the
environment and
achieve Net Zero
before 2030.”
Rob Pitcher
Chief Executive Officer
People
We currently employ just over 3,000
people and are committed to creating
an inclusive environment where all
employees have the opportunity to
develop their careers. Throughout the
financial year 2021, we have continued
to face our most difficult trading
challenge to date with the majority
of our teams furloughed and our
operation paused for months on end.
However, we have utilised this time to
push forward on our hugely important
people agendas such as Diversity and
Inclusion (“D&I”) and our Wellbeing
projects. Thus, helping to ensure
that when our people returned to
the business, we came back with
engaged teams that were motivated
to take on the seemingly never-ending
challenges that the pandemic has
thrown at our industry.
When welcoming the return of our teams,
it was more important than ever before to
re-induct and provide refresher training for
all colleagues due to the fact that many of
them had not been operational for over six
months. Prior to reopening, we launched
“the festival of training” utilising our online
training platform to refresh our teams on
COVID safe operational processes and also
took the opportunity to provide Food Safety
Level 3 for all of our Kitchen Management
and General Management population to
extend and deepen their knowledge in
this fundamental area.
We knew the importance of ensuring our
teams felt safe to return to an environment
that was aligned to our Purpose, Vision
& Values and on Friday 14 May 2021, the
weekend prior to our full return to trade,
we hosted our first ever, company-wide,
virtual conference, live streaming our show to
all bars and delivering some key motivational
messages. The event included both live
and pre-recorded interviews, an interactive,
fun company quiz with prizes and the
introduction of some pivotal, new partnerships
to the wider business. One new collaboration
with “So Let’s Talk”, a not-for-profit platform
with a mission to “86 the silence”, has enabled
the provision of education, events, training
and activities on all aspects of mental,
physical and financial health relevant
to the hospitality industry.
We also launched our Inclusion Revolution
which presented our commitment to Diversity
and Inclusion and introduced our partnership
with “Wiser”, a people agency committed
to “changing the way we think about work”.
This collaboration enabled a full diversity
data capture of our people, tapping into some
sensitive areas which were analysed globally
to allow us to truly understand the diverse
Revolution Bars Group plc Annual Report and Accounts 2021
27
needs of our organisation. We also collated
data from an Inclusion Survey, which captured
more qualitative data and represented the way
in which our colleagues feel about the culture
of RBG. Alongside this rich insight, we worked
with Wiser to analyse all cultural and structural
pillars that make up our Inclusion Value
Proposition (“IVP”) – our promise to our
people regarding Inclusion. The IVP allows
us to evaluate and articulate where we are
on our Inclusion journey so that we can make
informed decisions around D&I actions,
commitment and strategy and so that we
can truly bring to life our vision, “To be the
place where everyone wants to be”.
Of our workforce, 46% is female and 54% is
male, with increased female representation
at Board level to 40% (from 20%) and within
the Executive team to 50% (from 18% three
years ago) and therefore we are leading by
example at senior leadership level. However,
there is still much work to be done within our
sites and Area Management population. One
of our eight geographical areas currently have
a 50/50 male/female split at General Manager
level, of those who identify themselves as
male/female. This again shows progression
in the right direction, but much improvement
can be made across all forms of diversity
and parity as we embark on our Inclusion
Revolution, a journey that will continue
to evolve.
Within hospitality the recruitment challenge
has been one of the most difficult obstacles
to overcome since our return to trade with
both the pandemic and Brexit having a huge
impact on our employee turnover and ability
to attract candidates. We have increased our
recruitment resource and forged forward with
our people retention strategies to mitigate the
risk, and this will remain a huge area of focus
for the business in the coming months.
We aim to create defined career paths for
every role so that we maintain a strong
pipeline of managers to lead and grow the
business. We have focused on a review of
our bartender career path, which we launched
during lockdown to keep our team motivated
and engaged. We will be launching both the
sales and kitchen career pathways by the end
of 2021. Our detailed succession plan and
talent management programmes have
historically seen us fill over 80% of our
management positions internally.
We have invested in the internal accreditation
of the Mental Health First Aid course which will
enable us to quickly roll out this vital training
to all managers that feel comfortable around
this crucial education and will commence
training for our General Manager population,
as well as further members of our support
centre in the next calendar year.
We have a suite of reward and incentive
schemes in place but, due to the suspension
of trade, we deferred certain bonus payments
and were forced to suspend all bonus
schemes in FY20 and part of FY21, with
employees supportive of the measures in
the circumstances. However, following
approval by the Remuneration Committee,
75% of the deferred bonus payment was
made in July 2021. A full review of all bonus
schemes was undertaken following our return
to trade with some changes made including
the alignment of our Kitchen and Assistant
kitchen managers into the same operational
team bonus, which has increased their earning
potential and aligned their focus with the
rest of the management teams. This was
an important step given the ongoing kitchen
recruitment challenge.
The Group’s performance as an employer
is usually measured twice yearly through an
independently administered “Quality of Life”
survey sent to every employee. However,
as we spent a large amount of time with the
operation paused in FY21 in November 2020,
we sent out a sentiment survey as a more
relevant way of measuring our employee
engagement at this time. In analysis 79% of
respondents agreed or strongly agreed they
had confidence in the Company’s leadership
during the crisis. Similarly, 82% were happy
with the level of communication and 72% felt
that they have had access to the right level
of support from the Company throughout the
pandemic. In addition to these results our
Inclusion Survey has helped to paint a very
positive picture as we scored incredibly highly
confirming our people know our purpose,
vision and values and overall felt that RBG
has an inclusive culture.
Responsible drinks retailing
The Group supports practices which promote
responsible drinking and has established its
own “Responsible Alcohol Retailing Policy”,
supported by staff training and monitoring.
The Group’s pricing models are set so as to
avoid deeply discounting products. Events are
promoted responsibly and are accompanied
by individual risk assessments. A number
of bars enter local “Best Bar None” schemes
(run by local authorities and the police to
encourage good behaviour in town centres),
promoting a safe and secure environment.
Test purchasing exercises are organised
through Serve Legal to ensure that staff
are exercising their judgement in the way
that they are trained to do with regard
to age verification.
Food information and quality
The Group continuously aims to improve
the quality of its food offering and provide
customers with the required information about
its products to allow them to make informed
decisions about their food consumption.
This includes providing allergen and calorie
information for all dishes via our website.
Products not containing gluten or meat are
highlighted on the printed menu. Full training
is provided to bar teams to enable them
to deal with customer queries and prevent
cross-contamination. The Group sets out
strict specifications for all products so that
high standards of quality are met.
The Group continues to place greater
emphasis on offering increased menu choices
for vegetarians, vegans and those with food
intolerances, given that this is important to an
increasing proportion of our customer base.
Charity
As part of its social responsibility agenda,
the Group has chosen a new corporate charity
partner, announced in August 2021. Following
an internal vote, over 75% of those that voted
chose the Campaign Against Living Miserably
(“CALM”). Following the challenging year
where at times up to 98.5% of our workforce
were on furlough, the Group has an increased
focus on employee wellbeing and ensuring a
safe and supporting environment for them to
return to work. Our people told us that suicide
support was an incredibly serious concern
given the challenging year many had faced,
and the Group is proud to support CALM in
their journey. The Group will be donating 50p
from every sharing platter sold, and additional
fundraising activity will be planned.
Prior to this, the Group supported its previously
nominated charity, Shelter. Over a three-year
period the Group raised over £85,000 for
Shelter through various employee activities
including sponsored events and by the Group
promoting the donation of 20 pence from
every hot beverage sold.
The Group also has a programme designed
to promote other charitable activity within
its workforce. The scheme, called “You raise
it, we match it”, rewards funds raised by staff
for other charities and matches what they
have raised.
Anti-bribery and corruption policy
The Group has in place an anti-bribery
and corruption policy that is communicated
through all heads of department to their
teams, and included in the colleague
handbook. The policy requires transparency
and the maintenance of an entertainment
register that is regularly reviewed by the
Board. Key suppliers have also been
made aware of the policy.
Modern slavery policy
and human rights
The Group has in place a Modern-slavery
policy that has been approved by the Board.
Suppliers are required to acknowledge the
Group’s policy and their obligation to adhere
to it as part of any contractual arrangements.
The Group does not have a formal human
rights policy, but it is committed to conducting
business with integrity and fairness.
Governance ReportFinancial StatementsStrategic ReportCompany overview 28 Revolution Bars Group plc Annual Report and Accounts 2021
OPERATING RESPONSIBLY
Environment
The Group endeavours to conduct its business in a way that is sympathetic to the environment. Where possible, glassware and bottles
are recycled, as is cardboard packaging. All new sites and major refurbishment projects include fitting energy-efficient lighting and other
control devices in order to minimise energy consumption. Smart meters have been fitted throughout our estate to allow the monitoring
of hourly energy consumption on a daily basis in order to highlight unusual consumption spikes and to be able to benchmark individual
site performance. The Group’s appointed energy consultant, Energise Limited, facilitates the production of a suite of reports enabling bars
to identify energy wastage; these reports are monitored both locally and centrally. The reporting is very useful for evaluating the impact
of new energy-saving initiatives, including investments in new technology and more efficient equipment.
Streamlined Energy and Carbon Reporting (SECR) Disclosure
Our SECR disclosure for the Group presents our carbon footprint across Scopes 1, 2 and 3, together with an appropriate intensity metric and
our total energy use. The reporting of greenhouse gas emissions is for the period 1 July 2020 to 30 June 2021. All of the Group’s operations
are based in the UK, and therefore all of the below figures purely relate to the UK.
Emission Type
Scope 1: Operation of Facilities
Scope 1: Combustion
TOTAL Scope 1
Scope 2: Purchased Energy
TOTAL Scope 2
Scope 3: Indirect Energy use
TOTAL Scope 3
Total
kWh (Scope 1 & 2 Only)
CO2e tonnes (Location Based)
Current Year
(2020–21)
Previous Year
(2019–20)
–
3,798,991
–
8,453,731
3,798,991
8,453,731
10,088,994
19,219,442
10,088,994
19,219,442
–
–
–
–
Var.%
–
-55.1%
-55.1%
-47.5%
-47.5%
–
–
13,887,985
27,673,173
-49.8%
Current Year
(2020–21)
Previous Year
(2019–20)
–
715
715
2,352
2,352
10,238
10,238
13,305
–
1,580
1,580
4,912
4,912
31,364
31,364
37,856
Var.%
–
-54.7%
-54.7%
-52.1%
-52.1%
-67.4%
-67.4%
-64.9%
Greenhouse Gas Emissions Intensity Ratio:
Total Footprint
(Scope 1, Scope 2 and
Scope 3) - CO2e tonnes
Current
Year
(2020–21)
Previous
Year
(2019–20)
Turnover (£m)
Intensity Ratio (tCO2e/£100,000)
39.4 m
33.77
110.1 m
34.38
Year on
Year
Variance
-64.2%
-1.8%
Intensity Ratio Trend Review
Intensity Ratio
Difference
Variance %
Current
Year
(2020–21)
Previous
Year
(2019–20)
33.77
-0.61
-1.8%
34.38
+27.36
+389.8%
2018–19
7.02
-1.53
-17.9%
CO2e tonnes
(Dual Reporting Methodology)
Emission Type
Scope 1: Operation of Facilities
Scope 1: Combustion
TOTAL Scope 1
Scope 2: Purchased Energy
TOTAL Scope 2
Market
Based
(Supplier
Specific)
–
715
715
182
182
Location
Based
–
715
715
2,352
2,352
Scope 3: Indirect Energy use
10,238
10,238
TOTAL Scope 3
10,238
10,238
Variance
–
0%
0%
-92.3%
-92.3%
0%
0%
Total
13,305
11,135
-16.3%
The Dual Reporting Methodology shows
data from the same financial period,
calculated using different conversion factors.
The location-based emissions are calculated
using the UK average electricity carbon factor
and the market-based emissions are calculated
based on the specific electricity carbon factors
of the Group’s electricity suppliers.
This table therefore demonstrates the
reduction in the Group’s overall footprint
achieved by purchasing renewable energy;
by purchasing renewable energy our carbon
emissions associated with electricity are
approximately 92.3% lower than they would
have been if they remained on a standard,
non-renewable electricity tariff.
Scope and methodology:
•
Our methodology has been based on the
principles of the Greenhouse Gas Protocol,
taking account of the 2015 amendment
which sets out a “dual reporting”
methodology for the reporting of Scope 2
emissions. In the “Total Footprint” summary
above, purchased electricity is reported
on a location-based method;
•
•
•
We have reported on all the measured
emissions sources required under
The Companies Act 2006 (Strategic Report
and Directors’ Report) Regulations 2013
and The Companies (Directors’ Report)
and Limited Liability Partnerships (Energy
and Carbon Report) Regulations 2018
except where stated;
This Streamlined Energy and Carbon
Report has been compiled by our
energy and net zero carbon partner,
Energise Limited;
This report includes emissions under
Scope 1 and 2, except where stated, and
includes emissions from Scope 3 sources
relating to business travel, purchased
Revolution Bars Group plc Annual Report and Accounts 2021
29
reduction across all scopes by that date;
•
•
•
•
•
goods and services, capital goods,
employee commuting, fuel- and energy-
related activities, water and waste;
Conversion factors for UK electricity
(location-based methodology), gas and
other emissions are those published
by the Department for Environment,
Food and Rural Affairs for 2020-21;
Conversion factors for UK electricity
(market-based methodology) are published
on the fuel mix disclosures on each
supplier’s website;
Emissions in relation to fugitive emissions
are excluded from the scope of reporting
due to the lack of quality data records
in this area;
Estimation has been required in some
areas where data has not been available.
These have been completed using
standard estimation methods (direct
comparison, pro-rata etc.). Where FY20
data has been used as a comparable
period for direct comparison, these have
been adjusted for COVID-19 impact using
either a site-specific calculation based on
opening patterns (where available) or a
standard portfolio calculated average of
36% of FY20 usage levels. This percentage
figure is based on a calculation combining
days from national lockdown closed
periods with local lockdown periods within
the FY (where this information was
available) against a total of standard
operating days.
Energy efficiency action
The period covered by this report has been
significantly impacted by the COVID-19
pandemic, with the majority of sites closed
for large sections of the year during both
the national lockdowns and the local
tiered lockdowns.
Progress has been made with the Net Zero
Strategy workstreams, including progressing
the adoption of the strategy itself within the
business, appointing zero heroes and
promoting engagement and the submission
of intent to a science-based target.
On-site improvements regarding energy
efficiency have been limited due to the
COVID-19 pandemic, however with our
Pathway to Net Zero defined, we are in
a position to move forwards with a clear
and defined plan as to when upcoming
energy efficiency actions will be completed.
Sustainability
This year brings sustainability into the
heart of our bars with the following major
changes/commitments:
• We are the UK’s first bar group to commit
to a Science-Based Target for reducing
our emissions;
• The Board has formally adopted our Net
Zero/Sustainability strategy which commits
us to being Net Zero before 2030,
achieving at least a 40% emissions
• We were a founding member of the
Zero Carbon Forum, which is developing
solutions for Net Zero for the Hospitality
sector collaboratively and have contributed
to the forthcoming sector roadmap;
• We have made a formal commitment to a
Science Based Target with a commitment
for our ambitions and actions to be aligned
to a maximum of 1.5C level of global
warming, considered internationally
the mark of best practice;
• We have submitted to the Carbon
Disclosure Project (“CDP”) for the first time,
following feedback from our stakeholders.
Our submission to the Climate Change
questionnaire will allow us to rate and
monitor our progress over the years
as we strive to Net Zero.
Our achievements in this area have been
recognised by winning a prestigious “Gold
Level” Green Apple Award for Environmental
Best Practice by The Green Organisation, the
international environmental group dedicated
to rewarding and promoting environmental
best practice globally. This award is in
recognition of the great achievements
accomplished so far in energy and waste
reduction through our Zero Hero programme
and our activities since we embarked on our
greater focus on Sustainability since 2017.
The Group has already reduced its energy
consumption by 19% on a like-for-like basis.
We have made the following commitments
moving forward as part of our strategy:
•
•
•
•
•
•
•
to reduce our carbon intensity by
at least 40% by 2030;
to achieve a further 20% energy
efficiency improvement by 2025;
to commit to working towards
and maintaining thereafter 100%
renewable electricity supply;
to achieve a 30% reduction in water
consumption by 2030;
to reduce supply chain emissions
by 30% by 2030;
to reduce waste to landfill by 50%
by 2030; and
to reduce overall waste volumes
by 15% by 2030.
We are making progress on delivering those
commitments through the following work:
• Our Zero Hero programme brings
sustainability to life in our bars, through
a member of management tasked with
driving more sustainable operations within
their bar. We offer monthly Group webinars
partnered with our core suppliers on
matters close to our hearts, for example,
energy reduction with our energy supplier,
and recycling training with Biffa. These
great ideas are shared on the Bars’
Hero Boards so the whole team can
get involved. It really can be as simple
as remembering to turn off a light!
In April 2020, we moved all our direct
electricity supplies to a zero-carbon
supplier whose power is from biomass
generation. These supplies are backed by
Renewable Energy Guarantees of Origin.
Electricity supplies that are part of landlord
services arrangements remain with their
existing suppliers;
• We want to work with suppliers who care
about this as much as us, which is why
we are embarking on a project to ask our
major contractors to partner with us on
sustainable workflows, such as reducing
the number of vehicle drops to us as part
of our commercial contracts or taking back
cardboard for recycling after a delivery;
• We have adopted a supply chain
questionnaire as standard for all
significant tenders;
• We are trialing new ideas in our quest
to become Net Zero within our sites;
• We have implemented the
following programmes:
-
-
recycling zones behind our bars
focused reduction on Out of Hours
energy consumption
- ongoing energy efficiency trials
including new cellar cooling equipment
- continuing to roll out LED lighting in the
front of house areas of our bars
As the Group embarks on an enhanced
refurbishment programme over the next
couple of years we are placing sustainability
and energy-savings at the heart of each
planned refurbishment.
On behalf of the Board.
Danielle Davies
Company Secretary
15 November 2021
Proportion of executive team who
are female
50%
19%
like-for-like reduction
of energy consumption since 2017
Governance ReportFinancial StatementsStrategic ReportCompany overview
30 Revolution Bars Group plc Annual Report and Accounts 2021
Revolution Bars Group plc Annual Report and Accounts 2021
Revolution Bars Group plc Annual Report and Accounts 2021
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governance report
32 Board of Directors
34 Senior Management
35 Governance Section: Chairman’s Introduction
to Governance
Nomination Committee Report
36 Governance Section: Corporate Governance Report
40 Board Activity
42
44 Audit Committee Report
48 Directors’ Remuneration Report
54 Directors’ Report
58 Statement of Directors’ Responsibilities
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32 Revolution Bars Group plc Annual Report and Accounts 2021
BOARD OF
The Directors of
the Company who
were in office during
the year and up
to the date of
signing the financial
statements were:
length of service
0–2 years
2–4 years
4+ years
gender analysis
UPDATE CHART
Male
Female
Executive/non-executive analysis
Rob Pitcher
Chief Executive Officer
Date appointed to Board
25 June 2018
Relevant past experience
Rob has over 25 years’ experience within the
hospitality sector, most recently as Divisional
Director of Restaurants at Mitchells & Butlers
responsible for the Harvester, Toby Carvery
and Stonehouse brands. Prior to joining
M&B, Rob held senior positions at many
other leading hospitality companies,
including Stonegate, Laurel Pub Company,
Spirit Group, and Scottish & Newcastle Retail.
Keith Edelman
Non-Executive Chairman
Date appointed to Board
16 February 2015
Relevant past experience
Keith has served on the Boards of public
companies for over 30 years across a wide
range of businesses and markets, with
extensive experience in the retail and
consumer sectors. Keith’s previous executive
roles include being Managing Director of
Arsenal Holdings plc from 2000 to 2008
and Chief Executive Officer of Storehouse plc
(encompassing BHS and Mothercare) from
1993 to 1999. Keith has a BSc in management
studies from the University of Manchester
(Institute of Science and Technology).
Other appointments
Keith is currently a Non-Executive Director of
Headlam Group Plc, a Non-Executive Director
of Altitude Group plc, and a Non-Executive
Director (and Chairman of the Audit Committee)
of the London Legacy Development
Corporation. He is also a Non-Executive
Director of both JE Beale PLC and Beale
Limited, having been appointed to these
companies in December 2019 and both being
put into administration in January 2020.
He is also a Director of Jewellery Quarter
Bullion Limited, and a Non-Executive Director
of E20 Stadium LLP. He was Non-Executive
Director of Pennetro Energy PLC during part
of the year and resigned on 15 April 2021.
Executive
Non-Executive
As announced on 13 November 2020, Mike Foster stepped down from his role on the Board
as Chief Financial Officer at the conclusion of the Annual General Meeting on 22 December
2020, at which point Danielle Davies was appointed as Chief Financial Officer.
Danielle Davies
Chief Financial Officer
Date appointed to Board
22 December 2020
Relevant past experience
Jemima Bird
William Tuffy
Senior Independent Non-Executive Director
Independent Non-Executive Director
Date appointed to Board
19 December 2016
Relevant past experience
Date appointed to Board
26 November 2018
Relevant past experience
Danielle is a Chartered Accountant with
Jemima is a marketer with more than
William Tuffy is a Chartered and Certified
extensive corporate finance and hands-on
20 years’ experience working with many
Accountant with over 35 years’ experience
financial and commercial management
of the UK’s leading high street brands,
in senior general and financial management
experience gained in senior positions at large
most recently leading the rebrand for the
roles in retail, FMCG and property
multi-site retail businesses. Most recently, she
Co-op Food business. She formed Hello
investment and management. He has also
was Chief Financial Officer at Footasylum plc.
Finch, a brand and marketing consultancy,
been involved with business transformation
Prior to that she was Director of Finance at Pets
in 2013. Between 2008 and 2015, Jemima
and turnaround projects in companies
at Home where she worked on a number of
held executive Board positions at Moss Bros
ranging from large multi-nationals to
refinancing activities and acquisitions under
plc, Tragus and Musgrave Retail Partners.
mid-sized businesses and start-ups. He has
private equity ownership, prior to supporting its
public offering in 2014. She has also performed
senior financial roles at Matalan, Royal and Sun
Alliance and the Co-operative Group.
held non-executive positions, including four
years at Beale plc, during which time he was
initially senior independent Director and
then Non-Executive Chairman. Whilst at
Beale plc, William also served as chair of
both audit and remuneration committees.
Other appointments
Other appointments
Jemima is a Director of Hello Finch Limited
William is also a Director of Miromore
and a Board Trustee for the Football
Limited and Structadene Limited.
Foundation, the UK’s largest sports charity.
Keith Edelman
Non-Executive Chairman
Date appointed to Board
16 February 2015
Relevant past experience
Rob Pitcher
Chief Executive Officer
Date appointed to Board
25 June 2018
Relevant past experience
Keith has served on the Boards of public
Rob has over 25 years’ experience within the
companies for over 30 years across a wide
hospitality sector, most recently as Divisional
range of businesses and markets, with
extensive experience in the retail and
Director of Restaurants at Mitchells & Butlers
responsible for the Harvester, Toby Carvery
consumer sectors. Keith’s previous executive
and Stonehouse brands. Prior to joining
roles include being Managing Director of
M&B, Rob held senior positions at many
Arsenal Holdings plc from 2000 to 2008
other leading hospitality companies,
and Chief Executive Officer of Storehouse plc
including Stonegate, Laurel Pub Company,
(encompassing BHS and Mothercare) from
Spirit Group, and Scottish & Newcastle Retail.
1993 to 1999. Keith has a BSc in management
studies from the University of Manchester
(Institute of Science and Technology).
Other appointments
Keith is currently a Non-Executive Director of
Headlam Group Plc, a Non-Executive Director
of Altitude Group plc, and a Non-Executive
Director (and Chairman of the Audit Committee)
of the London Legacy Development
Corporation. He is also a Non-Executive
Director of both JE Beale PLC and Beale
Limited, having been appointed to these
companies in December 2019 and both being
put into administration in January 2020.
He is also a Director of Jewellery Quarter
Bullion Limited, and a Non-Executive Director
of E20 Stadium LLP. He was Non-Executive
Director of Pennetro Energy PLC during part
of the year and resigned on 15 April 2021.
Key
Audit Committee
Remuneration Committee
Nomination Committee
Chair
Revolution Bars Group plc Annual Report and Accounts 2021
33
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Danielle Davies
Chief Financial Officer
Date appointed to Board
22 December 2020
Relevant past experience
Danielle is a Chartered Accountant with
extensive corporate finance and hands-on
financial and commercial management
experience gained in senior positions at large
multi-site retail businesses. Most recently, she
was Chief Financial Officer at Footasylum plc.
Prior to that she was Director of Finance at Pets
at Home where she worked on a number of
refinancing activities and acquisitions under
private equity ownership, prior to supporting its
public offering in 2014. She has also performed
senior financial roles at Matalan, Royal and Sun
Alliance and the Co-operative Group.
Jemima Bird
Senior Independent Non-Executive Director
Date appointed to Board
19 December 2016
Relevant past experience
Jemima is a marketer with more than
20 years’ experience working with many
of the UK’s leading high street brands,
most recently leading the rebrand for the
Co-op Food business. She formed Hello
Finch, a brand and marketing consultancy,
in 2013. Between 2008 and 2015, Jemima
held executive Board positions at Moss Bros
plc, Tragus and Musgrave Retail Partners.
Other appointments
Jemima is a Director of Hello Finch Limited
and a Board Trustee for the Football
Foundation, the UK’s largest sports charity.
William Tuffy
Independent Non-Executive Director
Date appointed to Board
26 November 2018
Relevant past experience
William Tuffy is a Chartered and Certified
Accountant with over 35 years’ experience
in senior general and financial management
roles in retail, FMCG and property
investment and management. He has also
been involved with business transformation
and turnaround projects in companies
ranging from large multi-nationals to
mid-sized businesses and start-ups. He has
held non-executive positions, including four
years at Beale plc, during which time he was
initially senior independent Director and
then Non-Executive Chairman. Whilst at
Beale plc, William also served as chair of
both audit and remuneration committees.
Other appointments
William is also a Director of Miromore
Limited and Structadene Limited.
Principal skills and experience
Leisure
Retail
Marketing
Operational
People
Finance
Keith Edelman
Non-Executive Chairman
Rob Pitcher
Chief Executive Officer
Danielle Davies
Chief Financial Officer
Jemima Bird
Senior Non-Executive Director
William Tuffy
Non-Executive Director
●
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Governance ReportFinancial StatementsStrategic Report
34 Revolution Bars Group plc Annual Report and Accounts 2021
SENIOR
In addition to the Executive Directors, the following senior
managers are considered to have the relevant expertise
and experience to support the strategic development
of the Group’s brands and the day-to-day direction and
decision-making of the business.
Beth Anderson
People Director
Andy Dyson
Business Development Director
Alex Young
Sales & Marketing Director
Beth joined the business in 2012 with a strong
operational background before moving into
the People Development Team in 2014.
Beth has held several roles within the
People Development team including Human
Resources Business Partner for the Southern
region and subsequently National Talent
Development Manager. She was promoted
to Head of People in the summer of 2019
and has recently been further promoted
to People Director.
Since graduating from university, Beth has
studied for CIPD qualifications, attaining
Level 5 CIPD in Learning and Development,
and completed her Level 7 CIPD qualification
in Human Resource Management earlier
this year.
Andy joined the business in 1998, having
graduated from Leeds University where
he studied Civil Engineering (BEng (Hons)).
He has performed several operational roles
within the Group, including Bar General
Manager, Area Manager and Operations
Director – Revolution North. Andy has recently
been promoted to Business Development
Director and his many responsibilities are
primarily associated with ensuring process
efficiency for those services that cross
both brands and ensuring that the many and
varied workstreams driving change and
innovation, including the development of new
brands, get the required focus.
Alex joined as maternity cover for the Head
of Marketing role in December 2018, taking
on the Interim Sales & Marketing Director
role in January 2020 covering the remit of the
sales, marketing and food teams. In December
2020 Alex joined the Group permanently,
managing the sales and marketing teams.
A CIM qualified marketer, Alex began her
career working in software and logistics,
expanding to include business development
when she moved into the festivals and
events industry.
Fiona Hall
commercial director
Clinton Ghent
Brand Operations Director
– Revolución De Cuba
Mark Walter
Brand Operations Director
– Revolution
Fiona worked with the business as a
Hospitality Consultant in both 2018 and 2019
focusing on pricing and margin optimisation.
In December 2020 Fiona joined the Group
permanently, managing the Commercial and
Food teams, and was recently promoted in
August 2021 to the position of Commercial
Director. With over 15 years’ experience in
the industry, Fiona’s focus has been on driving
margin across multiple companies, such as
the Stonegate Pub Company, The Alchemist,
The Deltic Group, Town and City Pubs, Bay
Restaurant Group and Laurel. Fiona began her
career working in various blue-chip companies
including Banks, Telecoms and Tech. She is
a qualified Chef with an enormous passion
for Food.
Clinton joined the business in 2008 as
a General Manager after beginning his
career with Fat Cat Café Bars. He has been
responsible for the development and delivery
of the Revolución de Cuba brand since
its inception in 2011 and has overseen the
opening of all of the Revolución de Cuba bars.
Mark joined the business, as Operations
Director – Revolution South, in September 2018
from Mitchells & Butlers where he had been
a Regional Operations Manager for three years,
responsible for 125 destination venues. Mark
has spent his career in hospitality running
late-night venues, pubs and bars and prior to
joining Mitchells & Butlers, Mark was an Area
Manager for Stonegate Pub Company, Town
and City and Laurel. He is now responsible
for the day-to-day operations of the entire
Revolution branded estate.
The business address of each senior manager is:
21 Old Street, Ashton-under-Lyne, Tameside OL6 6LA.
Revolution Bars Group plc Annual Report and Accounts 2021
35
GOVERNANCE SECTION
This is the
Company’s
seventh Governance
Report.
Compliance with the code
The Board considers that the Group
has complied with the requirements
of the Code throughout the reporting
period but notes that it has not
included a viability statement in
its Governance schedule given
the extensive disclosures on
going concern that are set out in
the Directors’ Report and in note 1 of
the financial statements and further
references in the Financial Review.
The Group continues to implement
a robust governance structure to
ensure compliance with the Code.
Key elements include:
•
the Board comprises a majority of
independent Non-Executive Directors,
of which there are three, including myself
as Non-Executive Chairman (deemed
independent on appointment), and two
Executive Directors;
•
each Non-Executive Director has a proven
track record in business at a high level
and has good retail and leisure sector skills
and experience that are highly relevant;
The Board recognises the importance of, and is committed to, high standards
of corporate governance, and all Directors are fully aware of their duties and
responsibilities under the UK Corporate Governance Code 2018 (the “Code”)
that became effective for the first time in the prior reporting period, the
Disclosure Guidance and Transparency Rules (“DTRs”) and the Listing Rules.
Whilst the Company’s ordinary shares are
now admitted to trading on AIM (following the
cancellation on 27 July 2020 of the admission
of the Company’s ordinary shares to listing on
the FCA’s Official List (premium segment) and
to trading on the London Stock Exchange’s
main market for listed securities), the 2021
Annual Report & Accounts have been
prepared as if the Company were still
a fully listed company (complying with the
requirements of the FCA’s ‘Listing Rules’,
Schedule 8 (Quoted Companies Directors
Remuneration Report) as amended by the
provisions of The Large and Medium-sized
Companies and Groups (Accounts and Report)
Regulations 2008 (SI 2008/410) and
The UK Corporate Governance Code).
On 4 November 2021 the Board approved the
Company’s intended transition to compliance
with the provisions of Corporate Governance
Code published by the Quoted Companies
Alliance (the “QCA Corporate Governance
Code”) by Spring 2022. It is therefore
anticipated that the annual report and accounts
of the Company for the financial year ending
2 July 2022 will be prepared in accordance
with the Company’s obligations as an AIM
company and the requirements of the QCA
Corporate Governance Code.
•
•
•
the Board and its sub-committees
are structured in accordance with the
requirements for a listed company
with both the Audit and Remuneration
Committees fully comprising Non-
Executive Directors. The Non-Executive
Directors provide critical challenge and
support to those areas of the Group that
they believe are of particular importance;
regular review of new developments
in corporate governance best practice
and consideration of how to apply them
appropriately. The Board is regularly
updated on corporate governance
developments by the Company Secretary
and when new or updated sections of the
Code are released, it is normal practice
to arrange, when relevant, for the Group’s
corporate lawyer to present formally at a
Board meeting and lead a discussion; and
an increased focus on increasing the level
of the Board’s engagement and direction
in corporate culture and workforce
engagement, risk management and
sustainability in acknowledgement of the
extended responsibilities introduced by the
UK Corporate Governance Code 2018.
There have been no changes to the
composition of the Board or any of its
sub-committees during the year.
Revolution Bars Group plc Board:
Each Director was selected on the basis
of having the appropriate level of public
company, commercial and market sector
skills required to drive the Group forward.
The Board takes appropriate advice on
governance matters from external advisers,
including its lawyers and a specialist
remuneration consultant, FIT Remuneration
Consultants.
The remuneration of Directors is set out in the
Remuneration Report, which starts on page 48
and includes a link to the Company’s website
where the remuneration policy for both
Executive Directors and Non-Executive
Directors is detailed.
The Group has the principles of transparency
and openness at the heart of its culture and
is committed to achieving high standards
of corporate governance. The Board firmly
believes that its corporate governance
structures and robust processes will help drive
a more efficient and competitive business
performance and enable strong relationships
with all stakeholders.
Keith Edelman
Chairman
15 November 2021
Chairman:
Keith Edelman
Chief
Executive Officer:
Rob Pitcher
Chief
Financial Officer:
Danielle Davies
Senior Independent
Non-Executive Director:
Independent
Non-Executive Director:
Jemima Bird
William Tuffy
Audit Committee:
Chair: William Tuffy
Jemima Bird
Keith Edelman
Remuneration Committee:
Nomination Committee:
Chair: Jemima Bird
Keith Edelman
William Tuffy
Chair: Keith Edelman
Jemima Bird
Rob Pitcher
William Tuffy
Governance ReportFinancial StatementsStrategic ReportCompany overview
36 Revolution Bars Group plc Annual Report and Accounts 2021
GOVERNANCE SECTION
overview
This report sets out the Group’s governance structure and how it complies with the UK Corporate Governance
Code 2018 (the “Code”), published by the Financial Reporting Council in July 2018, and also includes items required
by the Disclosure Guidance and Transparency Rules (“DTRs”). The Code is available on the Financial Reporting
Council website at www.frc.org.uk.
The Code has at its heart an updated set of principles that emphasise the value of good corporate governance
to long-term sustainable success. These principles are:
A
B
A successful Company is led by
an effective and entrepreneurial
Board, whose role is to promote
the long-term sustainable success
of the Company, generating value
for shareholders and contributing
to wider society.
The Board should establish the
Company’s purpose, values and
strategy, and satisfy itself that
these and its culture are aligned.
All Directors must act with integrity,
lead by example, and promote
the desired culture.
C
The Board should ensure that the
necessary resources are in place for
the Company to meet its objectives
and measure performance against
them. The Board should also
establish a framework of prudent
and effective controls, which enable
risk to be assessed and managed.
D
In order for the Company to meet
its responsibilities to shareholders
and stakeholders, the Board should
ensure effective engagement with,
and encourage participation from,
these parties.
The disclosures in this report relate to our
responsibilities for preparing the Annual
Report and Accounts, including compliance
with the Code to the extent required, our
report on the effectiveness of the Group’s risk
management and internal control systems and
the functioning of our Committees, and where
appropriate we have referenced how the
Board and Company has adapted its approach
and adopted new workstreams to specifically
address the principles of the Code.
The Directors consider that the Group
has complied with those provisions of the
Code applicable to a company of its size.
The Board is committed to the highest
standards of corporate governance.
Whilst the Company’s ordinary shares are
now admitted to trading on AIM (following the
cancellation on 27 July 2020 of the admission
of the Company’s ordinary shares to listing on
the FCA’s Official List (premium segment) and
to trading on the London Stock Exchange’s
main market for listed securities), the 2021
Annual Report & Accounts have been
prepared as if the Company were still
a fully listed company (complying with the
requirements of the FCA’s ‘Listing Rules’,
Schedule 8 (Quoted Companies Directors
Remuneration Report) as amended by the
provisions of The Large and Medium-sized
Companies and Groups (Accounts and Report)
Regulations 2008 (SI 2008/410) and The UK
Corporate Governance Code).
E
The Board should ensure that
workforce policies and practices
are consistent with the Company’s
values and support its long-term
sustainable success. The workforce
should be able to raise any matters
of concern.
On 4 November 2021 the Board approved the
Company’s intended transition to compliance
with the provisions of Corporate Governance
Code published by the Quoted Companies
Alliance (the “QCA Corporate Governance
Code”) by Spring 2022. It is therefore
anticipated that the annual report and
accounts of the Company for the financial
year ending 2 July 2022 will be prepared in
accordance with the Company’s obligations
as an AIM company and the requirements
of the QCA Corporate Governance Code.
Board Composition
Executive
Non-Executive
Compliance with the Code:
Board composition
The Board comprises a Non-Executive
Chairman, two Executive Directors and two
other Non-Executive Directors and therefore
has a majority of Non-Executive positions.
All Board members are widely experienced in
large retail businesses, including the Executive
Directors who are both very experienced and
well-respected operators in the sector. The
Board also has an excellent mix of skills and
functional disciplines. Details of the Board
members and their backgrounds are given
on pages 32 to 33.
Jemima Bird is the Senior Independent Director
and leads meetings of Non-Executive Directors,
appraises the Chairman’s performance and
provides a sounding board for the Chairman
and is available as an intermediary to the other
Directors when necessary.
Jemima Bird is the designated Non-Executive
Director in respect of workforce engagement
and has regular meetings with the Group’s
People Director to discuss all relevant matters.
Jemima Bird has also been and is available
to shareholders if they have any concerns.
Jemima can be contacted by shareholders
through the normal channels of Chairman,
Chief Executive Officer (“CEO") or Chief
Financial Officer (“CFO") where their issues
have failed to be resolved or for which contact
with any other office holder is inappropriate.
Revolution Bars Group plc Annual Report and Accounts 2021
37
The Chairman confirmed to shareholders
in the Notice of the Annual General Meeting
(“AGM") that he and the Board believe that
the performance of each Director, both
Executive and Non-Executive, and the
Board Committees continue to be effective
and demonstrate commitment to their
relevant responsibilities.
Board governance
The Board is appointed by shareholders,
who are the owners of the Group. The Board’s
principal responsibility is to act in the best
interests of all shareholders within the legal
framework of the Companies Act 2006. It is
also collectively responsible to shareholders
for the long-term success of the Group and it
agrees the strategic direction and governance
structure that will help achieve this long-term
success and deliver shareholder value. The
Board oversees those matters that it regards
as critical to the success of the Group including
corporate and brand strategies, accounting
policies and maintaining a sound system of
internal control, risk management, monitoring
the performance of senior management and
ratifying all senior appointments, and
establishing the remuneration and reward
framework for the entire workforce to ensure
that this is consistent with the Group’s cultural
values and will result in a full engagement.
The Board’s main responsibilities are included
in a schedule of matters reserved for the
Board, as set out below:
•
•
•
•
•
•
•
•
•
•
•
•
agreeing the Group’s strategy
and objectives;
changing the funding structure
and capital of the Group;
approving changes to the Group’s
bank lending facilities;
approving the annual budget;
approving the Annual Report and
Accounts, and interim financial statements;
approving the Group’s dividend policy
and declaration of dividends;
reviewing the effectiveness of the Board;
reviewing the effectiveness of risk
management processes and the Group’s
internal control systems;
approving significant expenditure
commitments and material transactions
and contracts;
ensuring dialogue with the Group’s
major shareholders takes place on
a regular basis;
appointing and removing Directors
and other members of the senior
management team;
determining the remuneration policy
and adjustments to the remuneration for
Executive and Non-Executive Directors
and the senior management team;
•
•
•
•
•
•
approval of the Group’s bonus and
incentive arrangements at all levels;
reviewing the Group’s overall corporate
governance arrangements;
delegating authority to the CEO;
setting annual objectives for the business
in line with the current Group strategy;
monitoring performance of the Group’s
objectives through Board reports,
which include updates from the CEO,
the CFO and other functional heads
of key departments; and
considering and continually updating a
rolling agenda of items that includes any
current issues or matters as they arise.
The Board has an ongoing process for
identifying, evaluating and managing the
principal risks facing the Group, including
those that would threaten its business model,
future performance, solvency or liquidity. This
process has been in place throughout the year
under review and up to the date of approval of
the Annual Report and Accounts. The principal
risks are regularly reviewed by the Board.
A description of these risks together with an
assessment of how they are being managed
or mitigated is included on pages 18 and 19.
Effective operation and improvement of
the Group’s risk management and internal
control systems has remained a key focus
for the Board during the reporting period.
The strengthening of the finance team in
recent years through recruitment and a
focus on training and development, and
improvements in financial reporting and
forecasting capabilities have served the
business well during 2021 and particularly
during the COVID challenges. The speed and
efficiency with which additional debt facilities,
the equity fundraises and the admission
to AIM took place was testament to having
a high-performing team in place.
The Risk Committee formed in 2018,
meets quarterly, and continues to improve
the management of risk across all areas of the
business and to hold individuals to account.
The Committee’s terms of reference centre
around Health and Safety and minimising
cash losses but extend to the identification
and management of any business risk. In the
lead in to, during and post the Government
enforced closure of pubs and restaurants,
the Committee members, which are made
up of relevant management and department
heads, were focused on the health and safety
aspects of COVID to ensure that when trading
was allowed to recommence, the Group could
provide a safe environment for staff and
customers. All Board Committees play an
essential role in supporting the Board to
implement its strategy and provide focused
oversight of key aspects of the business.
Minutes and action points arising from all
Committee meetings are circulated to all
Directors and reviewed at Board meetings.
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The full terms of reference for each
Committee are available on the Group’s
website, www.revolutionbarsgroup.com.
Board balance and independence
The Code recommends that a group outside
the FTSE 350 (such as the Group, an AIM
listed business) should have at least two
independent Non-Executive Directors, being
individuals determined by the Board to be
independent in character and judgement and
free from relationships or circumstances which
may affect, or could appear to affect, the
Directors’ judgement. It also recommends
that a non-FTSE 350 group’s remuneration
and audit committees should comprise at least
two independent Non-Executive Directors,
and that its nomination committee should
comprise a majority of independent Non-
Executive Directors. The Group has complied
fully with these recommendations throughout
the reporting period.
Chairman and Chief Executive
Officer
The Group has established a clear division
between the respective responsibilities of
the Non-Executive Chairman of the Board
and the CEO. The Non-Executive Chairman
is Keith Edelman and he is responsible for
the effective operation, leadership and
governance of the Board, leading the
Board’s discussions and its decision-making.
The Chairman promotes a culture of
openness and debate by facilitating the
effective contribution of Non-Executive
Directors and ensuring constructive relations
between Executive and Non-Executive
Directors. The CEO is Rob Pitcher,
who, through delegation from the Board,
is responsible for leading the Group’s
business organisation and performance and
the day-to-day management of the Group.
This separation of responsibilities between
the Chairman and the CEO, coupled with the
schedule of matters reserved for the Board,
ensures that no individual has unfettered
powers of decision-making.
Non-Executive Directors and
independence
The independence of each Non-Executive
Director was considered at the time of their
appointment. The Group’s Non-Executive
Directors provide a broad range of skills and
experience to the Board which assists both in
their roles in formulating the Group’s strategy
and in providing constructive challenge to the
Executive Directors. The Group considers that
each Non-Executive Director continues to be
independent for the purposes of the Code.
Governance ReportFinancial StatementsStrategic Report
38 Revolution Bars Group plc Annual Report and Accounts 2021
CORPORATE GOVERNANCE
Board meetings
The Board’s intention is to meet at least
eight times per year for structured Board
meetings covering all aspects of the business.
The operating restrictions imposed by COVID
from March 2020 made physical meetings
impossible at times, but many Board calls
and virtual meetings using video software
such as Zoom and Teams were used in order
to hold meetings. These meetings were
organised and managed in exactly the same
way as a physical meeting with an agenda and
papers distributed in advance, the meeting
chaired in the same way and minutes and
action points arising from the meeting
prepared and approved in due course.
Meeting papers include business reports
and updates from the CEO and the CFO.
Members of the Group’s senior management
team are also invited to present at Board
meetings on a regular basis, as appropriate,
so that Non-Executive Directors keep
abreast of developments in the Group.
Due to COVID-19 and the increased
complexities and necessary speed associated
with organising increased debt facilities, the
equity fundraises, and other urgent matters,
the Board met on considerably more
occasions than would be considered normal.
During the 53 weeks to 3 July 2021 there
were 26 Board calls or meetings. These
meetings have been held predominantly
virtually, with a number attended in-person
by all members, and on occasion by some
members depending on requirements.
The attendance record of each of the
Directors at full Board and the sub-committees
of the Board is set out below:
Keith Edelman
Rob Pitcher
Danielle Davies
Mike Foster
Jemima Bird
William Tuffy
Board
Audit
Remuneration
Nomination
Number of meetings
26
26
15
14
22
21
4
4
4
2
4
4
7
7
5
3
7
7
–
–
–
–
–
–
Attendance of Executive Directors to Remuneration and Audit Committee meetings are by invitation only.
Appointment and tenure
The Board believes that all Directors are
effective, are committed to their roles and have
sufficient time available to perform their duties.
Mike Foster retired from the Board after the
2020 AGM held on 22 December 2020 and
Danielle Davies was appointed as CFO.
All members of the Board will be offering
themselves for election at the Group’s 2021
AGM. All Directors have service agreements
or letters of appointment and the details of the
terms of their engagement are set out in the
Directors’ Remuneration Report. The service
agreements and letters of appointment are
available for inspection at the Group’s
registered office during normal business hours.
No other contract with the Company or
any subsidiary undertaking of the Company
in which any Director was materially
interested subsisted during or at the
end of the financial period.
Evaluation and effectiveness
The Chairman met with the Non-Executive
Directors on at least one occasion during the
year without the Executive Directors present
to discuss Board balance, the performance
of each Executive Director, monitor the
powers of individual Executive Directors
and discuss other issues pertaining to the
effective operation of the Board.
Development
In line with the Code, the Group ensures
that any new Directors joining the Board
receive appropriate support and are given a
comprehensive, formal and tailored induction
programme organised through the
Company Secretary, including the provision
of background material on the Group, briefings
with senior management and accompanied
operational visits. Each Director’s individual
experience and background will be taken into
account in developing a programme tailored
to their requirements. Any new Director will
also be expected to meet with major
shareholders if required.
Directors’ conflicts of interest
Directors have a statutory duty to avoid
situations in which they have or may have
interests that conflict with those of the Group
unless that conflict is preauthorised by the
Board. This includes potential conflicts that
may arise when a Director takes up a position
with another company. The Company’s
Articles of Association allow the Board to
authorise such potential conflicts, and there
is a procedure in place to deal with any actual
or potential conflict of interest. The Board
deals with each appointment on its individual
merit and takes into consideration all the
circumstances. All potential conflicts approved
by the Board are recorded in a conflicts of
interest register, which is reviewed by the
Board on a regular basis to ensure that the
procedure is working effectively.
At the Board meeting of 15 February 2021,
William Tuffy advised the Board that he would
be taking up a directorship at Structadene
Limited, a private, unquoted company, with
effect from 1 March 2021. Hatton Garden
Properties Limited, who are landlord of the
Swansea bar which belongs to Revolution
Bars Limited, are a 100% wholly owned
subsidiary of Structadene Limited.
There were no other potential conflicts
during the period under review.
External directorships
The service agreements of the Executive
Directors do not permit them to accept
external commercial Non-Executive Director
appointments. Where Non-Executive Directors
have external directorships, the Board
is comfortable that these do not impact
on the time that the Non-Executive Director
devotes to the Group and believes that
such experience enhances the capability
of the Board.
Information and support available
to Directors
All Board Directors have access to the
Company Secretary and Assistant Company
Secretary, who advise on governance matters.
The Chairman and Company Secretary work
together to ensure that Board papers are clear,
accurate, delivered in a timely manner to
Directors, and of sufficient quality to enable
the Board to properly discharge its duties.
Specific business-related presentations are
given to the Board on a regular basis during
the course of the year by members of senior
management to keep the Board abreast of
major initiatives and any significant challenges
faced by the business and this allows the
Board the opportunity to influence and
challenge business strategy and potentially
identify other related opportunities. As well
as the support of the Company Secretary,
Revolution Bars Group plc Annual Report and Accounts 2021 39
there is a procedure in place for any Director
to take independent professional advice at
the Group’s expense in the furtherance of
their duties, where considered necessary.
Shareholder engagement
Responsibility for shareholder relations
rests with the Chairman, the CEO and the
CFO. They ensure that there is effective
communication with shareholders on matters
such as governance and strategy, and they
are responsible for ensuring that the Board
understands the views of major shareholders.
The Board aims to present a balanced and
clear view of the Group in communications
with shareholders and seeks to be transparent
in describing how it views the Group’s market
segment and the prospects for the business.
The Board communicates with shareholders
in several ways. The full and half-year reporting
is followed by presentations by the CEO and
CFO to relevant market analysts and a series of
meetings with institutional shareholders as well
as hosting Group meetings for larger private
investors who appreciate direct contact with
the Executive Directors. At the same time,
the Company’s joint brokers take the
opportunity to arrange meetings with
prospective shareholders to introduce them
to the Group as an investment opportunity.
Periodically, visits are arranged to business
sites to give analysts and major shareholders
first-hand experience of how the business
operates. These visits and meetings are
principally hosted by the CEO and the CFO,
although other senior management is present
from time to time. Any relevant material
resulting from such meetings is uploaded
to the Group’s website so that it is available to
all shareholders. The Board receives regular
updates at its meetings on the views of its
shareholders as well as any material changes
in shareholdings as advised by its brokers.
A detailed list of shareholders is updated
and circulated to the Board quarterly.
The Group’s corporate website is also
regularly updated with news and market
information, including this Annual Report and
Accounts, which sets out the Group’s strategy
and performance together with its plans for
future growth.
independent Auditors
Towards the end of the current year’s external
audit, and therefore after the end of the
reporting period, the Committee reviewed
the effectiveness of the audit and concluded
it was satisfactorily effective.
2021 Annual General Meeting
The AGM of the Company will take place at
11.00 am on Wednesday 22 December 2021
at Revolution Bar, Parsonage Gardens,
Manchester and shareholders will be able
to attend this year in person. The Notice
of the 2021 AGM can be found in the Circular
and discloses the amounts paid to Directors
during the 53 weeks ended 3 July 2021.
The report includes a link to the Group’s
corporate website where the remuneration
policy for the Company’s Directors is set out.
Danielle Davies
Chief Financial Officer
and Company Secretary
15 November 2021
that will be made available on the Company’s
website (and posted to shareholders who have
requested a hard copy of any such document)
at the same time that this Annual Report and
Accounts is published and made available
on the Company’s website. The Notice of
the 2021 AGM sets out the business of the
meeting and explanatory notes on all
resolutions. Separate resolutions are
proposed in respect of each substantive issue.
The Chairman, the Chairman of each of the
Committees and both Executive Directors
will be present at the 2021 AGM to answer
shareholders’ questions.
If any amendments to the arrangements for
the AGM are required due restrictions relating
to COVID, these will be communicated via the
website and the regulatory news service.
Remuneration Committee Report
The Remuneration Committee Report is set
out on pages 48 to 53. The report describes
how the remuneration policy is implemented
Governance ReportFinancial StatementsStrategic ReportCompany overview 40 Revolution Bars Group plc Annual Report and Accounts 2021
BOARD
BUSINESS REVIEW AND STRATEGY
•
Reviewed the Group’s strategy and vision
•
•
•
•
•
Received regular presentations from
operating division Directors and business
function Directors to consolidate the
understanding of trading performance,
opportunities and challenges
Reviewed progress reports on major
work streams, new concepts and
business plans in pursuance of strategy
Reviewed various potential
acquisition opportunities
Approved CVA of Revolution Bars Limited
Agreed Board agenda programme
for the year
FINANCIAL
•
Received regular financial performance
updates from the Chief Financial Officer
•
•
•
•
Approved 2020 Annual Report and
Accounts and Annual General Meeting
(AGM) business
Approved 2021 interim report and
trading updates
Reviewed and approved 2021 Forecast
updates and the annual budget
Reviewed and approved three-year
financial model update
INTERNAL CONTROL
AND RISK MANAGEMENT
•
Reviewed minutes of Risk
Committee meetings
•
•
•
Received regular reports on litigation
and regulatory matters including licensing
updates and health and safety matters
Reviewed effectiveness of risk
management and internal control systems
Reviewed all insurance arrangements
ahead of June 2021 renewal
Revolution Bars Group plc Annual Report and Accounts 2021
41
GOVERNANCE AND SHAREHOLDERS
Executive Director virtual meetings
•
with individual institutional shareholders
following publication of FY20 results
and FY21 interims
Reviewed feedback from institutional
shareholders following Executive
Director meetings
Review of shareholder register (quarterly)
•
Approved 2020 Modern Slavery Statement
Received regular updates on health
and safety
Reviewed and amended Company Share
Dealing Policy following the Company’s
admission to AIM
Approved amendments to Terms
of Reference for Audit, Remuneration
and Nomination Committees following
the Company’s admission to AIM
•
•
•
•
•
•
COVID-19
•
Reviewed and approved several market
updates on trading and measures to
improve liquidity and access to funding
•
Approval of a two-staged increase in
bank lending facilities, including a new
£16.5 million CBILS facility, and further
£3.5 million CLBILS facility in April 2021
Approval of shareholder circular in relation
to a Placing and Placing and Open Offer
to raise £15.0 million of new equity in
July 2020 and a further £21.0 million
of new equity in June 2021
•
•
Regular progress reviews of measures
taken to minimise the Group’s cost base
during the enforced closure period
Reviews of safety protocols for reopening
to ensure that all reasonable measures
were being taken in accordance with
available guidance for the safe operation
of venues for both team members
and customers
OTHER
•
Reviewed and approved changes to
the Executive Management structure
•
•
•
•
•
Reviewed the Group’s IT strategy, including
proposed changes to systems architecture,
cyber-security protection, GDPR
procedures, and organisational changes
to encourage more proactive development
to drive competitive advantage
Reviewed and approved major supply
contract proposals with major drink and
food brands
Reviewed six-monthly Quality-of-Life
Survey results undertaken across the
entire workforce to better understand the
levels of workforce engagement and any
underlying issues requiring attention
Top to bottom review of bonus incentives
for employees at all levels to ensure
improved balance and fairness between
different groups of employees
Reviewed and recommended grant of
share options for certain senior employees
to Remuneration Committee
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Financial StatementsStrategic ReportCompany overview
42 Revolution Bars Group plc Annual Report and Accounts 2021
NOMINATION COMMITTEE
Dear
shareholder
I am pleased
to introduce
the report of
the Nomination
Committee for
the 53 weeks
to 3 July 2021.
Responsibilities
The Committee’s terms of reference can
be found on the Group’s website and can
be obtained from the Company Secretary.
The responsibilities of the Committee, as
covered in its terms of reference, include
reviewing the Board composition, appointing
new Directors, the reappointment and
re-election of existing Directors, succession
planning taking into account the skills and
expertise that will be needed on the Board
in the future, reviewing the time requirement
from Non-Executive Directors, determining
membership of Board Committees and their
modus operandi, and ensuring an objective
evaluation of the performance of the
Board and each Director takes place
on a regular basis.
Composition
The Code recommends that a majority
of members of the Nomination Committee
should be independent Non-Executive
Directors. The Committee is chaired by me
as independent Non-Executive Chairman,
and its other members are Jemima Bird
and William Tuffy who are independent
Non-Executive Directors, and the Chief
Executive officer (“CEO"), Rob Pitcher.
Accordingly, the Committee complies with
the Code recommendation. By invitation,
the meetings of the Committee may be
attended by the Chief Financial Officer
(“CFO") although this did not occur during
the year under review.
Meetings and attendance
During the 53 weeks ended 3 July 2021,
the Nomination Committee did not meet
formally due to the only recent change to
the Board being agreed in FY20, being the
appointment of Danielle Davies. Furthermore,
Board attention has been focussed on
COVID-19 in the year. The Committee formally
reviews succession plans for all Board and
senior management positions so that in the
event of unforeseen events, there is a clear
and agreed understanding of both the
short-term and long-term actions that would
be implemented, and in certain cases other
changes made to ensure that appropriate
contingencies are in place and operational
vulnerabilities minimised.
The Committee will continue to meet formally
at least once a year from FY22 and at such
other times as the Board or the Committee
Chairman requires. The Committee has access
to sufficient resources to carry out its duties,
including the services of the Company
Secretary. Independent external legal and
professional advice is taken if the Committee
believes it is necessary to do so, this typically
being related to executive search matters
and Board performance evaluation.
Election of Directors
On the recommendation of the Committee,
per the articles of association, and in line
with the Code, each of the Company’s
serving Directors will stand for election at
the forthcoming AGM and will subsequently
offer themselves for re-election on an annual
basis.The biographical details of the Directors
are set out on pages 32 to 33.
Diversity
We pride ourselves on being a diverse
and inclusive business. All employees
are welcomed and treated with respect,
regardless of their background. We are
committed to offering equal opportunities for
colleagues to develop, progress and grow.
The Committee supports the
recommendations outlined in the Hampton-
Alexander Review “FTSE Women Leaders”
and is aware of the need to increase the
number of women on the Board and in other
senior management positions. The Board
strives to make appointments based on merit
and against objective criteria to ensure the
best individual is appointed for each role and
that the appointee can add to or complement
the existing range of skills and experience of
the relevant team. However, the Board is also
committed to equality and acknowledges that
it must lead by example. Recent senior
management appointments of Chief Financial
Officer, People Director, Marketing and Sales
Director, and Commercial Director have
all involved members of the Board in the
appointment process and all appointees
have been female. At the end of the reporting
period, 45% (2020: 30%) of the positions
at Board and senior management level were
female. This represents a significant step
forward towards gender equality and the
We have created a D&I Board represented
by individuals across the workforce
to bring a voice to our colleagues”
Keith Edelman
Chairman of the Nomination Committee
Revolution Bars Group plc Annual Report and Accounts 2021 43
Gender pay gap
Following the disruption caused by the
enforced closure of the business during
COVID-19 and the allowance in accordance
with the extension granted by the GEO and
EHRC in the prior year, the Group published
its gender pay report in late 2021. The effect
of COVID-19 has reduced the qualifying
workforce for analysis in the report, and the
Group therefore expects to present a more
meaningful measurement in 2022 also.
The latest report can be downloaded
from our corporate website at
www.revolutionbarsgroup.com.
I hope to be able to take any questions from
shareholders on the work of the Nomination
Committee at the Annual General Meeting
on 22 December 2021.
Keith Edelman
Chairman of the Nomination Committee
15 November 2021
Employee Gender split
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Male
Female
Board and senior
management gender split
S
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Male
Female
Board believes that appointing females
to these key positions will help drive change
throughout the Group.
Our commitment to supporting equality
and diversity has been demonstrated by
being regularly represented at and actively
participating in “Women in Hospitality,
Travel and Leisure”, which is a forum for
organisations in our industry sector to
collaborate and work up tangible actions
to improve diversity and inclusion across
the sector. We have also provided support
in the form of hosting facilities, including free
food and drink, for Plan B mentoring events.
Plan B mentoring is an initiative organised by
a small group of female hospitality executives,
to prepare senior women executives for
Board level positions in our sector.
Of 2,495 employees, females represented
approximately 46% of the workforce as at
3 July 2021 (27 June 2020: 45%). The Group
is committed to continuing to develop the
potential of its female employees through
its training programmes and its corporate
development pipeline.
Diversity also encompasses background,
ethnicity and disability. The Board is fully
committed to the principles of equality and
diversity throughout the business and
recognises that there is more to achieve in
this area. During the year, we continued our
Diversity and Inclusion strategy, focused
solely on driving the right behaviours and
actions across every part of the business.
We have created a D&I Board represented
by individuals across the workforce to bring a
voice to our colleagues, and we have invested
significant training resource to ensure that
every employee understands and is fully
engaged with the principles. Every employee
has been required to undertake an online
training module on equality and diversity.
The training module concludes with a short
test and the training does not complete until
a pass has been achieved.
The Board acknowledges the recent protests
against racism and understands that it needs
to listen more closely to both our teams
and our guests as part of our own ongoing
education in these matters. We know that
tackling inequality begins by understanding it,
recognising it, and then calling it out. We are
committed to listening more intently to our
teams’ views and providing a safe place for
them to share their ideas, thoughts, and
feedback. This will better inform us, aid our
understanding of the wider issues and ensure
that both as a business and as a team we
learn and move forward in the right way.
44 Revolution Bars Group plc Annual Report and Accounts 2021
AUDIT COMMITTEE
Dear
shareholder
I am pleased
to introduce
the report of
the Audit Committee
for the 53 weeks
ended 3 July 2021.
The Code recommends that all members of
the Committee be Non-Executive Directors,
independent in character and judgement and
free from any relationship or circumstance
which may, could or would be likely to, or
appear to, affect their judgement and that
at least one such member has recent and
relevant financial experience. Accordingly, the
Committee comprises all three independent
Non-Executive Directors including me as
Committee Chairman, considered by the
Board to have recent and relevant financial
experience due to my previous experience as
an Audit Committee Chair in another publicly
listed company, in other senior financial roles,
and my FCA and FCCA qualifications.
I have over 35 years’ experience in senior
general and financial management roles in
Retail, FMCG and property investment and
management and have been involved with
business transformation and turnaround
projects in companies ranging from large
multi-nationals to mid-sized businesses and
start-ups. I have also held Non-Executive
positions, including four years at Beale plc,
during which I was initially senior independent
Director and then Non-Executive Chairman.
Whilst at Beale plc, I served as chair of both
audit and remuneration committees. I have
solid experience in retail and many other
complimentary sectors and am therefore
suitably experienced to lead the Committee.
Regular Committee meetings are also
normally attended by the Chief Executive
Officer, Chief Financial Officer and our
external auditor, PwC. The Chief Financial
Officer, who is also the Company Secretary,
acts as secretary to the Committee. Other
members of management, particularly senior
financial managers, may be invited to attend
depending on the matters under discussion.
The Committee meets at least twice a year
at the appropriate times in the reporting and
audit cycle and seeks also to ensure that
twice per annum there is an opportunity
for meeting time with the external auditor
without members of management present.
The Committee was set up by the Board to
assist it with its responsibilities in respect of
financial reporting, including reviewing annual
and half-year results, external auditing,
internal controls, and advising on the
independence and appointment of the
external auditor. The Committee routinely
reviews the impact of any upcoming changes
in accounting treatment as a result of new
or modified IFRS that are likely to materially
impact the Group and also reviews as a matter
of course any matters considered by the
external auditor to be of significant audit risk.
PricewaterhouseCoopers LLP (“PwC”)
was appointed as the Group’s external
auditor on 29 January 2018; the period
under review represents their fourth year
of audit. The Committee is satisfied that
PwC has undertaken its responsibilities
as the Group’s external auditor to a high
standard and therefore the Committee will
be recommending that PwC be reappointed
as auditor at the 2021 Annual General Meeting
(“AGM”). The PwC audit partner responsible
for the Group is Randal Casson.
During the year, the Directors continued
to assess the following key areas:
•
•
•
•
•
•
Board governance, including the
Committee and the procedure for
assessing the Group’s key risks;
management accounting processes
to ensure that high-quality information
is provided to the Board;
external financial reporting procedures
and audit arrangements and reporting
standards, with a particular focus in the
prior and current year on the impact and
disclosures relating to IFRS 16, as well
as appropriateness of going concern
conclusions and stress testing;
complex transactions such as the
arrangements to surrender and re-gear
a number of leases including deferred
consideration and a subsequent
renegotiation of the consideration
following the Government enforced closure
of venues, and the accounting for a number
of unique circumstances, including reliefs
provided by stakeholders as a result
of COVID-19;
information systems; and
budgeting and forecasting procedures
and controls.
The Committee routinely reviews
the impact of any upcoming changes
in accounting treatment as a result
of new or modified IFRS.”
William Tuffy
Chair of the Audit Committee
Revolution Bars Group plc Annual Report and Accounts 2021
45
The Directors recognise the need to maintain
robust financial reporting procedures, review
them on a continuing basis and adapt them
to changing circumstances. Their review
forms part of the Committee’s agenda going
forward together with its wider role and
responsibilities, which are set out in more
detail in this report.
I hope to be able to take any questions from
shareholders at the AGM on 22 December
2021, at which the Annual Report will be
approved, to answer any questions on the
work of the Audit Committee.
Assessing effectiveness of external
audit process
Whilst the Committee does not rely solely
on the work of the external auditor, it regards
the breadth and quality of the work performed
by the external auditor as contributing
significantly to several of the Committee’s
objectives, particularly regarding assurance
relating to the accuracy and reliability of its
external reporting and for reviewing
objectively the Group’s systems and internal
controls. For that reason, planning meetings
are held with the external auditor to review
their proposed work programmes and any
recommendations made by the external
auditor are reviewed in depth, as are their
findings from their review of the interim and
year-end accounts. The Committee meets
to discuss the performance of the external
auditor and to consider priority areas for
future work.
For the auditor to be fully effective, they must
be totally independent from the Company.
To that end, the Committee intends to ensure
that no other work is performed by the
external auditor so that their independence
is not compromised. New EU legislation on
permitted non-audit services came into effect
from 17 June 2016 which introduced a
permitted non-audit services fee cap of 70%
of the average audit fee over a consecutive
three-year period. This cap came into effect
for the Group in the prior financial period,
ended 27 June 2020. During the year,
the value of non-audit services provided
by the external auditor amounted to nil
(2020: £0.02 million). The non-audit services
in the prior year related only to the interim
review; whilst this is classified as non-audit
work, the Committee believes that it is
incidental to the role as auditor and is
supportive to performing its role as auditor.
Following the move to AIM, an interim review
by the auditors is no longer required.
Role and responsibilities
The Committee’s terms of reference can
be found on the Group’s website or may
be obtained from the Company Secretary.
The primary function of the Audit Committee
is to assist the Board in fulfilling its
responsibilities to protect the interests of
shareholders as to the integrity of financial
reporting, audit, risk management and internal
controls. In doing so the Committee shall act
in a way which would be most likely to
promote the success of the Company for the
benefit of its members as a whole and in so
doing have regard (amongst other matters) to:
•
•
•
•
the likely long-term consequences
of any decision;
the impact of the Company’s operations
on the community and the environment;
the desirability of the Company maintaining
a reputation for high standards of business
conduct; and
any other matters required to be
considered in accordance with section 172
of the Companies Act 2006.
External Audit
•
Audit tender process: The Committee
oversees the exercise of undertaking
a tender for external audit services as
required. The last such tender was in 2018.
•
•
Appointment, reappointment and
dismissal of auditor: Taking into
account the obligations noted above,
the Committee considers and makes
recommendations to the Board, to be
put to the shareholders for approval at
the AGM, regarding the appointment and
reappointment or dismissal of the external
auditor. The Committee oversees the
selection process of new auditors and
ensures that all firms participating in the
tender process are given access to such
information and individuals as may be
appropriate. If an auditor resigns the
Committee investigates the circumstances
and decides whether any action is required.
Remuneration of auditor: The Committee
approves the remuneration and terms of
engagement, including an engagement
letter, ensuring that the level of fees is
appropriate to enable an effective and
high-quality audit to be conducted. The
Committee reviews the audit fees annually
and also considers any other fees
proposed in respect of non-audit activities,
particularly in relation to the impact this
may have on independence, taking into
account the relevant regulations and
ethical guidance on the subject.
•
•
•
•
Independence of auditor: The Committee,
at least annually, reviews and satisfies itself
with the independence and objectivity of
the external auditor, in consideration of
relevant UK professional and regulatory
guidelines. The Committee satisfies itself
that there are no relationships such as
family employment or financial investment,
or other business arrangements between
the Group and the auditor, other than in the
ordinary course of business and also
monitors the auditor’s compliance with
relevant ethical and professional guidance
on the rotation of audit partners, the level
of fees paid by the Company compared
to the overall fee income of the firm, office,
partner and other related requirements.
Audit effectiveness: The Committee
reviews the effectiveness of the external
audit process, taking account of relevant
UK professional and regulatory
requirements.
Employment of former employees
of auditors: The Committee recommends
to the Board a policy on the employment
of former employees of the auditors and
monitors implementation of this policy.
Audit qualifications: The Committee
annually assesses the qualifications of
the auditors, their expertise and resources,
as well as the effectiveness of the
audit process.
• Coordination with internal audit:
The Committee seeks to ensure
coordination of internal audit activities
alongside the external audit.
•
Audit planning: The Committee meets
regularly with the auditors including at
the planning stage for the year-end, where
the scope of the audit and the annual audit
plan are considered in relation to areas of
high risk based on business developments
and performance in the year, and post the
detailed audit work and prior to finalisation
of the financial statements. The Committee
reviews the findings of the audit and
discusses any major issues arising during
the audit, any relevant accounting and audit
judgements, the levels of errors identified
during the audit and the effectiveness
of the audit. The Committee also discusses
any matters the auditor wishes to raise
(in the absence of management,
if appropriate). The Committee ensures
that any representation letters,
management letters and responses from
management is reviewed and acted upon.
Governance ReportFinancial StatementsStrategic ReportCompany overview 46 Revolution Bars Group plc Annual Report and Accounts 2021
AUDIT COMMITTEE
Financial Statements
•
Integrity of financial statements: The
Committee monitors the integrity of the
financial statements by a process of
reviewing and challenging, as appropriate:
-
-
the consistency of or changes
to accounting practices and policies
across the Group including
going concern;
the methods used to account for
significant or unusual transactions
where different approaches may
give materially different outcomes;
- whether the Group has followed
appropriate accounting standards
and made appropriate estimates
and judgements, and considering the
views of the external auditor; and
-
the clarity of disclosure in the
Company’s financial statements and
the corporate governance statement,
and reports to the Board if it is not satisfied
with any aspect of the proposed financial
statements.
Significant issues and judgements:
The Committee reviews and may report
to the Board for ratification of significant
financial reporting issues and critical
judgements contained in the financial
statements, particularly if the auditors have
expressed any uncertainty or concerns.
Other statements containing financial
information: The Committee reviews other
statements containing financial information
where a review prior to Board approval is
practicable and consistent with any prompt
reporting requirements under any law or
regulation including the AIM Regulations.
Annual Report and Accounts: The
Committee reviews the content of the
Annual Report and Accounts and advises
the Board on whether, taken as a whole,
it is fair, balanced and understandable
and provides the information necessary
for shareholders to assess the Company’s
performance, business model and strategy,
and whether it informs the Board’s
statement in the Annual Report on these
matters as required under the Code.
•
•
•
Other Matters
•
Corporate Governance: The Committee
gives due consideration to laws and
regulations, the provisions of the UK
Corporate Governance Code and the
requirements of the AIM Regulations and
any other applicable rules, as appropriate.
•
Whistleblowing: The Committee reviews
the Group’s procedures for handling
allegations from whistleblowers and
ensures that these arrangements allow
for proportionate and independent
investigation of such matters and
appropriate follow up. The Committee
•
•
reviews the Company’s procedures for
detecting fraud and the systems and
controls for the prevention of bribery
and receives reports of non-compliance.
Training: The Committee is provided with
appropriate and timely training, both in
the form of an induction programme for
new members and on an ongoing basis
for all members.
S172 CA2006: The Committee assists
the Board in relation to preparing the
statement required to be published
annually describing how the Directors have
had regard to the matters set out in section
172 of the Companies Act 2006.
•
Performance review: The Committee
arranges for periodic reviews of its own
performance, and, at least annually,
reviews its constitution and terms of
reference, to ensure that it is operating at
maximum effectiveness and recommends
any changes that it considers necessary
to the Board for approval.
Meetings and attendance
During the 53 weeks ended 3 July 2021,
the Audit Committee met formally on four
occasions, with all members attending.
At all of the meetings, the Committee had
access to the external auditor without
management present.
Work performed by the Committee during
the financial year has included:
•
•
•
•
•
•
reviewing the Annual Report and
Accounts for 2020 and recommending
to the Board its adoption as fair, balanced
and understandable. In fulfilling this task,
the Committee reviewed the process
undertaken to produce the Annual Report
and Accounts 2020, which included
internal verification processes and
content approval procedures;
reviewing the Group’s accounting policies
and critical judgements and sources of
estimation and uncertainty including the
appropriateness of going concern;
reviewing the designation of certain items
of income and expenditure as Exceptional
and appropriateness of alternative
performance measures;
reviewing compliance with and explaining
any exceptions from the UK Corporate
Governance Code;
reviewing the independence and
objectivity of PwC as external auditor,
together with its effectiveness, following
the 2020 audit and recommending its
appointment to shareholders at the
General Meeting in February 2021;
reviewing the transitional rules for the
implementation of IFRS 16, its impact on
the presentation of the financial statements
and the adoption of pro forma disclosures
•
•
•
in order to show IAS 17 comparatives
in the FY20 reporting;
reviewing the auditor comments on the
FY21 interim announcement;
reviewing and approving the external audit
plan for the 53 weeks ended 3 July 2021;
receiving the external auditor’s reports
to the Committee and acting on any
recommendations therein; and
•
considering the risk assessment, mitigation
actions and assurance activities produced
by management.
Internal audit
The Group does not have an internal audit
function and to date has considered that
the key risks to the business are covered
by a combination of resources including its
compliance department, stock-takers and
area managers.
The Group’s compliance department is
responsible for managing many of the
principal risks facing the business concerning
alcohol licensing and health and safety.
Their work is supported by external
consultants and as part of these arrangements
annual contracts are in place to provide at
least two audit visits per annum to every
trading venue by fully qualified health and
safety advisers. Additionally, the Group’s
compliance department monitors and acts on
any matters relating to cash and stock losses.
For most of the period under review, the
Group employed two stock-takers who check
stocks and other compliance matters such as
cash controls on a risk assessed basis. Each
bar’s stock is counted on average between
six and eight times per annum. Stock-take
results are reviewed by both operational and
compliance management immediately the
results become available.
An important element of the area manager’s
role is to perform spot checks on cash, stocks,
licensing and health and safety matters,
as part of their regular site visits. The area
manager assessments are used, amongst
other things, for performance assessing
general managers; poor scores relating to
these matters and brand standards reduce
the bonus earnings potential of a bar’s
management team.
Risk Committee
To strengthen and complement the Audit
function, a Risk Committee is chaired by the
Chief Financial Officer and comprises several
members of the senior management team
including the Heads of Compliance, Property,
Operations, Food, IT and People. The purpose
of the Committee, which is not a Board
committee, is:
•
to identify, mitigate and prevent risk
as far as possible;
Revolution Bars Group plc Annual Report and Accounts 2021
47
•
•
•
to protect the financial, physical and
reputational image of the business;
to ensure that the Group fulfils its legal
and statutory obligations; and
to ensure visibility and transparency
over controls.
The Committee’s terms of reference are
available from the Company Secretary and
can be found on the Company’s website at
www.revolutionbarsgroup.com.
During the period, the Committee was only
able to hold two of its quarterly meetings with
all members or their deputies attending those
meetings. Following COVID-19, a key focus for
the business was operating in a safe manner
for all staff and customers and this was a key
agenda item at all senior management team
meetings rendering the quarterly Risk
Committee meetings during this period
unnecessary. The key activities of the
Committee during the period have been:
•
•
•
•
•
to monitor the audits carried out by the
external consultants and to ensure any
critical issues identified have been rectified
in a timely function;
to monitor health and safety standards
in bars including compliance certification,
reviews of updated risk assessments, and
compliance with all matters concerning
food safety;
to review serious incidents involving staff
or customers to ensure that all lessons are
learned and that any necessary
improvements to controls and procedures
to prevent a recurrence are acted upon;
to ensure the Company adheres strictly
to the licensing objectives to protect all
premises’ licenses;
to ensure that all changes in relevant
legislation and policies are identified
and acted upon in a timely manner; and
to review insurance policies and coverage.
•
Significant accounting matters
In reviewing the financial statements with
management and the external auditor, the
Committee has discussed and debated
the critical accounting judgements and key
sources of estimation uncertainty as set out in
note 1 to the consolidated financial statements.
As a result of its review, the Committee has
identified the following items that require
particular judgement or have significant
impact on the interpretation of the Annual
Report and Accounts for 2021:
•
Accrued rebates from suppliers: Rebates
are usually invoiced on a monthly or
quarterly basis based on supplied volumes
and whilst these can usually be quickly
assessed post-period, judgements
are sometimes required as to whether
longer-term contractual thresholds will
profit and loss account. The charge in
the reporting period comprises a gain
on disposal from surrender of leases,
impairment of property, plant and
equipment and right-of-use assets,
and costs involved with the property
restructure, including costs associated
with the Company Voluntary Arrangement
(see note 3 to the consolidated financial
statements). The Committee considered
the appropriateness of presenting these
items as exceptional.
Going concern: The Committee
recognises that with the degree of
uncertainty in the trading outlook and
the ever changing position of both the
UK Government and the devolved
administrations, and notwithstanding
that the business has a level of liquidity
that under normal circumstances would
be more than adequate to allow going
concern sign-off of the financial
statements, it is right to reference
material uncertainty when considering
going concern statements. Detailed
descriptions are given with regard to the
Board’s assumptions on its base case
forecast scenario as well as a severe but
plausible downside forecast scenario
so that users of the accounts are able
to understand the trading backdrops that
would likely require a further injection
of liquidity over and above that which is
currently committed. The Committee has
carefully studied the assumptions relating
to both sets of projections and believes
that they are sensible and appropriate
to the circumstances.
The Committee reviewed reports presented
by PwC detailing its key audit findings in
relation to the above matters.
William Tuffy
Chair of the Audit Committee
15 November 2021
be met. Good records are maintained in
this area to monitor volumes on a contract
by contract basis and reviewed monthly
by senior finance management, thus
minimising the degree of judgement
required. There is further complexity due
to the COVID-19 pandemic and various
periods of enforced closure of bars.
All major supplier contracts have been
extended or terms modified in order to
ensure that commitments to contractual
volumes can be maintained. Where
relevant, the Committee is satisfied that
appropriate judgements have been made.
•
• Recoverable amount of property, plant
and equipment: The Group keeps the
carrying value of its fixed assets under
review. Formal procedures are used in
each external reporting period to assess
the appropriateness of the balance sheet
asset carrying values. Due to the adoption
of IFRS 16 in FY20, right-of-use assets have
been recognised in respect of leasehold
properties, substantially increasing
reported tangible asset values and
necessitating more extensive and rigorous
impairment testing. Regears in the year
as a result of COVID-19 have also resulted
in significant increased right-of-use assets.
Also, the ongoing and frequently changing
operating restrictions and rules and
availability of Government support has
caused significant difficulty in assessing
the near-term and medium-term trading
outlook. Impairment calculations are based
upon assumptions that were considered
reasonable as at the balance sheet date.
However, given the timing to publishing the
financial statements, additional disclosures
are given in note 1 to the financial
statements to provide an understanding
of the charges that would have resulted
had the current outlook been apparent
at the balance sheet date. The Committee
has considered and approved the
assumptions regarding trading outlook
at both the balance sheet date and at
the date of signing the accounts, as well
as scrutinised all resultant impairment
charges. The Committee has also
approved a dilapidations provision to
recognise that amounts may be payable
on the expiration of lease terms if the
Group is unable or unwilling to extend
the lease on agreeable terms.
• Capitalisation of employment costs:
The Committee has reviewed capitalisation
policies, in particular the capitalisation
of internal costs in relation to property
development and IT systems development
and is satisfied that its policies and the
amounts capitalised are appropriate.
•
Exceptional items: Exceptional items on
a pre-tax basis of £5.4 million (2020: £27.8
million) represent a material item in the
Governance ReportFinancial StatementsStrategic ReportCompany overview 48 Revolution Bars Group plc Annual Report and Accounts 2021
DIRECTORS’ REMUNERATION
Dear
shareholder
I am pleased
to present,
on behalf
of the Board,
the Directors’
Remuneration
Report of the
Remuneration
Committee.
Following the Company’s move to AIM last year, the Company is not required
to apply the full Listing Rules of the Financial Conduct Authority or the
requirements of Schedule 8 (Quoted Companies Directors Remuneration
Report) as amended by the provisions of The Large and Medium-sized
Companies and Groups (Accounts and Report) Regulations 2008 (SI 2008/410)
(the “Regulations”) and The UK Corporate Governance Code) and hence is not
required to present a report on remuneration in accordance with those rules.
However, the Board considers it appropriate for the Company to provide
shareholders with information in respect of executive remuneration that follows
the “spirit” of the Regulations where appropriate.
Performance and reward in relation
to the 53 weeks ended 3 July 2021
COVID-19 has continued to severely impact
the performance of the business following
ongoing forced closures, tier systems and
significant restrictions on trade. When
permitted to trade, the business has
performed well. Management is also pleased
with the return of customers and sales since
the reopening of hospitality on 12 April 2021,
which again was restricted by outdoor trading
until 17 May 2021, and then social distancing
restrictions for the remainder of the period.
Pent-up demand continues to entice our
young customer base back, and the Group
remains hopeful for a sustained return to
normality and positive trading through FY22.
Due to lengthy closure periods and restrictions
on trading, the priorities of the senior team
shifted to ensuring the survival of the business
through careful cash management, engaging
with all stakeholders including suppliers and
landlords to elicit support, ensuring that the
Group was able to take maximum advantage
of the many forms of Government support,
and improving cash liquidity through agreeing
a substantial increase in debt funding facility
and two equity fundraises.
This has continued to be a period like no
other in the Group’s history, and one that has
stretched the senior management team to
new limits. Rarely does such good underlying
business progress and high personal
performances go without reward. However,
the management team, working closely with
the Committee throughout this difficult period,
agreed significant salary reductions to support
the business and to show solidarity with many
other stakeholders who have provided
support through this challenging period,
and concluded that it was not appropriate
to operate an annual bonus plan for the
FY21 financial period notwithstanding
the management team’s strong personal
performance.
Implementation of the policy in FY22
In respect of operating the Remuneration
Policy in FY22:
•
no changes, aside from a cost of living
increase, will be made to base salaries
of the Executive Directors, benefits or
pension provisions. Any new Excutive
Board appointments would receive
workforce aligned pension provision;
• annual bonus provision for FY22 will be
capped at 100% of salary for Executive
Directors with a majority based on sliding
scale profit-related targets and a minority
based on strategic targets. While the
profit and strategic targets are currently
commercially sensitive, details of the
targets and performance against the
targets will be disclosed in next year’s
Directors’ Remuneration Report;
This has continued to be a period like no
other in the Group’s history, and one that
has stretched the senior management
team to new limits. Rarely does such good
underlying business progress and high
personal performance go without reward.”
Jemima Bird
Chair of the Remuneration Committee
Revolution Bars Group plc Annual Report and Accounts 2021
49
•
the Committee intends to grant Restricted
Share Awards (“RSAs”) in line with the
Remuneration Policy approved by
shareholders in 2020 which will:
- be set at no more than 100% of salary
for Executive Directors;
- vest after three years from the grant
date, subject to continued employment,
satisfactory individual performance
and a positive assessment against a
performance underpin. No shares can
be disposed of by Executive Directors
until at least five years from grant, other
than those required to settle any taxes
directly related to the vesting of
those shares.
Further details in respect of the RSA grant
for 2021 are set out in the Annual Report on
Remuneration.
• shareholding guidelines will continue
to operate at 200% of salary; and
•
the two non-executive Directors (not
including the Chairman) both received
a £5,000 fee uplift for FY22.
Committee activities
The Committee met seven times during the
year. The Committee’s main activities were to:
•
determine the Chairman’s fee and the
framework and policy for the remuneration
of the Executive Directors and other
members of the Executive Committee
and ensure that they remained appropriate
in light of Covid-19;
• advise on the design of, and to determine
and agree, the total individual
remuneration package of each of the
Executive Directors and other members
of the Executive Committee, giving due
regard to any relevant legal requirements,
the provisions and recommendations set
out in the prevailing Code and the AIM
Rules and associated guidance;
• consider and approve the design of,
and targets for, the annual bonus (which
was initially postponed and then ultimately
cancelled for FY21) and long-term share
schemes operated for the Executive
Directors and other members of the
Executive Committee; and
•
oversee remuneration and benefit
structures and policies throughout the
Group’s business and to give advice
on any major changes.
In addition, the Committee has considered
how the Policy and practices are consistent
with the six factors set out in Provision 40 of
the 2018 UK Corporate Governance Code:
• Clarity: Our Policy is understood by our
senior executive team and has been clearly
articulated to our shareholders and
representative bodies (both on an ongoing
basis and when changes are proposed).
• Simplicity: The Committee is mindful of the
need to avoid overly complex remuneration
structures which can be misunderstood and
deliver unintended outcomes. Therefore, a
key objective of the Committee is to ensure
that our executive remuneration policies
and practices are straightforward to
communicate and operate.
• Risk: Our Policy has been designed to
ensure that inappropriate risk-taking is
discouraged and will not be rewarded
via: (i) the balanced use of annual and
long-term pay; (ii) the significant role
played by equity in our remuneration
arrangements; and (iii) malus/clawback
provisions.
• Predictability: Our incentive plans are
subject to individual caps and our share
plans are also subject to market standard
dilution limits.
• Proportionality :There is a clear link
between individual awards, delivery of
strategy and our long-term performance,
together with the structure of the Executive
Board directors’ service contracts, ensures
that poor performance is not rewarded.
• Alignment to culture: Our executive pay
policies are fully aligned to Revolution’s
culture through the use of metrics in our
annual incentive plans that measure
how we perform against our KPIs.
The Committee’s terms of reference are
available from the Company Secretary and
can be found on the Company’s website
at www.revolutionbarsgroup.com.
Shareholder feedback
The Committee is committed to consulting
with its major shareholders and the main
shareholder representatives, both when
material changes are being made to the
Remuneration Policy and in respect of the
implementation of the Policy. As set out
in the Annual Report on Remuneration,
the Company’s NOMAD and major
shareholders were consulted in respect of
the implementation of the Policy for FY22.
On behalf of the Board, I would like to thank
shareholders for their continued support,
and I look forward to your approval of our
Directors’ Remuneration Report at the
forthcoming AGM.
Jemima Bird
Chair of the Remuneration Committee
15 November 2021
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50 Revolution Bars Group plc Annual Report and Accounts 2021
DIRECTORS’ REMUNERATION
Directors’ Remuneration Policy
The Directors’ Remuneration Policy (as can be found at https://www.revolutionbarsgroup.com/media/1319/revbars_notice_agm_2020_final_for-
website.pdf) was approved by shareholders in 2020 by way of an advisory vote.
Annual Report on Remuneration
Composition of the Remuneration Committee (unaudited)
The Committee currently consists of Jemima Bird (Committee Chair), Keith Edelman and William Tuffy. None of the Committee has any personal
financial interest (other than as a shareholder), conflicts of interest from cross-directorships, or day-to-day involvement in the running of the
business.
The Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) may be invited to attend meetings, although are not present when
matters affecting their own remuneration is discussed. The Company Secretary or their nominee acts as secretary to the Committee.
The Committee receives independent remuneration advice from FIT Remuneration Consultants LLP (“FIT”) on aspects of senior executive
remuneration. FIT is a member of the Remuneration Consultants Group and is a signatory to its code of conduct. FIT has no connection with
Revolution Bars Group plc other than in the provision of advice on executive remuneration. The terms of engagement are available from the
Company Secretary on request.
Implementation of the remuneration policy in the 53 weeks ending 3 July 2021 (unaudited)
Base annual salary
Current Executive Director salary levels are as follows:
Role
Chief Executive Officer
Chief Financial Officer
Director
Rob Pitcher
Danielle Davies
From
1 April 2021*
£350,000
£225,000
From
1 April 2020
£350,000
–
%
Increase
0%
0%
* Or appointment to the Board if later
Salaries shown from 1 April 2021 are the contractual salaries applicable. As a result of the Government enforced closure of the Group’s trading
venues, the Executive Directors agreed to waive the normal 1 April 2020 and defer the 1 April 2021 annual salary reviews and furthermore agreed
a temporary 50% salary reduction from 29 March 2020 to 31 July 2020. Subsequently, following the commencement of the reopening of trading
venues in July 2020, the salary reduction changed to 80% of normal levels from 1 August 2020 and returned to contractual levels from 1 October
2020. However, in light of the national restrictions introduced by the UK Government from 5 November 2020, Executive Director salaries were
reduced to 75% of normal levels from 8 November 2020 to 22 May 2021. From 23 May 2021 Director salaries increased to 90% (following the
announcement for indoor hospitality to start from 17 May 2021), and then increased to contractual levels from 20 June 2021 onwards.
Annual bonus
Annual bonus provision for FY22 will be capped at 100% of salary for Executive Directors with a majority based on sliding scale profit-related
targets and a minority based on strategic targets. While the profit and strategic targets are currently commercially sensitive, details of the targets
and performance against the targets will be disclosed in next year’s Directors’ Remuneration Report.
Share awards
The Committee intends to grant Restricted Share Awards (“RSAs”) in 2021 in line with the Remuneration Policy approved by shareholders
in 2020 which will:
•
be set at no more than 100% of salary for the CEO and no more than 80% of salary for the CFO (with lower levels cascaded below Board); and
• vest after three years from the grant date, subject to continued employment, satisfactory individual performance and a positive assessment
of performance against an underpin (i.e. the Committee must be satisfied that Revolution’s underlying performance and delivery against its
strategy and recovery plans is sufficient to justify the level of vesting having regard to such factors as the Committee considers to be
appropriate in the round (including revenue, earnings and share price performance) and the shareholder experience more generally (including
the risk of windfall gains)). No shares can be disposed of by Executive Directors until at least five years from grant, other than those required
to settle any taxes directly related to the vesting of those shares.
While these award levels are within the shareholder approved Policy, they are higher than the normal RSA levels given that the Board considers
retaining and incentivising Rob Pitcher and Danielle Davies to be critical to the Company’s future success in what is an increasingly competitive
recruitment market. For information, since Rob Pitcher joined the business in June 2018, no annual bonuses have been awarded to Executive
Directors and past LTIP awards have either lapsed or are expected to lapse with no value, owing to the restrictions placed upon the business
as a result of Covid. In addition, the modest RSAs granted in 2020 provide only limited retention given that the value has remained flat given the
fundraising (which the Committee will not adjust the awards for) and continued impact of Covid.
In determining the 2021 award levels, the Committee consulted with the Company’s NOMAD and major shareholders in advance of the grant
to ensure majority support.
Revolution Bars Group plc Annual Report and Accounts 2021
51
Non-Executive Directors’ fees and incentives
The two non-executive Directors (not including the chairman) both received a £5,000 uplift for FY22.
Directors’ remuneration for the 53 weeks ended 3 July 2021 (audited)
Executive Directors
Rob Pitcher
Danielle Davies6
Non-Executive Directors
Keith Edelman
Jemima Bird
William Tuffy
Former Directors
Mike Foster
Aggregate emoluments
Fees/Salary1
£’000
Taxable
Benefits2
£’000
Pension3
£’000
Annual
Bonus4
£’000
Long-term
Incentives5
£’000
Total
£’000
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
272
310
85
–
69
80
27
31
27
31
85
180
565
632
18
17
8
–
–
–
–
–
–
–
13
20
39
37
45
42
3
–
–
–
–
–
–
–
–
–
48
42
–
–
–
–
–
–
–
–
–
–
–
–
–
–
107
–
55
–
–
–
–
–
–
–
–
–
162
–
442
369
151
–
69
80
27
31
27
31
98
200
814
711
1
Salaries shown from 1 April 2021 are the contractual salaries applicable. As a result of the Government enforced closure of the Group’s trading venues, the Executive Directors agreed to
defer the normal 1 April 2020 annual salary review and furthermore agreed a temporary 50% salary reduction from 29 March 2020 to 31 July 2020. Subsequently, following the
commencement of reopening trading venues in July 2020, the salary changed to 80% of normal levels from 1 August 2020 and returned to contractual levels from 1 October 2020. However,
in light of the national restrictions introduced by the UK Government from 5 November 2020, Executive Director salaries were reduced to 75% of normal levels from 8 November 2020 to
22 May 2021. From 23 May 2021 Director salaries increased to 90% (following the announcement for indoor hospitality to start from 17 May 2021), and then increased to contractual levels
from 20 June 2021 onwards.
2 Taxable benefits comprise medical insurance policies and car allowances.
3 Rob Pitcher received a pension provision/salary supplement of 15% of salary. Danielle Davies received a pension provision/salary supplement of 3% of salary from appointment. No pension
provision was provided to Mike Foster.
4 No annual bonus plan was operated for Executive Directors in respect of FY21 as a result of the impact of Covid-19 on the Company.
5 Based on the face value of Restricted Share Awards granted to Executive Directors on 24 December 2021 (see below).
6 Danielle Davies was appointed to the Board as CFO from 22 December 2020.
Governance ReportFinancial StatementsStrategic ReportCompany overview 52 Revolution Bars Group plc Annual Report and Accounts 2021
DIRECTORS’ REMUNERATION
Annual Report on Remuneration continued
Annual bonus (audited) for FY21
Given the impact of Covid-19 on the Group, the Remuneration Committee took the decision to postpone, and then ultimately cancel,
the introduction of the Executive Director annual bonus plan for FY21. As such, no targets were set or are therefore disclosable.
Share awards granted in FY21 (audited)
The following share awards, which were granted materially below the 100% of salary Policy maximum and below the normal award level
of 50% of salary, were issued to Executive Director in the 53 weeks to 3 July 2021:
Executive
Rob Pitcher
Danielle Davies
Type of award
RSA
RSA
1
Based on a share price of 22.5 pence on 22 December 2020.
Exercise Price
(p)
Number of
awards granted
Basis of award
Face value1
0.1
0.1
475,759
244,676
30% of salary
24% of salary
£107,046
£55,052
The awards shall vest and become exercisable on the date that is the later of the date which is three years from the date of grant being
24 December 2023 and the preliminary announcement of the results for the 52 weeks ending 1 July 2023, subject to the Group’s Remuneration
Committee being satisfied that the Group’s underlying performance and delivery against its strategy and plans is sufficient to justify the level
of vesting having regard to such factors as the Remuneration Committee considers to be appropriate in the round (including, inter alia, revenue,
earnings and share price performance) and the shareholder experience more generally (including windfall gains).
Outstanding executive share awards (audited)
Executive Director Scheme
Grant date
Rob Pitcher
Total
PSP*
CSOP
PSP
RSA
18.10.18
18.10.18
23.10.19
24.12.20
Danielle Davies
RSA
24.12.20
0.1
Total
Mike Foster
Total
PSP*
CSOP
14.11.17
14.11.17
0.1
162.0
Exercise
price (p)
No of shares at
28 June 2020
0.1
114.5
0.1
0.1
585,154
26,200
531,269
–
Granted
during
the year
Number
–
–
–
475,759
1,142,623
475,759
–
–
244,676
244,676
240,000
18,518
258,518
–
–
–
Vested
during
the year
Number
Lapsed
during
the year
Number
No. of shares at
3 July 2021
Vesting
date
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
240,000
18,518
258,518
585,154
26,200
531,269
475,759
18.10.21
18.10.21
23.10.22
24.12.23
1,618,382
244,676
24.12.23
244,676
14.11.20
14.11.20
–
–
–
*
PSP awards with associated CSOP awards attached (any awards which vest and which are exercised under the CSOP are directly offset by a reduction in vesting under the PSP
of equivalent value).
Payments made for loss of office and payments to past Directors (audited)
As announced on 13 November 2020, Mike Foster stepped down from the Board at the 22 December 2020 AGM. Mike continued as an employee
for six months (receiving his normal salary and benefits). No payments for loss of office were paid or are payable and Mike’s outstanding share
awards lapsed at cessation (as detailed in the table above). £28,638 of outstanding holiday pay was due to Mike as at the end of the reporting
period, which has subsequently been paid.
Revolution Bars Group plc Annual Report and Accounts 2021
53
Directors’ interests and shareholding guidelines (unaudited)
The following table shows Directors’ interests in the Company
Director
Rob Pitcher
Danielle Davies
Keith Edelman
William Tuffy
Jemima Bird
Beneficially
owned at
3 July 2021
Number
775,000
75,000
370,000
100,000
7,500
Outstanding Share
awards
Number
1,618,382
244,676
–
–
–
Outstanding
share awards
under all
employees
share plans
Number
–
–
–
–
–
Total interest
in shares
Number
2,393,382
319,676
370,000
100,000
7,500
Shareholding
as a % of
base salary
at 3 July 2021
49%
7%
n/a
n/a
n/a
Executive Directors are expected to build and then hold shares equal in value to at least 100% of base salary in Company shares. 50% of any
awards which vest under the Company’s LTIPs (net of any taxes due) must be retained until the requirement has been met. The table above
shows Directors’ interests in shares and the percentage of the guideline held as at 3 July 2021.
The shareholding counting towards the measurement of the guideline is based on legally owned shares. The percentage of guideline met is based
on the annual base salary and the higher of the acquisition cost of the shareholding or its current market value. Once an Executive Director meets
the required holding, the Executive Director is only required to purchase additional shares equivalent to the value of any increase in base salary.
Approval
This report was approved by the Remuneration Committee and signed on its behalf by:
Jemima Bird
Chair of the Remuneration Committee
15 November 2021
Governance ReportFinancial StatementsStrategic ReportCompany overview 54 Revolution Bars Group plc Annual Report and Accounts 2021
DIRECTORS’
The Directors present their
annual report and the audited
consolidated financial
statements of the Company
and Group for the 53 weeks
ended 3 July 2021.
At the end of the reporting
period, the Group had net
bank debt of £3.6 million
(2020: £22.0 million).”
Danielle Davies
Chief Financial Officer
Introduction
This Directors’ Report includes additional information
required to be disclosed under the Companies Act 2006,
the Code, the DTRs (Disclosure Guidance and Transparency
Rules) and the Listing Rules of the Financial Conduct
Authority. Certain information required to be included in
the Directors’ Report is included in other sections of this
Annual Report as follows:
•
•
•
the Strategic Report on pages 2 to 29 sets out a review of the
Group’s business during the 53 weeks ended 3 July 2021 and the
financial position of the Group at the end of that period to enable
shareholders to assess how the Directors have performed their duty
under section 172 of the Companies Act. The Strategic Report also
describes the principal risks and uncertainties facing the Group,
provides a fair review of the Group’s business at the end of the
financial year and an indication of likely future developments
in the business;
the Corporate Governance Statement on pages 36 to 39; and
related party transactions as set out in note 26 to the consolidated
financial statements.
This Directors’ Report together with the Strategic Report set out on
pages 2 to 29 represents the “Management Report” for the purpose
of compliance with the DTR 4.1.5R.
Results and dividend
The Group’s results for the year are shown in the statement
of comprehensive income on page 70. The Directors are not
recommending a final dividend in respect of the 53 weeks ended
3 July 2021 (2020: nil pence per share issued). There was no interim
dividend during the period (2020: nil pence per share), and thus the
total dividend for the 53 weeks ended 3 July 2021 is nil pence per
share (2020: nil pence per share).
Share capital and related matters
The Company has only one class of share and the rights attached to
each share are identical. Details of the rights and obligations attaching
to the shares are set out in the Company’s Articles of Association, which
are available from the Company Secretary and can also be found on the
Company’s website www.revolutionbarsgroup.com under investor
relations and shareholder information. The Ordinary Shares are listed
on the official list and are traded on AIM as at the date of this report,
following the Company’s delisting from the Main Market London Stock
Exchange to AIM effective 27 July 2020. The Company may refuse
to register any transfer of a share which is not a fully paid share.
At a General Meeting of the Company, every member has one vote on
a show of hands, and on a poll one vote for each share held. Details of
the voting procedure, including deadlines for exercising voting rights,
are set out in the Notice of Annual General Meeting 2021.
At 3 July 2021, the issued share capital of the Company was
230,048,520 Ordinary Shares of £0.001 each. Details of the share
capital as at 3 July 2021 are shown in note 21 to the consolidated
financial statements. In the year the Group announced and completed
two Firm Placings and Placings and Open Offers at 20 pence per New
Ordinary Share. The first raised gross proceeds of £15.0 million and net
proceeds of £14.1 million and completed in July 2020 increasing share
capital by 75,017,495, and the second raised gross proceeds of £21.0
million and net proceeds of £19.9 million and completed in June 2021
increasing share capital by a further 105,001,866.
Revolution Bars Group plc Annual Report and Accounts 2021
55
Powers of the Directors
The Directors may exercise all powers on behalf of the Group including,
subject to obtaining the required authority from the shareholders
in General Meeting, the power to authorise the issue of new shares
and the purchase of the Company’s shares. During the year, the
Directors have not exercised any of the powers to purchase shares
in the Company.
Amendment to the Company’s Articles of Association
The Company may alter its Articles of Association by special resolution
passed at a General Meeting of shareholders.
Political donations
The Group has not made in the past, nor does it intend to make in the
future, any political donations.
Restrictions on transfer
There are no general restrictions on the transfer of Ordinary Shares
in the Company other than in relation to certain restrictions imposed
from time to time by laws and regulations (for example, insider trading
laws). Pursuant to the Listing Rules, Directors and certain officers and
employees of the Group require the approval of the Company to deal
in the Ordinary Shares of the Company.
The Company has in place certain share incentive plans; details
of these can be found on page 50. As at the financial period end
on 3 July 2021 and up to the date of this report, 1,618,382 share
options have been granted to the Company’s Chief Executive Officer,
Rob Pitcher and 244,676 share options have been granted to the
Company’s Chief Financial Officer, Danielle Davies.
Directors
The Directors of the Company and their biographies are set out on
pages 32 to 33. Their interests in the Ordinary Shares of the Company
are shown in the Directors’ Remuneration Report on page 53.
Appointment and removal of Directors
Directors may be appointed by ordinary resolution of the Company or
by the Board. All Directors will stand for re-election on an annual basis
in line with the recommendations of the Code. In addition to any powers
of removal conferred by the Companies Act 2006, the Company may
by special resolution remove any Director before the expiration of their
period of office.
Directors’ indemnities and insurance
The Articles of Association of the Company permit it to indemnify the
Directors of the Company against liabilities arising from or in connection
with the execution of their duties or powers to the extent permitted by
law. The Group had Directors’ and officers’ indemnity insurance in place
in place throughout the year and at the date of approval of the financial
statements. Subsequent to the end of the reporting period, the Group
entered into a qualifying third-party indemnity (the terms of which are in
accordance with the Companies Act 2006) with each of the Directors.
Neither the indemnity nor insurance provides cover in the event that
a Director or officer is proved to have acted fraudulently.
Transactions with related parties
Details of the transactions entered into by the Group with parties
who are related to it are set out in note 26 to the consolidated financial
statements. There were no material transactions with related parties
during the 53 weeks ended 3 July 2021.
Change of control
The provisions of the Group’s share incentive plans may cause
options and awards granted to employees under such plans to vest
on a change of ownership of the Group. The Group does not have
agreements with any Director that would provide compensation for
loss of office or employment resulting directly from a change of
its ownership.
Going concern
Going concern
The Directors have adopted the going concern basis in preparing these
financial statements after careful assessment of identified principal
risks and, in particular, the possible adverse impact on financial
performance, specifically on revenue and cash flows, as a result
of restrictions imposed by the UK Government and the devolved
authorities in response to COVID. The going concern status of the
Company and subsidiaries is intrinsically linked to that of the Group.
Liquidity
At the end of the reporting period, the Group had net bank debt of
£3.6 million (2020: £22.0 million). In FY21, the Group took out three
separate Coronavirus Large Business Interruption Loan Scheme
(“CLBILS”) term loans to a sum of £20.0 million, of which £15.8 million
was still outstanding as at year-end. The Group maintains a £17.3 million
Revolving Credit Facility (“RCF”) of which no amounts were drawn
down as at year-end.
The RCF reduced from £21.0 million in June 2021, to £17.3 million
following £3.7 million of amortisation. The RCF is due to amortise by
a further £1.0 million to £16.3 million at the end of June 2022, and has
been extended to 30 June 2023 in November 2021. The interest rate
on the RCF has been increased by 1.2% with a further up-to 1%
chargeable if the RCF is drawn to within £5.0 million of total limits.
Following the refinancing in November 2021, a new deleveraging
method has been agreed with NatWest based on overperformance
compared to the severe but plausible downside case. This protects
the Group with sufficient liquidity in the event of further Government
restrictions but also allows the Group to move to a more normal
debt structure when over-delivering against the severe but plausible
downside case. This will be tested 2 July 2022, and the
overperformance between the severe but plausible downside case
and actualised FY22 will be shared between the Group and repayment
of bank facilities to NatWest, pro-rata between the RCF and CLBILS
(the “facilities”). The first £3.0 million of overperformance will be
retained by the Company to provide an additional liquidity buffer,
with any overperformance thereafter shared 50:50.
In FY21, the Group completed two equity fundraises to support liquidity.
The first completed on 27 July 2020 for gross £15.0 million, net £14.1
million, and all funds were fully received by 3 August 2020 and used
to repay the remaining outstanding balance of the RCF. A second equity
fundraising was completed on 15 June 2021 for gross £21.0 million,
net £19.9 million, and all funds were fully received by 17 June 2021.
The second fundraising was also used to repay £11.0 million of RCF,
whilst retaining sufficient funds to allow the Group to start an enhanced
refurbishment programme of its bars, and also be in a position to
take advantage of any good acquisition and expansion opportunities.
Governance ReportFinancial StatementsStrategic ReportCompany overview 56 Revolution Bars Group plc Annual Report and Accounts 2021
DIRECTORS’
Going concern continued
As at 15 November 2021, the above facilities expire and amortise as follows:
Facility
RCF
Commitment
Expiry
Amortisation
£17.3 million
30 June 2023
£1.0 million on 30 June 2022 and 30 June 2023
Overperformance deleverage on 2 July 20221
CLBILS
£15.3 million
5 July 2023
and 9 May 20242
£1.0 million per annum in equal monthly instalments
Overperformance deleverage on 2 July 20221
1
Per above, total facilities are due to amortise under an overperformance deleverage agreement to be tested on 2 July 2022.
2 The original £16.5 million CLBILS expires 5 July 2023, and the £3.5 million second CLBILS expires 9 May 2024.
In accordance with these arrangements and subject to compliance with financial covenants, the Group will have committed funding facilities
available during the going concern assessment period as follows:
31 December 2021
30 June 2022
31 December 2022
30 June 2023
RCF
£m
17.3
16.3
16.31
15.31
CLBILS
£m
15.3
14.8
14.31
13.81
Total
£m
32.6
31.1
30.61
29.11
1
Facilities are due to deleverage after 30 June 2022 under the overperformance deleverage agreement detailed above, meaning the facilities stated will reduce further at this point provided
the severe but plausible downside case net debt overperformed in FY22 by at least £3.0 million.
Current Net bank debt and available liquidity
As at 15 November 2021, the Group’s net bank cash position was £4.6
million, and therefore the Group has available liquidity of £37.2 million.
Covenants
The facilities are subject to one financial covenant only, which is that the
Group is required to maintain minimum liquidity headroom between its
net bank debt and the committed facilities on a six-month look forward
basis. The required headroom under the covenant varies on a monthly
basis, and in November 2021 it was agreed with NatWest that the
minimum liquidity covenant would be adjusted to reflect the level
of expected headroom, and bring it in line with normal banking
requirements.
Significant judgements and base case
The financing arrangements referred to in this going concern section
are expected to provide a sufficient platform for the business to meet
the trading uncertainty that lies ahead as the Group trades through
winter with the uncertainty of further potential restrictions and
lockdowns imposed by the UK Government. During the entirety of FY21
the Group has either been subject to forced closure or traded under
strict restrictions, which has severely impacted its performance.
Although the Group is hopeful of the continued normality in trading
in England, and continues to monitor the devolved nations carefully,
it is not clear what level of trade may be possible should the UK
Government impose further restrictions.
The level of sales that the Group generates drives EBITDA and cash
generation, which in turn impacts the level of liquidity required and
compliance with the covenant test. In reaching their assessment that
the financing arrangements are expected to be sufficient for the
business, the Directors have reviewed a base case forecast scenario
which assumes flat performance to the last 12 months before COVID
began, with a softer December to reflect the potential for some level
of restrictions, or reduced demand, across the UK. Capital expenditure
is included in line with that communicated during the second equity
fundraise, which retains our refurbishment and expansion programme,
which was the purpose of the second equity fundraise. Under the base
case forecast, there is no forecast breach of the banking covenant.
The forecast average amount of headroom for net bank debt relative
to the minimum liquidity covenant between December 2021 and
November 2022 is £17.9 million with the lowest point of £11.6 million
in October 2022.
Severe but plausible downside scenario
The Directors have also reviewed a severe but plausible downside case
which takes the base case and assumes a full lockdown in November
and January to April inclusive, and thus no trade in these months.
December again remains softened to reflect the potential for
restrictions, or reduced demand, and it is assumed the remaining
months will be in line with the base case. No further Government
assistance is assumed, and Capex remains at the same level as
base case. This remains an area of flexibility in the event of a longer
lockdown, whereby the programme, if necessary, could be adjusted
to enhance liquidity in the business.
The severe but plausible downside case shows no forecast breach of
the banking covenant but, as would be expected, the forecast average
amount of net bank debt headroom relative to the minimum liquidity
covenant between December 2021 and November 2022 is lower at
£5.0 million with the lowest point of £0.9 million in April 2022.
Whilst there are currently no indications that further lockdowns
and restrictions above and beyond those included in the severe
but plausible downside case would occur, the Directors note the
unprecedented decisions that have previously been taken and could
again be imposed by the UK Government. However, the Directors also
believe that if severe operating restrictions or lockdowns occurred
above those already assumed the financial effects could potentially
be mitigated wholly or partially by a number of factors that are not
reflected in the severe but plausible downside case, but which are not
all wholly within the control of the Directors, including reintroduction
Revolution Bars Group plc Annual Report and Accounts 2021
57
In addition, certain employees receive an annual bonus related to the
overall profitability of the Group.
Annual General Meeting
The Annual General Meeting (“AGM”) of the Company will take place
on 22 December 2021. The Notice of Annual General Meeting is set
out in the explanatory circular that accompanies this Annual Report
and Accounts.
Financial risk management, objectives and policies
The Group is exposed to certain financial risks, including interest rate
risk, liquidity risk and credit risk. Information regarding such financial
risks is detailed in note 23. The Group’s risk management policies
and procedures and principal risks and mitigations can be found on
pages 18 to 19.
Independent auditors and disclosure of information to
auditor
PricewaterhouseCoopers LLP (“PwC") have expressed their
willingness to be reappointed as indepdent auditors of the Company.
In accordance with section 489 of the Companies Act 2006, a
resolution for the reappointment of PwC as independent auditors
of the Company is to be proposed at the forthcoming General
Meeting on 22 December 2021.
By order of the Board
Danielle Davies
Chief Financial Officer
15 November 2021
of the Coronavirus Job Retention Scheme, further rent mitigation,
receipt of local authority grants as these are made available but which
have not been included in the Group’s forecasts, and any extension
to business rates relief.
The low level of liquidity headroom relative to the minimum liquidity
covenant in the severe but plausible downside case, and the material
uncertainty caused by COVID coupled with forecasting difficulties as
a result of constantly changing operating restrictions means that the
Group cannot be assured that it will not breach the minimum liquidity
covenant. A breach of covenant would require the bank to grant a
waiver or for the Group to renegotiate its banking facilities or raise
funds from other sources, none of which is entirely within the
Group’s control. A breach of the covenant would also result in the
reclassification of £15.8 million of non-current borrowings to current
borrowings as at the date of the consolidation statement of financial
position. The Directors have assessed, however, that given a strong
underlying business, particularly post lease surrenders of under-
performing bars and the CVA undertaken during 2020, the Group’s
existing relationships with its main creditors, its success in recent years
in obtaining covenant waivers and renegotiating its banking facilities
and recent equity fundraisings, that a request for a waiver of a covenant
breach or renegotiation of the banking facilities would be successful.
Going concern statement
Despite a return to normal trading in England since July 2021, the
severe disruption to the Group’s trade prior to that since March 2020
caused by COVID, and the resultant and frequently changing operating
restrictions imposed by the UK Government and the devolved
authorities means that there is a material uncertainty over the
going concern of the Group. This uncertainty exists because of the
unpredictability of the nature, extent and duration of COVID, and
the possibility of further restrictions or lockdowns imposed by the
Government, and how this will impact the Group’s operational
performance and in particular the level of sales and EBITDA generated
that will in turn determine the Group’s covenant compliance.
Notwithstanding the material uncertainty, after due consideration
the Directors have a reasonable expectation that the Group and the
Company have sufficient resources to continue in operational existence
for the period of 12 months from the date of approval of these financial
statements. Accordingly, the financial statements continue to be
prepared on the going concern basis. However, the impact of possible
COVID restrictions on our trading indicates the existence of a material
uncertainty which may cast significant doubt over the ability of the
Group and Company to continue as a going concern. The financial
statements do not contain the adjustments that would arise if the
Group (and the Company) were unable to continue as a going concern.
Disabled employees
Applications for employment by disabled persons are always fully
considered, bearing in mind the aptitudes of the applicant concerned.
In the event of members of staff becoming disabled every effort is
made to ensure that their employment with the Group continues and
that appropriate training is arranged. It is the policy of the Group that
the training, career development and promotion of disabled persons
should, as far as possible, be identical to that of other employees.
Employee consultation
The Group places considerable value on the involvement of its
employees and has continued to keep them informed on matters
affecting them as employees and on the various factors affecting the
performance of the Group. This is achieved through formal and informal
meetings, newsletters distributed by email and virtual briefings using
Teams software. Employee representatives are consulted regularly on
a wide range of matters affecting their current and future interests.
Governance ReportFinancial StatementsStrategic ReportCompany overview
The directors are responsible for safeguarding
the assets of the group and company and
hence for taking reasonable steps for the
prevention and detection of fraud and other
irregularities.
The directors are also responsible for
keeping adequate accounting records that
are sufficient to show and explain the group’s
and company’s transactions and disclose with
reasonable accuracy at any time the financial
position of the group and company and enable
them to ensure that the financial statements
comply with the Companies Act 2006.
The directors are responsible for the
maintenance and integrity of the company’s
website. Legislation in the United Kingdom
governing the preparation and dissemination
of financial statements may differ from
legislation in other jurisdictions.
58 Revolution Bars Group plc Annual Report and Accounts 2021
STATEMENT OF
IN RESPECT OF THE ANNUAL REPORT
AND THE FINANCIAL STATEMENTS
The directors are responsible for
preparing the Annual Report and the
financial statements in accordance
with applicable law and regulation.
Directors' confirmations
The directors consider that the
Annual Report and accounts,
taken as a whole, is fair, balanced
and understandable and provides
the information necessary for
shareholders to assess the group’s
and company’s position and
performance, business model
and strategy.
Company law requires the directors to prepare
financial statements for each financial year.
Under that law the directors have prepared
the group and the company financial
statements in accordance with international
accounting standards in conformity with the
requirements of the Companies Act 2006.
Under company law, directors must not
approve the financial statements unless
they are satisfied that they give a true and
fair view of the state of affairs of the group
and company and of the profit or loss of the
group for that period. In preparing the financial
statements, the directors are required to:
• select suitable accounting policies
and then apply them consistently;
• state whether applicable international
accounting standards in conformity with
the requirements of the Companies Act
2006 have been followed, subject to
any material departures disclosed and
explained in the financial statements;
• make judgements and accounting
estimates that are reasonable and
prudent; and
• prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the group
and company will continue in business.
In the case of each director in office at the
date the directors’ report is approved:
• so far as the director is aware, there is
no relevant audit information of which
the group’s and company’s auditors are
unaware; and
•
they have taken all the steps that they
ought to have taken as a director in order
to make themselves aware of any relevant
audit information and to establish that the
group’s and company’s auditors are aware
of that information.
Rob Pitcher
Chief Executive Officer
Danielle Davies
Chief Financial Officer
15 November 2021
Revolution Bars Group plc Annual Report and Accounts 2021 59
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60 Revolution Bars Group plc Annual Report and Accounts 2021
60 Revolution Bars Group plc Annual Report and Accounts 2021
Revolution Bars Group plc Annual Report and Accounts 2021
Revolution Bars Group plc Annual Report and Accounts 2021
61
61
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financial statements
62 Independent Auditors’ Report
70
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flow
Notes to the Consolidated Financial Information
71
72
73
74
100 Company Statement of Financial Position
101 Company Statement of Changes in Equity
101 Company Statement of Cash Flow
102 Notes to the Company Financial Information
105 Glossary
106 Corporate Information
62 Revolution Bars Group plc Annual Report and Accounts 2021
INDEPENDENT AUDITORS’ REPORT TO THE
MEMBERS OF REVOLUTION BARS GROUP PLC
Report on the audit of the financial statements
Opinion
In our opinion, Revolution Bars Group plc’s Group financial statements and Company financial statements (the “financial statements”):
•
•
give a true and fair view of the state of the Group’s and of the Company’s affairs as at 3 July 2021 and of the Group’s loss and
the Group’s and Company’s cash flows for the 53 week period then ended;
have been properly prepared in accordance with international accounting standards in conformity with the requirements
of the Companies Act 2006; and
•
have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report and Accounts (the “Annual Report”), which comprise:
the Consolidated and Company statements of financial position as at 3 July 2021; the Consolidated statement of profit or loss and other
comprehensive income, the Consolidated and Company statements of changes in equity, and the Consolidated and Company statements
of cash flow for the period then ended; and the notes to the financial statements, which include a description of the significant accounting
policies.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities
under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements
in the UK, which includes the FRC’s Ethical Standard, as applicable to listed entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements.
Material uncertainty related to going concern
In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosure made in
note 1 to the Group financial statements and note 1 to the Company financial statements concerning the Group’s and the Company’s ability
to continue as a going concern. The Directors have a reasonable expectation that the Group has sufficient resources to continue in
operational existence for the period of 12 months from the date of approval of these financial statements. The severe disruption to the
Group’s trade since the beginning of the COVID-19 pandemic, has significantly impacted the Group’s performance and financial position.
There is unpredictability in the nature, extent and duration of COVID-19 and the level of operating restrictions that may be imposed during
the next 12 months and beyond. It is uncertain how this will impact the Group’s operational performance, and in particular the level of sales
and EBITDA generated, that will all in turn determine the Group’s ability to comply with the covenant associated with its banking facilities.
In addition, the going concern status of the Company is intrinsically linked to that of the Group. These conditions, along with the other
matters explained in those notes to the financial statements, indicate the existence of a material uncertainty which may cast significant
doubt about the Group’s and the Company’s ability to continue as a going concern. The financial statements do not include the adjustments
that would result if the Group and the Company were unable to continue as a going concern.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation
of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the Group’s and the Company’s ability to continue to adopt the going concern basis
of accounting included:
•
we obtained management’s forecasts and information, which included the ongoing impact of COVID-19;
• we evaluated and assessed the process by which the Group’s future cash flow forecasts were prepared;
• we assessed and challenged management as to the reasonableness of the key assumptions in the going concern model, including
the forecast sales and cost assumptions over at least the next 12 months and how quickly the Group were forecasting to return to
pre COVID-19 sales levels;
• we obtained the terms of the Group’s financing facility and the covenant in place in relation to this facility, and determined that
the Group cash flow forecasts show compliance with all covenant conditions for at least 12 months from the date of the approval
of financial statements;
• we agreed the opening position of the Group’s cash flow forecasts to the September 2021 management accounts. We also agreed
the gross debt and cash per the September 2021 management accounts to the Group’s bank statements; and
• we evaluated the appropriateness of the severe but plausible cash flow forecast used in management’s determination of the going
concern basis of preparation, which included an assessment of any key assumptions underpinning the cash flows throughout the
going concern period.
Revolution Bars Group plc Annual Report and Accounts 2021
63
In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, other than the material uncertainty
identified in note 1 to the Group financial statements and note 1 to the Company financial statements, we have nothing material to add or
draw attention to in relation to the directors’ statement in the financial statements about whether the directors considered it appropriate
to adopt the going concern basis of accounting, or in respect of the directors’ identification in the financial statements of any other material
uncertainties to the Group’s and the Company’s ability to continue to do so over a period of at least twelve months from the date of
approval of the financial statements.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections
of this report.
Our audit approach
Overview
Audit scope
• The Group includes six statutory entities, four of which are included within scope to support the Group and Company audit opinion.
All components are managed by the same finance team and operate entirely within the UK. Full scope audits were performed on four
trading entities within the Group, which together comprise 100 per cent of revenue and adjusted EBITDA. The remaining entities
were not included within Group scope, however statutory audits of these entities are performed.
Key audit matters
• Material uncertainty related to going concern (Group and Company)
•
•
Impairment of property, plant and equipment and right-of-use asset (Group)
Impairment of investments (Company)
• Recognition of supplier rebates (Group)
•
Impact of COVID-19 (Group and Company)
Materiality
• Overall Group materiality: £253,000 (2020: £258,000) based on 2.5% of 4-year average Adjusted EBITDA, on an IFRS 16 basis less
lease payments.
• Overall Company materiality: £180,000 (2020: £155,000) based on 1% of total assets, capped at approximately 70% of the overall
materiality for the Group.
• Performance materiality: £189,750 (Group) and £134,000 (Company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)
identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit;
and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures thereon,
were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
In addition to going concern, described in the Material uncertainty related to going concern section above, we determined the matters
described below to be the key audit matters to be communicated in our report. This is not a complete list of all risks identified by our audit.
The key audit matters below are consistent with last year.
Governance ReportFinancial StatementsStrategic ReportCompany overview 64 Revolution Bars Group plc Annual Report and Accounts 2021
INDEPENDENT AUDITORS’ REPORT TO THE
MEMBERS OF REVOLUTION BARS GROUP PLC
CONTINUED
Our audit approach continued
Key audit matter
How our audit addressed the key audit matter
Impairment of property, plant and equipment and right-of-use asset (Group)
Refer to page 47 of the Audit Committee Report and notes 1 and
11 of the Notes to the Consolidated financial information.
To review the impairment assessment performed by the Directors’
based on a value in use model, we performed the following:
The property, plant and equipment balance of £33,945k and
right-of-use asset balance of £64,044k has been tested for
impairment during the period. Testing has been performed at
a cash generating unit level, which has been assessed as an
individual bar. The impairment tests performed, which are based
on a value in use calculation, identified an impairment charge
of £12,365k, of which £3,273k relates to property, plant and
equipment and £9,092k relates to right-of-use assets, which
has been recognised as an exceptional item during the period.
We focused on this area as the assessment of impairment of
property, plant and equipment and right of use assets requires
the use of estimates in the value in use calculation, including future
forecast cash flows, a discount rate and long-term growth rate.
In addition, the classification of items as exceptional also requires
the use of judgement.
Impairment of investments (Company)
Refer to notes 1 and 5 of Notes to the Company financial information.
The Company holds an investment balance on the Statement
of financial position of £29,650k. This investment is in the trading
subsidiaries of the Group. Management have performed both
a fair value less costs to sell exercise, and a value-in-use
assessment, to calculate the recoverable amount of the
investment. The recoverable amount supports the carrying
value of the investment and therefore management concluded
that no impairment is required.
• we evaluated and assessed the process by which the
Group’s future cash flow forecasts were prepared;
• we assessed the reasonableness of the forecast cash flows,
including assessing the revenue and costs included in those
forecasts, based on our understanding of the Group;
• we tested the Directors’ historical budgeting accuracy by
evaluating whether previous budgets had been achieved.
Where budgets had not been achieved, we understood
the reasons why;
• we tested the Directors’ key assumptions for long-term growth
rates outside the budget period, by comparing them to forecast
inflation rates in the UK;
• we considered the discount rate by forming our own independent
expectation of what we would consider to be an appropriate
range; and
• we considered whether the charge recognised in respect
of impairment should be recognised as an exceptional item,
and, given the magnitude of the charge, concurred that the
presentation as exceptional was appropriate.
To review the impairment assessment performed by the
Directors’, based on value in use and fair value less cost
to sell models, we performed the following:
• we evaluated and assessed the process by which the Group’s
future cash flow forecasts were prepared;
• we assessed the reasonableness of the forecast cash flows,
based on our understanding of the Group;
• we tested the Directors’ key assumptions for long-term growth
rates outside the budget period, by comparing them to forecast
inflation rates in the UK;
• we considered the discount rate by forming our own independent
expectation of what we would consider to be an appropriate
range; and
• we assessed management’s fair value less costs to sell calculation,
based on the recent level of the market capitalisation of the
Group and premiums typically associated with control.
Revolution Bars Group plc Annual Report and Accounts 2021
65
Key audit matter
How our audit addressed the key audit matter
Recognition of supplier rebates - Group
Refer to page 47 of the Audit Committee Report and note 1 of the
Notes to the Consolidated financial information.
To test supplier rebates, we performed the following for a sample
of suppliers:
The Group receives rebates from certain key suppliers. The terms of the
rebates vary by supplier but largely relate to listing or marketing fees,
or volume-based rebates on purchases made throughout the financial
period, with the value being determined by the level of spend. Amounts
recognised as a reduction from costs in the consolidated statement
of profit or loss and other comprehensive income, and amounts
recognised as a receivable in the consolidated statement of financial
position, are material to the financial statements.
We focused on this area because the amount of supplier rebates
income in respect of the period is determined by the terms for
each supplier, which are negotiated separately and, as a result,
differ from one another. This means that the calculation of the
rebates recognised in the consolidated statement of profit or loss
and other comprehensive income, and as a receivable at the
period end, is inherently more prone to error. We also focused
on the existence and accuracy of the supplier rebate income,
and the valuation of period-end receivable, due to the risk
of potential under or overstatement given the manual nature
of the process.
Impact of Covid-19 (Group and Company)
• we recalculated the rebate income recognised within the
consolidated statement of profit and loss and other
comprehensive income in the period, and receivable as at
3 July 2021;
• we compared purchases recorded in the period, and the
contractual rebate arrangements agreed with each supplier,
to the Directors’ calculation of the rebate income;
• we compared the receivable recognised at the prior period end
to the amounts paid in the period ended 3 July 2021 in respect
of those receivables;
• we tested whether rebate arrangements recognised as income
in the period ended 3 July 2021, had been accounted for in the
right period; and
• we agreed amounts paid by suppliers post 3 July 2021 to source
documentation to check amounts were recoverable.
Refer to page 55 of the Directors’ Report and note 1 of the Notes
to the Consolidated financial information.
In response to the key areas identified as being significantly
impacted by COVID-19, we performed the following procedures:
Similar to most businesses in the hospitality sector, COVID-19
has had a significant adverse impact on the performance of the
Group following the enforced closures throughout the period
and subsequent restrictions on re-openings. The key areas of the
financial statements most impacted by the increased uncertainty
are detailed below:
i) The Directors have considered the appropriateness of the going
concern basis of preparation in the Group’s financial statements;
ii) The recoverability of supplier rebates has been considered in light
of the increased uncertainty over supplier liquidity and the ability
of the Group to collect amounts due; and
iii) Impairment of £12,365k have been recorded against the carrying
value of property, plant and equipment and right-of-use assets
as explained in the previous key audit matter.
i) Our work and conclusions in respect of going concern are
set out in the “material uncertainty related to going concern”
section above;
ii) Refer to the third key audit matter above for details of how
we considered the recoverability of receivables; and
iii) Refer to the first key audit matter above for details of how we
considered the impact of COVID-19 in our impairment procedures.
We assessed whether the nature and extent of the disclosure
made by management was sufficiently complete to articulate
the impact of the pandemic on the business and its sector,
supported by the information available to date.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements
as a whole, taking into account the structure of the Group and the Company, the accounting processes and controls, and the industry
in which they operate.
The Group includes six statutory entities, four of which are included within scope to support the Group and Company audit opinion.
All components are managed by the same finance team and operate entirely within the UK. Full scope audits were performed on four
trading entities within the Group, which together comprise 100 per cent of revenue and adjusted EBITDA. The remaining entities were
not included within Group scope, however statutory audits of these entities are performed.
Governance ReportFinancial StatementsStrategic ReportCompany overview 66 Revolution Bars Group plc Annual Report and Accounts 2021
INDEPENDENT AUDITORS’ REPORT TO THE
MEMBERS OF REVOLUTION BARS GROUP PLC
CONTINUED
Our audit approach continued
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent
of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements,
both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall materiality
How we determined it
Rationale for benchmark applied
Financial statements - Group
Financial statements - Company
£253,000 (2020: £258,000).
£180,000 (2020: £155,000).
2.5% of 4-year average Adjusted EBITDA,
on an IFRS 16 basis less lease payments
1% of total assets, capped at approximately
70% of the overall materiality for the Group.
Adjusted EBITDA is the key measure used
both internally by the Board and, we believe,
through reading Directors’ presentations
to analysts, externally by shareholders in
evaluating the performance of the Group.
This measure excludes finance expense,
tax, depreciation, exceptional items, (credits)/
charges from long term incentive plans and
bar opening costs.
Total assets is considered to be appropriate
as it is not a profit oriented Company.
The Company holds investments in
subsidiaries and therefore total assets
is deemed a generally accepted auditing
benchmark. This has been capped at
approximately 70% of overall materiality
for the Group.
For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Group materiality. The range
of materiality allocated across components was £167,000 - £180,000. Certain components were audited to a local statutory audit materiality
that was also less than our overall Group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected
misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the nature
and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample sizes. Our performance
materiality was 75% of overall materiality, amounting to £189,750 for the Group financial statements and £134,000 for the Company financial
statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment and aggregation
risk and the effectiveness of controls - and concluded that an amount at the upper end of our normal range was appropriate.
We agreed with those charged with governance that we would report to them misstatements identified during our audit above £11,000
(Group audit) (2020: £13,000) and £9,000 (Company audit) (2020: £7,750) as well as misstatements below those amounts that, in our view,
warranted reporting for qualitative reasons.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report
thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report,
any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether
the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears
to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures
to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact. We have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors’ Report, we also considered whether the disclosures required by the UK Companies
Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters
as described below.
Revolution Bars Group plc Annual Report and Accounts 2021
67
Strategic Report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors’
Report for the period ended 3 July 2021 is consistent with the financial statements and has been prepared in accordance with applicable
legal requirements.
In light of the knowledge and understanding of the Group and Company and their environment obtained in the course of the audit,
we did not identify any material misstatements in the Strategic report and Directors’ Report.
Corporate governance statement
ISAs (UK) require us to review the directors’ statements in relation to going concern, longer-term viability and that part of the corporate
governance statement relating to the Company’s compliance with the provisions of the UK Corporate Governance Code, which the
Listing Rules of the Financial Conduct Authority specify for review by auditors of premium listed companies. Our additional responsibilities
with respect to the corporate governance statement as other information are described in the Reporting on other information section
of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate governance
statement, included within the Governance Section is materially consistent with the financial statements and our knowledge obtained
during the audit, and, except for the matters reported in the section headed ‘Material uncertainty related to going concern’, we have
nothing material to add or draw attention to in relation to:
• The directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
• The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks
and an explanation of how these are being managed or mitigated;
• The directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern basis
of accounting in preparing them, and their identification of any material uncertainties to the Group’s and Company’s ability to continue
to do so over a period of at least twelve months from the date of approval of the financial statements;
• The directors’ explanation as to their assessment of the Group’s and Company’s prospects, the period this assessment covers and why
the period is appropriate; and
• The directors’ statement as to whether they have a reasonable expectation that the Company will be able to continue in operation and
meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing attention to any necessary
qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term viability of the Group was substantially less in scope than an audit and only
consisted of making inquiries and considering the directors’ process supporting their statement; checking that the statement is in alignment
with the relevant provisions of the UK Corporate Governance Code; and considering whether the statement is consistent with the financial
statements and our knowledge and understanding of the Group and Company and their environment obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial statements and our knowledge obtained during the audit:
• The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and provides
the information necessary for the members to assess the Group’s and Company’s position, performance, business model and strategy;
• The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and
• The section of the Annual Report describing the work of the audit committee.
We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the Company’s compliance
with the Code does not properly disclose a departure from a relevant provision of the Code specified under the Listing Rules for review
by the auditors.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors’ responsibilities in respect of the Annual Report and the financial statements,
the directors are responsible for the preparation of the financial statements in accordance with the applicable framework and for being
satisfied that they give a true and fair view. The directors are also responsible for such internal control as they determine is necessary
to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the Company’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
the directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.
Governance ReportFinancial StatementsStrategic ReportCompany overview 68 Revolution Bars Group plc Annual Report and Accounts 2021
INDEPENDENT AUDITORS’ REPORT TO THE
MEMBERS OF REVOLUTION BARS GROUP PLC
CONTINUED
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with laws and regulations
related to UK tax legislation, employment legislation and health and safety laws, and we considered the extent to which non-compliance
might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the
financial statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent
manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related
to posting inappropriate journal entries to increase revenue or reduce expenditure, and management bias in accounting estimates.
Audit procedures performed by the engagement team included:
• discussions with management including consideration of known or suspected instances of non-compliance with laws and regulation
and fraud;
• challenging assumptions and judgements made by management in their significant accounting estimates, in particular in relation
to recoverability of property, plant and equipment and right-of-use asset (see related key audit matter); and
•
identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance
with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of
not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques.
However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek
to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw
a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with Chapter 3
of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our
prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from branches
not visited by us; or
• certain disclosures of directors’ remuneration specified by law are not made; or
•
the Company financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Randal Casson (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Manchester
15 November 2021
Revolution Bars Group plc Annual Report and Accounts 2021 69
Governance ReportFinancial StatementsStrategic ReportCompany overview 70 Revolution Bars Group plc Annual Report and Accounts 2021
CONSOLIDATED STATEMENT OF PROFIT OR
LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE 53 WEEKS ENDED 3 JULY 2021
Revenue
Cost of sales
Gross profit
Operating expenses:
– operating expenses, excluding exceptional items
– exceptional items
– grant income
Total operating expenses
Operating loss
Finance expense
Exceptional finance income
Loss before taxation
Income tax
Loss and total comprehensive expense for the period
Loss per share:
– basic and diluted (pence)
Dividend declared per share (pence)
Note
2
2
3
4
5
8
8
9
10
53 weeks
ended
3 July 2021
£’000
52 weeks
ended
27 June 2020
£’000
39,417
(11,352)
110,074
(26,571)
28,065
83,503
(47,217)
(5,361)
3,357
(88,388)
(27,770)
–
(49,221)
(116,158)
(21,156)
(5,140)
–
(26,296)
–
(32,655)
(4,934)
5,869
(31,720)
(3,461)
(26,296)
(35,181)
(21.2)
–
(70.3)
–
There were no items of other comprehensive income and therefore a separate statement of other comprehensive income is not presented.
Revolution Bars Group plc Annual Report and Accounts 2021
71
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
AT 3 JULY 2021
Assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Current assets
Inventories
Trade and other receivables
Tax receivable
Cash and cash equivalents
Total assets
Liabilities
Current liabilities
Trade and other payables
Provisions
Lease liabilities
Net current liabilities
Non-current liabilities
Lease liabilities
Interest-bearing loans and borrowings
Provisions
Total liabilities
Net liabilities
Equity attributable to equity holders of the parent
Share capital
Share premium
Merger reserve
Accumulated losses
Total equity
3 July
2021
£’000
27 June
2020
£’000
Note
11
11
12
13
14
15
16
19
17
17
18
19
21
33,945
64,044
24
41,222
70,689
20
98,013
111,931
2,956
5,218
–
12,118
20,292
3,593
3,429
50
2,502
9,574
118,305
121,505
(20,361)
(842)
(5,143)
(15,795)
–
(10,203)
(26,346)
(25,998)
(6,054)
(16,424)
(100,034)
(15,751)
(1,404)
(102,960)
(24,500)
(1,019)
(117,189)
(128,479)
(143,535)
(154,477)
(25,230)
(32,972)
230
33,794
11,645
(70,899)
50
–
11,645
(44,667)
(25,230)
(32,972)
These financial statements were approved by the Board of Directors on 15 November 2021 and signed on its behalf by
Danielle Davies
Director
Registered number: 08838504
Governance ReportFinancial StatementsStrategic ReportCompany overview
72 Revolution Bars Group plc Annual Report and Accounts 2021
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
FOR THE 53 WEEKS ENDED 3 JULY 2021
At 29 June 2019
Loss and total comprehensive expense for the period
Charge arising from long-term incentive plans
At 27 June 2020
Loss and total comprehensive expense for the period
Fundraising (note 21)
Charge arising from long-term incentive plans (note 22)
At 3 July 2021
Share
capital
£’000
Share
premium
£’000
50
–
–
50
–
180
–
230
–
–
–
–
–
33,794
–
33,794
Reserves
Merger
reserve
£’000
11,645
–
–
11,645
–
–
–
11,645
Accumulated
losses
£’000
(9,528)
(35,181)
42
(44,667)
(26,296)
–
64
Total
equity
£’000
2,167
(35,181)
42
(32,972)
(26,296)
33,974
64
(70,899)
(25,230)
Revolution Bars Group plc Annual Report and Accounts 2021
73
CONSOLIDATED STATEMENT
OF CASH FLOW
FOR THE 53 WEEKS ENDED 3 JULY 2021
Cash flow from operating activities
Loss before tax from operations
Adjustments for:
Net finance expense
Exceptional finance income
Exceptional gain on disposal
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Impairment of property, plant and equipment
Impairment of right-of-use assets
Lease modification
Working Capital and Other movements
Net cash flow (used in)/generated from operating activities
Cash flow from investing activities
Purchase of intangible assets
Purchase of property, plant and equipment
Net cash flow used in investing activities
Cash flow from financing activities
Net proceeds from equity fundraising
Interest paid
Lease surrender premiums paid
Principal element of lease payments
Interest element of lease payments
Repayment of borrowings
Drawdown of borrowings
Net cash outflow generated from/(used in) financing activities
Net increase/(decrease) in cash and cash equivalents
Opening cash and cash equivalents
Closing cash and cash equivalents
Reconciliation of net bank debt
Net increase/(decrease) in cash and cash equivalents
Cash inflow from increase in borrowings
Cash outflow from repayment of borrowings
Opening net bank debt
Closing net bank debt
53 weeks
ended
3 July 2021
£’000
52 weeks
ended
27 June 2020
£’000
Note
(26,296)
(31,720)
8
8
3
11
11
3
3
3
25
12
11
21
8
17
17
15
5,140
–
(8,388)
6,045
5,770
3,273
8,315
(28)
3,881
(2,288)
(5)
(2,038)
(2,043)
33,974
(1,133)
(1,700)
(4,438)
(4,007)
(52,749)
44,000
13,947
9,616
2,502
12,118
4,934
(5,869)
–
7,397
7,215
8,727
19,566
(897)
(2,883)
6,470
(12)
(4,213)
(4,225)
–
(599)
(1,369)
(3,067)
(4,335)
(12,000)
19,000
(2,370)
(125)
2,627
2,502
9,616
(44,000)
52,749
(125)
(19,000)
12,000
(21,998)
(14,873)
(3,633)
(21,998)
Governance ReportFinancial StatementsStrategic ReportCompany overview
74 Revolution Bars Group plc Annual Report and Accounts 2021
NOTES TO THE CONSOLIDATED
FINANCIAL INFORMATION
FOR THE 53 WEEKS ENDED 3 JULY 2021
1. General information
Corporate information
The consolidated financial statements of Revolution Bars Group plc for the 53 weeks ended 3 July 2021 were authorised for issue by the
Board of Directors on 15 November 2021. Revolution Bars Group plc is a public limited company incorporated and domiciled in the UK under
the Companies Act 2006 and is registered in England and Wales. The Company is limited by shares on the London Stock Exchange. In the
reporting period and effective from 27 July 2020, the Company delisted from the premium segment of the Main Market and its shares were
admitted to the AIM sub-market.
The registered number of the Group is 08838504 and its registered office is 21 Old Street, Ashton-under-Lyne, Tameside, England, OL6 6LA.
Statement of compliance
The Group’s financial statements have been prepared in accordance with International Accounting Standards in conformity with the
requirements of the Companies Act 2006 (“IFRS”), and they apply to the financial statements of the Group for the 53 weeks ended
3 July 2021 (prior period 52 weeks ended 27 June 2020).
Basis of preparation
The accounting period runs to the Saturday falling nearest to 30 June each year and therefore normally comprises a 52-week period but
with a 53-week period arising approximately at five-year intervals. The period ended 3 July 2021 is a 53-week period; the period ended
27 June 2020 was a 52-week period. The consolidated financial statements have been prepared under the historical cost convention in
accordance with those parts of the Companies Act 2006 applicable to companies reporting under International Financial Reporting Standards
(“IFRS”). References to 2021 or FY21 relate to the 53-week period ended 3 July 2021 and references to 2020 or FY20 relate to the 52-week
period ended 27 June 2020 unless otherwise stated. The consolidated financial statements are presented in Pounds Sterling with values
rounded to the nearest thousand, except where otherwise indicated. These policies have been applied consistently unless otherwise stated.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of Revolution Bars Group plc and its subsidiaries.
The financial statements of subsidiaries are prepared for the same reporting period as the Parent Company with adjustments made
to their financial statements to bring their accounting policies in line with those used by the Group.
The financial results of subsidiaries are included in the consolidated financial information from the date that control commences until the date
that control ceases. The consolidated financial information presents the results of the companies within the same group. Intra-group balances
and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated
financial information. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence
of impairment.
Judgements made by the Directors in the application of these accounting policies that have a significant effect on the financial statements
and estimates with a significant risk of material adjustment in the next period are discussed below.
Going concern
Going concern
The Directors have adopted the going concern basis in preparing these financial statements after careful assessment of identified principal
risks and, in particular, the possible adverse impact on financial performance, specifically on revenue and cash flows, as a result of restrictions
imposed by the UK Government and the devolved authorities in response to COVID. The going concern status of the Company and subsidiaries
is intrinsically linked to that of the Group.
Liquidity
At the end of the reporting period, the Group had net bank debt of £3.6 million (2020: £22.0 million). In FY21, the Group took out three
separate Coronavirus Large Business Interruption Loan Scheme (“CLBILS”) term loans to a sum of £20.0 million, of which £15.8 million was
still outstanding as at year-end. The Group maintains a £17.3 million Revolving Credit Facility (“RCF”) of which no amounts were drawn down
as at year-end.
The RCF reduced from £21.0 million in June 2021, to £17.3 million following £3.7 million of amortisation. The RCF is due to amortise by a further
£1.0 million to £16.3 million at the end of June 2022, and has been extended to 30 June 2023 in November 2021. The interest rate on the RCF
has been increased by 1.2% with a further up-to 1% chargeable if the RCF is drawn to within £5.0 million of total limits.
Following the refinancing in November 2021, a new deleveraging method has been agreed with NatWest based on overperformance compared
to the severe but plausible downside case. This protects the Group with sufficient liquidity in the event of further Government restrictions
but also allows the Group to move to a more normal debt structure when over-delivering against the severe but plausible downside case.
This will be tested 2 July 2022, and the overperformance between the severe but plausible downside case and actualised FY22 will be shared
between the Group and repayment of bank facilities to NatWest, pro-rata between the RCF and CLBILS (the “facilities”). The first £3.0 million of
overperformance will be retained by the Company to provide an additional liquidity buffer, with any overperformance thereafter shared 50:50.
Revolution Bars Group plc Annual Report and Accounts 2021
75
In FY21, the Group completed two equity fundraises to support liquidity. The first completed on 27 July 2020 for gross £15.0 million,
net £14.1 million, and all funds were fully received by 3 August 2020 and used to repay the remaining outstanding balance of the RCF.
A second equity fundraising was completed on 15 June 2021 for gross £21.0 million, net £19.9 million, and all funds were fully received
by 17 June 2021. The second fundraising was also used to repay £11.0 million of RCF, whilst retaining sufficient funds to allow the Group
to start an enhanced refurbishment programme of its bars, and also be in a position to take advantage of any good acquisition and
expansion opportunities.
As at 15 November 2021, the above facilities expire and amortise as follows:
Facility
RCF
Commitment
£17.3 million
CLBILS
£15.3 million
Expiry
Amortisation
30 June 2023
£1.0 million on 30 June 2022 and 30 June 2023
Overperformance deleverage on 2 July 20221
5 July 2023 and 9 May
20242
£1.0 million per annum in equal monthly instalments
Overperformance deleverage on 2 July 20221
1
Per above, total facilities are due to amortise under an overperformance deleverage agreement to be tested on 2 July 2022.
2 The original £16.5 million CLBILS expires 5 July 2023, and the £3.5 million second CLBILS expires 9 May 2024.
In accordance with these arrangements and subject to compliance with financial covenants, the Group will have committed funding
facilities available during the going concern assessment period as follows:
31 December 2021
30 June 2022
31 December 2022
30 June 2023
RCF
£m
17.3
16.3
16.31
15.31
CLBILS
£m
15.3
14.8
14.31
13.81
Total
£m
32.6
31.1
30.61
29.11
1
Facilities are due to deleverage after 30 June 2022 under the overperformance deleverage agreement detailed above, meaning the facilities stated will reduce further
at this point provided the severe but plausible downside case net debt overperformed in FY22 by at least £3.0 million.
Current Net bank debt and available liquidity
As at 15 November 2021, the Group’s net bank cash position was £4.6 million, and therefore the Group has available liquidity
of £37.2 million.
Covenants
The facilities are subject to one financial covenant only, which is that the Group is required to maintain minimum liquidity headroom between
its net bank debt and the committed facilities on a six-month look forward basis. The required headroom under the covenant varies on
a monthly basis, and in November 2021 it was agreed with NatWest that the minimum liquidity covenant would be adjusted to reflect the
level of expected headroom, and bring it in line with normal banking requirements.
Significant judgements and base case
The financing arrangements referred to in this going concern section are expected to provide a sufficient platform for the business to meet
the trading uncertainty that lies ahead as the Group trades through winter with the uncertainty of further potential restrictions and lockdowns
imposed by the UK Government. During the entirety of FY21 the Group has either been subject to forced closure or traded under strict
restrictions, which has severely impacted its performance. Although the Group is hopeful of the continued normality in trading in England,
and continues to monitor the devolved nations carefully, it is not clear what level of trade may be possible should the UK Government impose
further restrictions.
The level of sales that the Group generates drives EBITDA and cash generation, which in turn impacts the level of liquidity required and
compliance with the covenant test. In reaching their assessment that the financing arrangements are expected to be sufficient for the
business, the Directors have reviewed a base case forecast scenario which assumes flat performance to the last 12 months before COVID
began, with a softer December to reflect the potential for some level of restrictions, or reduced demand, across the UK. Capital expenditure
is included in line with that communicated during the second equity fundraise, which retains our refurbishment and expansion programme,
which was the purpose of the second equity fundraise. Under the base case forecast, there is no forecast breach of the banking covenant.
The forecast average amount of headroom for net bank debt relative to the minimum liquidity covenant between December 2021 and
November 2022 is £17.9 million with the lowest point of £11.6 million in October 2022.
Governance ReportFinancial StatementsStrategic ReportCompany overview 76 Revolution Bars Group plc Annual Report and Accounts 2021
NOTES TO THE CONSOLIDATED
FINANCIAL INFORMATION
FOR THE 53 WEEKS ENDED 3 JULY 2021
1. General information continued
Going concern continued
Severe but plausible downside scenario
The Directors have also reviewed a severe but plausible downside case which takes the base case and assumes a full lockdown in November
and January to April inclusive, and thus no trade in these months. December again remains softened to reflect the potential for restrictions,
or reduced demand, and it is assumed the remaining months will be in line with the base case. No further Government assistance is assumed,
and Capex remains at the same level as base case. This remains an area of flexibility in the event of a longer lockdown, whereby the
programme, if necessary, could be adjusted to enhance liquidity in the business.
The severe but plausible downside case shows no forecast breach of the banking covenant but, as would be expected, the forecast
average amount of net bank debt headroom relative to the minimum liquidity covenant between December 2021 and November 2022
is lower at £5.0 million with the lowest point of £0.9 million in April 2022.
Whilst there are currently no indications that further lockdowns and restrictions above and beyond those included in the severe but plausible
downside case would occur, the Directors note the unprecedented decisions that have previously been taken and could again be imposed
by the UK Government. However, the Directors also believe that if severe operating restrictions or lockdowns occurred above those already
assumed the financial effects could potentially be mitigated wholly or partially by a number of factors that are not reflected in the severe
but plausible downside case, but which are not all wholly within the control of the Directors, including reintroduction of the Coronavirus Job
Retention Scheme, further rent mitigation, receipt of local authority grants as these are made available but which have not been included
in the Group’s forecasts, and any extension to business rates relief.
The low level of liquidity headroom relative to the minimum liquidity covenant in the severe but plausible downside case, and the material
uncertainty caused by COVID coupled with forecasting difficulties as a result of constantly changing operating restrictions means that the
Group cannot be assured that it will not breach the minimum liquidity covenant. A breach of covenant would require the bank to grant a waiver
or for the Group to renegotiate its banking facilities or raise funds from other sources, none of which is entirely within the Group’s control.
A breach of the covenant would also result in the reclassification of £15.8 million of non-current borrowings to current borrowings as at the
date of the consolidation statement of financial position. The Directors have assessed, however, that given a strong underlying business,
particularly post lease surrenders of under-performing bars and the CVA undertaken during 2020, the Group’s existing relationships with
its main creditors, its success in recent years in obtaining covenant waivers and renegotiating its banking facilities and recent equity
fundraisings, that a request for a waiver of a covenant breach or renegotiation of the banking facilities would be successful.
Going concern statement
Despite a return to normal trading in England since July 2021, the severe disruption to the Group’s trade prior to that since March 2020
caused by COVID, and the resultant and frequently changing operating restrictions imposed by the UK Government and the devolved
authorities means that there is a material uncertainty over the going concern of the Group. This uncertainty exists because of the
unpredictability of the nature, extent and duration of COVID, and the possibility of further restrictions or lockdowns imposed by the
Government, and how this will impact the Group’s operational performance and in particular the level of sales and EBITDA generated
that will in turn determine the Group’s covenant compliance.
Notwithstanding the material uncertainty, after due consideration the Directors have a reasonable expectation that the Group and the
Company have sufficient resources to continue in operational existence for the period of 12 months from the date of approval of these
financial statements. Accordingly, the financial statements continue to be prepared on the going concern basis. However, the impact
of possible COVID restrictions on our trading indicates the existence of a material uncertainty which may cast significant doubt over the
ability of the Group and Company to continue as a going concern. The financial statements do not contain the adjustments that would
arise if the Group (and the Company) were unable to continue as a going concern.
(a) Accounting policies
Revenue recognition
Revenue is the fair value of goods and services sold to third parties as part of the Group’s trading activities, net of discounts.
Revenue primarily arises from the sale of food and beverage in the Group’s trading outlet and is recognised at the point of delivery
to the customer.
Revenue from the sale of discount cards is recognised consistent with customers’ usage of the cards. Party deposits are held as deferred
revenue until the date of event, at what point it is recognised as revenue.
Expenses
Cost of sales
Cost of sales principally comprises the purchase cost of drinks and food sold.
Supplier rebates
Supplier rebates are recognised as a deduction from cost of sales on an accruals basis using the contractual terms and volumes supplied
up to the statement of financial position date for each relevant supplier contract. Where rebates are conditional on long-term minimum
volumes, management judgement is applied as to the achievement of those volumes. Accrued rebates receivable as at the date of the
statement of financial position are included within trade and other receivables. Where listing fees received are conditional on a contractual
term, the amounts are recognised over that term.
Revolution Bars Group plc Annual Report and Accounts 2021
77
Financing income and expenses
• Financing expenses comprise interest payable on borrowings and other finance charges.
•
Interest income and interest payable are recognised in the consolidated statement of profit or loss and other comprehensive income
on an accruals basis, using the effective interest method.
Taxation
Tax on the profit or loss for the period comprises current and deferred tax. Tax is recognised in the consolidated statement of profit
or loss and other comprehensive income except to the extent that it relates to items recognised directly in equity, in which case the tax
is also recognised directly in equity.
Current tax is the expected tax payable or credit receivable on the taxable income or loss for the period using tax rates enacted
or substantively enacted at the statement of financial position date, and any adjustment to tax payable in respect of previous periods.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill;
the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination;
and differences relating to investments in subsidiaries to the extent they will probably not reverse in the foreseeable future. The amount
of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities using
tax rates enacted or substantively enacted at the statement of financial position date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which temporary
differences can be utilised.
Operating segments
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to transactions with any of the Group’s other components.
Segment information is based on internal reports regularly reviewed by the Group’s Chief Operating Decision Maker (“CODM”) in order
to assess each segment’s performance and to allocate resources to them. The CODM is the Board (see note 2).
Share-based payments
The Group issues equity-settled share-based payments and restricted share awards to certain employees. Equity-settled share-based
payments are revalued at each reporting period. The fair value determined at the grant date is expensed on a straight-line basis over the
vesting period based on the Group’s estimated number of shares that will vest. This is recognised as an employee expense or credit with
a corresponding increase or decrease in equity. Fair value is evaluated using the Monte Carlo model for options subject to market-based
performance conditions and by using the Black-Scholes model for options subject to any other performance condition.
Exceptional items
Items that are unusual or infrequent in nature and material in size are disclosed separately in the consolidated statement of profit or loss
and other comprehensive income. The separate reporting of these items helps, in the opinion of the Directors, to provide a more accurate
indication of the Group’s underlying business performance. Exceptional items typically include impairments of property, plant and equipment
and right-of-use assets, venue closure costs, significant contract termination costs and costs associated with major one-off projects. Charges
related to share-based payment arrangements are not treated as exceptional but are excluded from the calculation of adjusted EBITDA due
to significant variations in the annual charges/credits historically arising from senior employees with significant options leaving the business
and changes to the probability of share options vesting.
Bar opening costs
Bar opening costs refer to revenue costs incurred in preparing a new bar for opening and include all costs incurred before opening and
preparing for launch, even if the bar does not open in the reporting period. These costs are excluded from the calculation of adjusted EBITDA.
The separate reporting of these items helps provide a more accurate indication of the Group’s underlying business performance, which the
Directors believe would otherwise be distorted due to the irregular timing of the opening of new bars.
Non-derivative financial instruments
Non-derivative financial instruments comprise investments in equity securities, trade and other receivables, cash and cash equivalents,
loans and borrowings and trade and other payables.
Trade and other receivables
Trade and other receivables are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost
using the effective interest method, less any impairment losses. Receivables also include credit and debit card sales which have not
reached the bank at the reporting date.
Governance ReportFinancial StatementsStrategic ReportCompany overview 78 Revolution Bars Group plc Annual Report and Accounts 2021
NOTES TO THE CONSOLIDATED
FINANCIAL INFORMATION CONTINUED
FOR THE 53 WEEKS ENDED 3 JULY 2021
1. General information continued
(a) Accounting policies continued
Trade and other payables
Trade and other payables are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using
the effective interest method.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances at bank or held in the business and on-call deposits. Bank overdrafts repayable on
demand and forming an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the
purpose of the statement of cash flow only.
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition,
interest-bearing borrowings are stated at amortised cost using the effective interest method.
Share capital
Ordinary Shares are classified as equity. Incremental costs directly attributable to the issue of Ordinary Shares are recognised
as a deduction from equity net of any related tax.
Share premium
Share premium is the amount subscribed for share capital in excess of nominal value.
Merger reserve
The merger reserve arose due to the return of share capital related to the sale of a subsidiary business on 22 February 2014.
Property, plant and equipment
Property, plant and equipment are stated at historical purchase cost less accumulated depreciation and any accumulated impairment losses.
Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use.
Depreciation is charged to write-off the cost of assets over their estimated useful lives on the following bases:
Short leasehold premises and improvements
– Lower of 25 years or the unexpired term of the leasehold agreement on a straight-line
basis for new bars, and the lower of 10 years or the unexpired term of the leasehold
agreement on a straight-line basis for refurbishments at existing bars
IT equipment and office furniture
Fixtures and fittings in licensed premises
– 3 to 4 years on a straight-line basis
– 5 to 10 years on a straight-line basis
Freehold land is not depreciated.
Depreciation policies and useful economic lives are reviewed at each statement of financial position date.
Short leasehold costs include directly attributable employment costs and related personal expenses of individuals employed to manage
or implement the Company’s capital development programme.
Leases
Where the Company is a lessee, a right-of-use asset and lease liability are both recognised at the outset of the lease. Each lease liability
is initially measured at the present value of the remaining lease payment obligations taking account of the likelihood of lease extension
or break options being exercised. Each lease liability is subsequently adjusted to reflect imputed interest, payments made to the lessor
and any modifications to the lease. The right-of-use asset is initially measured at cost, which comprises the amount of the lease liability,
plus lease payments made at or before the commencement date adjusted by the amount of any prepaid or accrued lease payments,
less any incentives received to enter in to the lease, plus any initial direct costs incurred by the Group to execute the lease, and less any
onerous lease provision. The right-of-use asset is depreciated in accordance with the Group’s accounting policy on property, plant and
equipment. The amount charged to the income statement comprises the depreciation of the right-of-use asset and the imputed interest
on the lease liability.
The Company has utilised the practical expedient to not assess whether rent waivers agreed as a result of COVID-19 are lease modifications.
Impairment of tangible fixed assets and right-of-use assets
At each statement of financial position date, the Group reviews the carrying amounts of its tangible assets to determine whether there
is any indication of an impairment loss. The carrying amount of assets that do not directly generate cash flows are allocated to other cash
generating units (“CGUs”) to which it is related as part of the impairment testing of those CGUs.
Impairment testing is performed by reference to establishing the recoverable amount of an asset. The recoverable amount is the higher
of fair value less costs to sell, and value in use. In assessing value in use, estimated future cash flows are discounted to their present value
using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the
estimate of future cash flows have not been adjusted. If the recoverable amount of an asset (or CGU) is estimated to be less than the asset’s
carrying amount, the carrying amount is reduced to the recoverable amount. An impairment loss is recognised as an expense immediately.
Revolution Bars Group plc Annual Report and Accounts 2021
79
Intangible assets
Intangible assets comprise capitalised trademark licences and are recognised at cost. They have a finite useful life and are carried
at cost less accumulated amortisation. Amortisation is calculated on a straight-line basis to allocate the cost of intangible assets over
their estimated useful life of ten years.
Inventories
Inventories are stated at the lower of cost and net realisable value, with due allowance being made for obsolete or slow-moving items.
Cost is based on the first-in first-out principle and includes expenditure incurred in acquiring the inventories and other costs in bringing
them to their existing location and condition. Cost is stated net of supplier volume rebates. Inventories include a value for small value sundry
consumable items associated with delivering product to customers. The most significant of these consumables are glassware, cutlery and
crockery, sundry bar equipment and product garnishes. The initial cost of these items on opening a new bar is attributed to inventory but
any ongoing expenditure to replace or replenish such items is expensed.
Net realisable value is the estimated selling price less further costs expected to be incurred prior to sale or disposal.
Employee benefits
Defined contribution pension plans
A defined contribution pension plan is a post-employment benefit plan towards which the Group pays fixed contributions to a separate
entity as part of an employee’s contractual arrangement whilst they remain in the Group’s employment. The Group has no legal or constructive
obligation to pay further amounts to such pension plans. Obligations for contributions to defined contribution pension plans are recognised
as an expense in the consolidated statement of profit or loss and other comprehensive income in the periods during which services are
rendered by employees.
Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.
A liability is recognised for amounts expected to be paid under short-term cash bonus and profit-sharing plans if the Group has a present
legal or constructive obligation to pay such amounts as a result of past service provided by the employee and the obligation can be
estimated reliably.
Provisions
A provision is recognised in the statement of financial position when the Group has a present legal or constructive obligation as a result
of a past event which can be reliably measured and it is probable that an outflow of economic benefits will be required to settle the obligation.
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects risks specific to the liability.
The Group provides for those costs that are considered to be unavoidable prior to lease termination; dilapidation costs are provided
for against all leasehold properties across the entire estate.
COVID-19 accounting policies
As has been the case for all hospitality businesses during the COVID-19 pandemic, the Group’s trading venues were subject to various
UK Government enforced lockdowns since 20 March 2020, finally allowing outdoor trading to restart from 12 April 2021, indoor trading from
17 May 2021, and the relief of further restrictions from 19 July 2021. During the financial year, the Group has been unable to trade for periods
of time, and been imposed under significant restrictions under others. Therefore, the Group has had the ability to generate varying levels
of income. Recognising this, the UK Government has made available certain reliefs and support schemes from which the Company has been
able to benefit. Given the temporary nature of these reliefs and their material impact on the reported performance of the Company, relevant
accounting policies are set out below.
The Directors have considered whether the collective benefit of Government support to counter the impact of ‘COVID-19’ should be
reported as an exceptional credit but given the severe impact of the pandemic on the underlying trading numbers and that the reliefs were
introduced by Government to mitigate the trading impact, the Directors do not believe that to do so would be meaningful. Support during
the COVID lockdown has come in many different forms and from a number of stakeholders, including suppliers and landlords, not just
Government, and therefore, given that all of that support is inextricably linked to the prevailing imposed lockdown and operating restrictions
the Directors are of the opinion that to identify all forms of support is impractical and not meaningful. However, where notes to the financial
statements lend themselves to cross-referencing and quantifying external support such as the disclosures of payroll and rent information,
additional information has been given.
Furlough and the Coronavirus Job Retention Scheme (CJRS)
The Company has utilised the CJRS extensively throughout the period of lockdown. The scheme has allowed a maximum of 80% of the
normal earnings of individuals who have been furloughed up to a maximum cap of £2,500 per month per employee, with periods of reduction
until it is phased out. The Company pays the furlough wages and then lodges a claim to Government for reimbursement. The claims are made
in line with changing Government guidance. The Government claim is accounted for on an accruals basis and, therefore in the consolidated
statement of profit or loss, matches the furlough wages. Unpaid claims to Government are included in Trade and other receivables in the
consolidated statement of financial position. The claim is netted against the corresponding payroll expense included in operating costs.
Rates holiday
The Government has provided relief for general rates by way of a rates holiday for hospitality businesses for the 2020/21 fiscal year;
accordingly, no rates charges have been recorded for FY21 and charges will not resume until the second quarter of FY22 where rates
will be discounted at 66% for the remainder of 2021/22 to a cap of £2.0 million for the Group.
Governance ReportFinancial StatementsStrategic ReportCompany overview 80 Revolution Bars Group plc Annual Report and Accounts 2021
NOTES TO THE CONSOLIDATED
FINANCIAL INFORMATION CONTINUED
FOR THE 53 WEEKS ENDED 3 JULY 2021
1. General information continued
(a) Accounting policies continued
Government grants
The Government have provided various Local Authority grants to support the hospitality industry, particularly for periods of closure or severe
restrictions. There have been various rules around claiming these, with the values predominantly based on the rateable value of the properties.
This income has been recognised as Grant Income within operating profit on a cash basis as it relates to the period that it is received.
Rent concessions
Given the level of uncertainty around trading and financing arrangements, the Group invested significant time agreeing rental concessions
and re-gears that would allow both the Group and landlord to proceed through the tougher trading conditions.
Only those rental concessions agreed with landlords prior to the end of the FY21 reporting period and relating to FY21, or FY20 where they
were not agreed before the end of FY20, have been accounted for within the reporting period. Rent-free periods or reduced rental periods
that are in effect a gift from the landlord with nothing given in exchange are treated as an immediate relief of rent under IFRS 16 and taken
as a credit to the income statement. However, where the rental concession is in exchange for an extension to the term of a lease or for some
other structural change to the terms of the lease, it is treated as a lease modification and the right-of-use asset and lease liability are modified
for the new terms.
(b) Critical judgements and key sources of estimation and uncertainty
The preparation of consolidated financial information in conformity with IFRS requires management to make judgements, estimates
and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.
Actual results in due course may differ from these estimates.
Estimates and underlying assumptions are reviewed on an on-going basis and are based on historical experience and other factors including
expectations of future events that are believed to be reasonable under the circumstances. Revisions to accounting estimates are recognised
in the period in which the revision takes place and in any future periods affected.
The key assumptions concerning the future and other key sources of estimation and uncertainty at the date of the statement of financial
position that have a significant risk of causing material adjustments to the carrying amounts of assets and liabilities within the next financial
period are set out below.
The Directors consider the principal judgements made in the Financial Statements to be:
Judgements made in assessing the impact of COVID-19 on the financial statements
We have exercised judgement in evaluating the impact of COVID-19 on the financial statements. The areas identified are as follows:
• Going concern, where assumptions have been made as to the likelihood of further spikes in COVID-19 and the ongoing operating
restrictions impacting all hospitality businesses;
•
•
Impact on future cash flows included within the value in use calculations used in impairment assessments;
IFRS 9, the increased Expected Credit Loss rate of 2% remains to reflect the enhanced risk of supplier failure (collecting rebates).
Exceptional items, bar opening costs and share-based payments: adjusted profitability measures
Management uses a range of measures to monitor and assess the Group’s financial performance. These measures include a combination
of statutory measures calculated in accordance with IFRS and alternative performance measures (“APMs”). These APMs include the
following adjusted measures of profitability:
• adjusted operating profit before exceptional items, bar opening costs and share-based payments;
• adjusted profit before tax before exceptional items, bar opening costs and share-based payments;
• adjusted earnings before interest, tax, depreciation and amortisation before exceptional items, bar opening costs and share-based
payments (“adjusted EBITDA”);
• converting profit measures back to IAS 17 from IFRS 16 through the inclusion of rental expense and other relevant adjustments; and
• adjusted basic earnings per share before exceptional items, bar opening costs and share-based payments.
The Directors believe that these measures provide management and investors with useful additional information on the Group’s
performance. The above measures represent the equivalent IFRS measures but are adjusted to exclude items that the Directors
consider may prevent a relevant comparison of the Group’s performance both from one reporting period to another and with other
similar businesses.
These items are not defined under IFRS and as such there is judgement applied in the classification of items as exceptional. Exceptional items
are classified as those which are separately identifiable by virtue of their size, nature or expected frequency and therefore warrant separate
presentation. Bar opening costs are another item that the Directors consider should be presented separately to allow a better understanding
of the underlying performance of the business. Presentation of these measures is not intended to be a substitute for or to promote them above
statutory measures.
Revolution Bars Group plc Annual Report and Accounts 2021
81
The Group’s consolidated statement of profit or loss and other comprehensive income provides a reconciliation of the adjusted profitability
measures, excluding exceptional and other non-underlying items to the equivalent unadjusted IFRS measures.
Bar opening costs comprise non-recurring bar opening costs, which are costs incurred between a bar being acquired and commencement
of trading. It predominantly includes property overheads and staff recruitment, payroll and training costs.
Exceptional items and bar opening costs are further detailed in note 3 to the financial statements.
Items considered to be exceptional or bar opening costs that are separately identified in order to aid comparability may include the following:
• costs incurred in association with business combinations and other transactions, such as legal and professional fees and stamp duty;
• costs incurred in respect of termination of Director’s contracts; and
•
impairment charges in respect of tangible assets as a result of bar underperformances.
Charges/credits relating to share-based payments arising from the Group’s long-term incentive schemes are not considered to be exceptional
but are separately identified due to the scope for significant variation in charges/credits due to changes in senior management and the
probability of share options vesting amongst other factors.
Capitalisation of employment costs
The Company capitalises employment costs and related personal expenses of individuals whose job roles are fundamentally associated
with managing or implementing the Company’s capital development programme. Judgement is therefore applied in determining the element
of internal employment costs which are directly attributable to capital projects. Where such an individual undertakes non-capital expenditure
related activities as part of their job role then that proportion of their cost is not capitalised unless the non-capital expenditure related activities
are incidental to their role.
The Directors consider the principal estimates made in the Financial Statements to be:
Recoverable amount of property, plant and equipment and right-of-use assets (note 11)
Assets that are subject to depreciation are tested for impairment whenever events or changes in circumstance indicate that the carrying
amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its estimated
recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. In assessing value in use, the expected
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the rate
of return expected on an investment of equivalent risk. For an asset that does not generate an independent income stream, the recoverable
amount is determined in conjunction with the cash generating units (“CGU”) to which the asset relates.
Determining value in use requires a series of estimates to be made including an appropriate discount rate to calculate the present value,
an estimate of the cash flows expected to arise from the CGU (including an assessment of revenue and cost base growth) and a long-term
growth rate. For further details of the sensitivity of the calculation of impairment provisions to these key assumptions, see note 11.
The key assumptions in the value in use calculation are the applicable discount rate of 9.0 per cent (2020: 8.2 per cent) and long-term
revenue and cost base growth rates of 1 per cent (2020: 1 per cent).
(c) New and amended standards adopted by the Group
The Group has not applied any new or amended standards in the annual reporting period commencing 28 June 2020.
(d) New standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for the reporting period ended
3 July 2021 and have not been early adopted by the Group.
• Amendments to IAS 1 Presentation of financial statements, and IAS 8 Accounting policies, changes in accounting estimates
and errors’ definition of material.
Governance ReportFinancial StatementsStrategic ReportCompany overview 82 Revolution Bars Group plc Annual Report and Accounts 2021
NOTES TO THE CONSOLIDATED
FINANCIAL INFORMATION CONTINUED
FOR THE 53 WEEKS ENDED 3 JULY 2021
2. Segmental information
The Group’s continuing operating businesses are organised and managed as reportable business segments according to the information
used by the Group’s Chief Operating Decision Maker (“CODM”) in its decision making and reporting structure.
The Group’s internal management reporting is focused predominantly on revenue and APM IAS 17 adjusted EBITDA, as these are the principal
performance measures and drives the allocation of resources. The CODM receives information by trading venue, each of which is considered
to be an operating segment. All operating segments have similar characteristics and, in accordance with IFRS 8, are aggregated to form
an ‘Ongoing business’ reportable segment. Within the ongoing business, assets and liabilities cannot be allocated to individual operating
segments and are not used by the CODM for making operating and resource allocation decisions.
The Group performs all its activities in the United Kingdom. All the Group’s non-current assets are located in the United Kingdom.
Revenue is earned from the sale of drink and food with a small amount of admission income.
Revenue
Cost of sales
Gross profit
Operating expenses:
– operating expenses excluding exceptional items
– exceptional items
– grant income
Total operating expenses
Operating loss
Depreciation is disclosed in note 5.
3. Operating expenses
Sales and distribution
Administrative expenses
Total operating expenses
53 weeks
ended
3 July 2021
£’000
52 weeks
ended
27 June 2020
£’000
39,417
(11,352)
110,074
(26,571)
28,065
83,503
(47,217)
(5,361)
3,357
(88,388)
(27,770)
–
(49,221)
(116,158)
(21,156)
(32,655)
53 weeks
ended
3 July 2021
£’000
52 weeks
ended
27 June 2020
£’000
43,639
8,939
52,578
101,161
14,997
116,158
The Group also received grant income of £3.4 million which is included in operating expense; please see note 4 for further information.
Exceptional items
Exceptional items, by virtue of their size, incidence or nature, are disclosed separately in order to allow a better understanding of the
underlying trading performance of the Group. Exceptional charges/(credits) comprised the following:
Administrative expenses:
– impairment of right-of-use assets
– impairment of property, plant and equipment
– lease modification
– gain on disposal
– delist from Main market and admission to AIM
– property restructure
– other
Total exceptional items
53 weeks
ended
3 July 2021
£’000
52 weeks
ended
27 June 2020
£’000
8,315
3,273
(28)
(8,388)
–
2,189
–
5,361
19,566
8,727
(897)
–
371
–
3
27,770
Revolution Bars Group plc Annual Report and Accounts 2021
83
Following implementation of IFRS 16, impairment reviews now also include right-of-use assets relating to leases. The net book value
of property, plant and equipment at 30 of the Group’s bars (2020: 37) was written down, including right-of-use asset write-downs at 31 bars
(2020: 37). Four (2020: eight) of these bars had not been subject to impairment charges previously. The impairment charge is attributable
to the combined effect of the increase of the right-of-use assets following lease re-gears and the impact of COVID-19 on trading
performance. The Directors considered that trading at these bars is unlikely to recover in the foreseeable future to a level that would
justify their current book value.
A credit for lease modification was recognised where the respective IFRS 16 creditors had reduced following a reduction in rental amount
or length of lease. Where a lease modification reduces the scope of a lease, the gain is netted against the related right-of-use asset.
Where the right-of-use asset is fully impaired, the gain is taken as a credit to administrative expenses.
During the period, two loss-making leases have been surrendered (Liverpool Cavern Quarter and Huddersfield de Cuba) and a further
six sites (America Square, Birmingham, Clapham Junction, Richmond, Solihull and Sunderland) returned to their landlords through
a Company Voluntary Arrangement (“CVA”) undertaken by the Group’s wholly owned subsidiary entity, Revolution Bars Limited.
The Property Restructure costs predominantly comprise the associated CVA professional fees, alongside other legal and professional
costs incurred through landlord negotiations and the relevant closure costs of the affected sites.
Exceptional gains on disposal occurred in respect of these lease surrenders as a result of extinguishing IFRS 16 lease liabilities, and is net
of surrender premiums paid and payable to landlords and other relevant exit costs; this net position is classified as an exceptional gain
on disposal.
Gross gain on disposal
Surrender premiums paid in period
Related surrender costs paid in period
Impairment on exited properties
Total exceptional gain on disposal
4. Grant income
Local authority grants
53 weeks
ended
3 July 2021
£’000
52 weeks
ended
27 June 2020
£’000
(9,686)
450
71
777
(8,388)
–
–
–
–
–
53 weeks
ended
3 July 2021
£’000
52 weeks
ended
27 June 2020
£’000
3,357
3,357
–
–
The Government have provided various Local Authority grants to support the hospitality industry, particularly for periods of closure
or severe restrictions. There have been various rules around claiming these, with the values predominantly based on the rateable value
of the properties. This income has been recognised as Other Income within operating loss.
5. Group operating loss
Group operating loss is stated after charging:
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Impairment of property, plant and equipment
Impairment of right-of-use assets
Amortisation of intangibles
Auditors’ remuneration:
– audit fees payable to the Company’s auditors for the audit of these financial statements
Fees payable to the Company’s auditors for:
– audit of financial statements of subsidiary companies
– interim review
53 weeks
ended
3 July 2021
£’000
52 weeks
ended
27 June 2020
£’000
6,045
5,770
3,273
8,315
1
155
85
–
7,397
7,215
8,727
19,566
1
151
76
21
Governance ReportFinancial StatementsStrategic ReportCompany overview 84 Revolution Bars Group plc Annual Report and Accounts 2021
NOTES TO THE CONSOLIDATED
FINANCIAL INFORMATION CONTINUED
FOR THE 53 WEEKS ENDED 3 JULY 2021
6. Staff numbers and costs
The average monthly number of employees during each period, analysed by category, was as follows:
Administrative
Operational
The aggregate payroll costs were as follows:
Wages and salaries
Social security costs
Other pension costs
Share-based payment charge (note 22)
53 weeks
ended
3 July 2021
52 weeks
ended
27 June 2020
92
2,403
2,495
98
2,870
2,968
53 weeks
ended
3 July 2021
£’000
52 weeks
ended
27 June 2020
£’000
19,401
2,068
527
64
22,060
32,821
2,339
597
42
35,799
Aggregate payroll costs include £0.1 million (2020: £0.3 million) capitalised as property, plant and equipment, and are net of £14.5 million
(2020: £7.6 million) of Coronavirus Job Retention Scheme grants received.
7. Directors’ remuneration
Aggregate emoluments
Pension contributions to money purchase schemes1
Emoluments in respect of the highest paid Director
Aggregate emoluments
Pension contributions to money purchase schemes1
53 weeks
ended
3 July 2021
£’000
52 weeks
ended
27 June 2020
£’000
766
48
814
397
45
442
668
42
710
327
42
369
1
Includes salary enhancements made in lieu of pension contributions due to pension caps.
Two Directors (2020: one) were enrolled in a defined contribution pension scheme in the period. In addition to the above,
£107k (2020: £353k) of long-term incentive share options were awarded to the highest paid Director in the period.
The Directors agreed varying reductions in salary throughout the majority of FY21, at a maximum reduction of 50%, to mitigate
the impact of COVID-19; please see the Directors’ Remuneration Report for further information.
8. Finance expense and income
Interest payable on bank loans and overdrafts
Interest on lease liabilities
Interest payable
53 weeks
ended
3 July 2021
£’000
52 weeks
ended
27 June 2020
£’000
1,133
4,007
5,140
599
4,335
4,934
Revolution Bars Group plc Annual Report and Accounts 2021
85
Gross gain on disposal
Surrender premiums paid in period
Related surrender costs paid in period
Surrender premiums to be paid
Total exceptional finance income
53 weeks
ended
3 July 2021
£’000
52 weeks
ended
27 June 2020
£’000
–
–
–
–
–
(8,893)
1,369
405
1,250
(5,869)
Exceptional gains on disposal occurred in respect of lease surrenders as a result of extinguishing IFRS 16 lease liabilities, and is net
of surrender premiums paid and payable to landlords; this net position is classified as exceptional finance income.
9. Income tax
The major components of the Group’s tax credit for each period are:
Analysis of credit in the period
Current tax
UK corporation tax on the loss for the period
Deferred tax – Profit and loss account
Origination and reversal of timing differences
IFRS 16 deferred tax unwinding
Write-off of IFRS 16 deferred tax asset
Deferred tax – Reserves
Tax impact of change in accounting policy
Total deferred tax
Total tax credit
Factors affecting current tax credit for the period
Loss before taxation
Loss at standard rate of UK corporation tax (2021: 19.0%; 2020: 19.0%)
Effects of:
– expenses not deductible for tax and other permanent differences
– adjustment in respect of prior periods
– changes in expected tax rates on deferred tax balances
– deferred tax not recognised
Total tax charge/(credit) for the period
53 weeks
ended
3 July 2021
£’000
52 weeks
ended
27 June 2020
£’000
–
–
–
–
–
–
–
–
–
(413)
310
3,564
3,461
(3,874)
(413)
(413)
(26,296)
(31,720)
(4,996)
(6,027)
386
(4)
(5,635)
10,249
–
1,463
(111)
3
8,133
3,461
At 3 July 2021, the Group has carried forward tax losses of £23.6 million (2020: £13.8 million) available to offset against future profits
for which no deferred tax asset has been recognised (2020: no deferred tax liability recognised).
The Finance Bill 2016 enacted provisions to reduce the main rate of UK corporation tax to 17% from 1 April 2020. However, in the March
2020 Budget it was announced that the reduction in the UK rate to 17% will now not occur and the Corporation Tax Rate will be held at
19% for the years starting 1 April 2020 and 2021. The Group has recognised deferred tax in relation to UK companies at 19% accordingly.
In the March 2021 Budget, it was announced that from 1 April 2023 the Corporation Tax Rate for non-ring fenced profits will be increased
to 25% applying to profits over £250,000. Companies with profits between £50,000 and £250,000 will pay tax at the main rate reduced
by a margin relief providing a gradual increase in the effective Corporation Tax rate, and a small profits rate will also be introduced for
companies with profits of £50,000 or less so that they will continue to pay Corporation Tax at 19%.
Governance ReportFinancial StatementsStrategic ReportCompany overview
86 Revolution Bars Group plc Annual Report and Accounts 2021
NOTES TO THE CONSOLIDATED
FINANCIAL INFORMATION CONTINUED
FOR THE 53 WEEKS ENDED 3 JULY 2021
10. Loss per share
The calculation of loss per Ordinary Share is based on the results for the period, as set out below.
Loss for the period (£’000)
Weighted average number of shares – basic and diluted (‘000)
Basic loss per Ordinary Share (pence)
53 weeks
ended
3 July 2021
52 weeks
ended
27 June 2020
(26,296)
(35,181)
124,075
50,029
(21.2)
(70.3)
Loss for the period was impacted by one-off exceptional costs and bar opening costs. A calculation of adjusted earnings per Ordinary Share
is set out below.
Adjusted EPS
Loss on ordinary activities before taxation
Exceptional items, share-based payments and bar opening costs
Exceptional finance income
Adjusted loss on ordinary activities before taxation
Taxation (charge)/credit on ordinary activities
Taxation on exceptional items and bar opening costs
Adjusted loss on ordinary activities after taxation
Basic and diluted number of shares (‘000)
Adjusted basic and diluted loss per share (pence)
53 weeks
ended
3 July 2021
£’000
52 weeks
ended
27 June 2020
£’000
(26,296)
5,425
–
(20,871)
–
(2,600)
(23,471)
124,075
(18.9)
(31,720)
27,812
(5,869)
(9,777)
(3,461)
(5,447)
(18,685)
50,029
(37.3)
On 27 July 2020 an additional 75,017,495 of shares were issued as part of the Group’s admission to AIM and Fundraising, and on 15 June 2021
an additional 105,001,866 of shares were issued as a further Fundraising, taking the total issued share capital to 230,048,520. The shares have
been weighted accordingly for the above tables based on date of issue.
11. Property, plant and equipment and right-of-use assets
Property, plant and equipment
Cost
At 29 June 2019
Additions
At 27 June 2020
Additions
Transfers
At 3 July 2021
Accumulated depreciation and impairment
At 29 June 2019
Provided in the period
Impairment charges
At 27 June 2020
Provided in the period
Impairment charges
Transfers
At 3 July 2021
Net book value
At 3 July 2021
At 27 June 2020
At 29 June 2019
Freehold land
and buildings
£’000
Short
leasehold
premises
£’000
Fixtures
and fittings
£’000
IT equipment
and
office furniture
£’000
80,868
1,872
82,740
1,133
15
83,888
(35,190)
(3,709)
(11,853)
(50,752)
(3,238)
(2,750)
–
54,579
1,667
56,246
641
–
56,887
(42,403)
(2,880)
(2,997)
(48,280)
(2,282)
(465)
(6)
8,217
674
8,891
264
–
9,155
(6,956)
(808)
(69)
(7,833)
(525)
(58)
(6)
Total
£’000
145,090
4,213
149,303
2,038
15
151,356
(85,765)
(7,397)
(14,919)
(108,081)
(6,045)
(3,273)
(12)
(56,740)
(51,033)
(8,422)
(117,411)
27,148
31,988
45,678
5,854
7,966
12,176
733
1,058
1,261
33,945
41,222
59,325
1,426
–
1,426
–
–
1,426
(1,216)
–
–
(1,216)
–
–
–
(1,216)
210
210
210
Revolution Bars Group plc Annual Report and Accounts 2021
87
Short
leasehold
premises
£’000
–
94,268
2,767
–
97,035
8,234
–
–
105,269
–
(7,035)
(19,566)
(26,601)
(5,625)
(9,092)
(41,318)
63,951
70,434
Vehicles
£’000
–
398
10
27
435
–
–
(17)
418
–
(180)
–
(180)
(145)
–
(325)
93
255
Total
£’000
–
94,666
2,777
27
97,470
8,234
–
(17)
105,687
–
(7,215)
(19,566)
(26,781)
(5,770)
(9,092)
(41,643)
64,044
70,689
Right-of-use assets
Cost
At 29 June 2019
Recognition of right-of-use assets
Reassessment/modification of assets previously recognised
Additions
At 27 June 2020
Reassessment/modification of assets previously recognised
Additions
Disposals
At 3 July 2021
Accumulated depreciation and impairment
At 29 June 2019
Provided in the period
Impairment charges
At 27 June 2020
Provided in the period
Impairment charges
At 3 July 2021
Net book value
At 3 July 2021
At 27 June 2020
Depreciation and impairment of property, plant and equipment and right-of-use assets are recognised in operating expenses in the
consolidated statement of profit or loss and other comprehensive income. £777k of right-of-use asset impairment was offset against
the exceptional gain on disposal as it related to exited sites, whereas the rest is included in exceptional operating costs.
The Group has determined that for the purposes of impairment testing, each bar is a cash generating unit (“CGU”). The bars are tested
for impairment in accordance with IAS 36 “Impairment of Assets” when a triggering event is identified. The recoverable amounts for CGUs
are predominantly based on value in use, which is derived from the forecast cash flows generated to the end of the lease term discounted
at the Group’s weighted average cost of capital.
During the 53 weeks ended 3 July 2021, the Group impaired the property, plant and equipment of 30 CGUs (2020: 37 CGUs) and the
right-of-use assets of 31 CGUs (2020: 37 CGUs), either partially or in full, based on the value in use of the CGU being lower than the
prevailing net book value. When an impairment loss is recognised, the asset’s adjusted carrying value is depreciated over its remaining
useful economic life.
Impairment testing methodology
At the end of each reporting period, a filter test is used to identify whether the carrying value of a CGU is potentially impaired. This test
compares a multiple of run rate EBITDA, adjusted for an allocation of central overheads, to the carrying value of the CGU. If this test indicates
a potential impairment, a more detailed value in use review is undertaken using cash flows based on Board-approved forecasts covering
a three-year period. These forecasts combine management’s understanding of historical performance and knowledge of local market
environments and competitive conditions to set realistic views for future growth rates. Cash flows beyond this three-year period are
extrapolated using a long-term growth rate to the end of the lease term. The cash flows assume a 5-year refurb cycle, with an increase
in revenue factored after refurbishments based on historical refurbishment outcomes.
Historically, the multiple of earnings applied in the filter test has been multiplied by the shorter of the remaining lease term or eight years.
However, in the current period, a lower multiple of seven has been used in recognition of the severely adverse trading impact of COVID
raising the prospect of more widespread CGU impairments that may only be revealed by detailed value in use reviews. Using the lower
multiple naturally flags more CGUs for the more detailed value in use review.
The key assumptions in the value in use calculations are typically the cash flows contained within the Group’s trading forecasts, the long-term
growth rate and the risk-adjusted pre-tax discount rate as follows:
• The Budget for FY22 is based on the last twelve months of trading prior to COVID-19, being the last twelve months of normal trade, and then
accordingly adjusted. Management have applied a -5% to the first quarter of FY22, and -5% softening at Christmas, to account for restrictions
in the devolved nations and a cautious return of customers. The rest of the year is flat; based on the return of customers and pent up demand
seen at the end of FY21 which is viewed as a reasonable base case. Management’s Three Year Plan is then used as the best forecast for
FY23 and FY24, which applies a 2% and then 3% increase in sales year-on-year. This is deemed the most suitable basis at the year-end
for considering whether the assets were impaired at the balance sheet date and, therefore, management has adopted these assumptions
in all of the detailed value in use reviews.
Governance ReportFinancial StatementsStrategic ReportCompany overview
88 Revolution Bars Group plc Annual Report and Accounts 2021
NOTES TO THE CONSOLIDATED
FINANCIAL INFORMATION CONTINUED
FOR THE 53 WEEKS ENDED 3 JULY 2021
11. Property, plant and equipment and right-of-use assets continued
Trade has improved since the balance sheet date, with the release of restrictions in England in July and release of restrictions in the devolved
nations. The Group continues to enjoy positive trade, but clearly a level of uncertainty exists as the Group enters Winter. As such, a severe
but plausible downside case has been applied as a sensitivity, being Management’s best estimate as a severe but plausible scenario.
This assumes November is a full lockdown, as is the period January – April, with no trade in any of these months. Applying this to the
impairment calculations, instead of the budget, would increase impairment by approximately £0.6 million.
• The long-term growth rate has been applied from July 2021 at 1.0 per cent (2020: 1.0 per cent).
• Pre-tax discount rate: 9.0 per cent (2020: 8.2 per cent) based on the Group’s weighted average cost of capital.
Sensitivity analysis has been performed on each of the long-term growth rate and pre-tax discount rate assumptions with other variables
held constant. Increasing the pre-tax discount rate by 1 per cent would result in additional impairments of £0.2 million. A 0.1 per cent decrease
in the long-term growth rate would result in additional impairments of less than £0.1 million. As referred to above, a November lockdown period
and January – April lockdown period, removing all sales during those periods, would result in an increase in the impairment charge of circa
£0.6 million.
12. Intangible assets
Cost
At 27 June 2020
Additions
At 3 July 2021
Accumulated amortisation
At 27 June 2020
Provided in the period
At 3 July 2021
Net book value
At 3 July 2021
At 27 June 2020
Total
£’000
21
5
26
(1)
(1)
(2)
24
20
Trademarks are amortised over their estimated useful lives, which is 10 years. Amortisation is charged within operating expenses in the
statement of profit or loss and other comprehensive income.
13. Inventories
Goods held for resale
Sundry stocks
3 July 2021
£’000
27 June 2020
£’000
1,996
960
2,956
2,525
1,068
3,593
Sundry stocks include items such as glasses, packaging, uniform and drinks decorations. Inventory is net of provision of £543,000
(2020: £810,000).
The cost of inventories is recognised as an expense in cost of sales as follows:
Cost of inventories
53 weeks
ended
3 July 2021
£’000
52 weeks
ended
27 June 2020
£’000
11,352
26,571
Revolution Bars Group plc Annual Report and Accounts 2021
89
14. Trade and other receivables
Amounts falling due within one year
Trade receivables
Accrued rebate income
Prepayments
Other debtors
3 July 2021
£’000
27 June 2020
£’000
1,896
720
2,469
133
5,218
661
114
2,054
600
3,429
The above Other debtors relates to a furlough claim for £133k made on 14 July 2021 for the period 1 June 2021 to 30 June 2021.
In total, amounts of £14.5 million have been claimed relating to FY21, of which £14.3 million was received pre year-end. A further £5k has
been claimed as at the date of this report relating to FY22 due to the reopening of the business.
The ageing of trade receivables at the balance sheet date was:
Not past due
Past due 0-30 days
Past due 31-60 days
More than 60 days
3 July 2021
£’000
27 June 2020
£’000
1,816
17
10
53
1,896
184
6
4
467
661
The Directors are not aware of any factors affecting the recoverability of outstanding balances as at 3 July 2021.
All receivables are GBP denominated. The Group trade and other receivables is net of a specific provision for bad and doubtful debts
of £29k (2020: £nil) and a provision for bad and doubtful debts of £114k (2020: £nil), and an IFRS 9 expected credit loss provision of £23k
(2020: £16k).
Prepayments and accrued rebate income do not contain impaired assets. There is no difference between the carrying value and fair value
of all trade and other receivables. £0.8 million of prepayments relates to property rent and rates (2020: £0.4 million).
£1.5 million of Trade and other Receivables relates to uncleared credit and debit card takings (2020: £nil due to the UK Government’s
enforced closure of bars from 20 March 2020).
15. Cash and cash equivalents
Cash and cash equivalents
3 July 2021
£’000
27 June 2020
£’000
12,118
2,502
Cash and cash equivalents consist entirely of cash at bank and on hand. Balances are denominated in Sterling. The Directors consider
that the carrying value of cash and cash equivalents approximates to their fair value.
16. Trade and other payables
Trade payables
Other payables
Accruals and deferred income
Other taxes and social security costs
At 3 July 2021
3 July 2021
£’000
27 June 2020
£’000
7,526
122
10,197
2,516
5,587
24
7,364
2,820
20,361
15,795
Trade and other payables are non-interest bearing and are normally settled 30 days after the month of invoice. Trade payables are
denominated in Sterling. The Directors consider that the carrying value of trade and other payables approximates to their fair value.
The value of trade payables and accruals is substantially higher at 3 July 2021; this is as a result of the Group’s return to trading.
Governance ReportFinancial StatementsStrategic ReportCompany overview
90 Revolution Bars Group plc Annual Report and Accounts 2021
NOTES TO THE CONSOLIDATED
FINANCIAL INFORMATION CONTINUED
FOR THE 53 WEEKS ENDED 3 JULY 2021
17. Lease liabilities
At 27 June 2020
Reassessment/modification of liabilities previously recognised
Modifications taken as a credit to administrative expenses (note 3)
Surrender of leases (note 3)
Lease liability payments
Lease concessions
Finance costs
At 3 July 2021
Short
leasehold
properties
£’000
112,903
8,233
(28)
(9,686)
(8,296)
(2,047)
4,000
105,079
Vehicles
£’000
260
–
–
(20)
(149)
–
7
98
Total
£’000
113,163
8,233
(28)
(9,706)
(8,445)
(2,047)
4,007
105,177
Cash payments in the period comprise interest of £4.0 million and principal of £4.4 million. Lease liabilities are comprised of the following
balance sheet amounts:
Amounts due within one year
Amounts due after more than one year
Lease liabilities are as follows:
Not more than one year
Minimum lease payments
Interest element
Present value of minimum lease payments
Between one and five years
Minimum lease payments
Interest element
Present value of minimum lease payments
More than five years
Minimum lease payments
Interest element
Present value of minimum lease payments
18. Interest-bearing loans and borrowings
Revolving credit facility
Coronavirus Large Business Interruption Loan Scheme
3 July 2021
£’000
27 June 2020
£’000
5,143
100,034
10,203
102,960
105,177
113,163
3 July 2021
£’000
27 June 2020
£’000
9,245
(4,102)
5,143
46,362
(16,841)
14,826
(4,623)
10,203
42,210
(14,165)
29,521
28,045
91,588
(21,075)
98,752
(23,837)
70,513
74,915
3 July 2021
£’000
27 June 2020
£’000
–
15,751
15,751
24,500
–
24,500
As at the date of the consolidated financial position, the Group had an undrawn revolving credit facility (the “Facility”) of £17.3 million
expiring in June 2022, which has been extended in November 2021 till June 2023.
At the start of the reporting period, the Group received a £16.5m Coronavirus Large Business Interruption Loan Scheme (“CLBILS”) loan.
The CLBILS is a three-year term loan, the proceeds of which were used to pay down the Facility. A further £3.5 million CLBILS was received
in April 2021.
The Facility and the CLBILS are secured and supported by debentures over the assets of Revolution Bars Group plc, Revolución De Cuba
Limited, Revolution Bars Limited, Revolution Bars (Number Two) Limited and Inventive Service Company Limited, and an unlimited guarantee.
All borrowings are held in Sterling. There is no material difference between the fair value and book value of the Group interest-bearing
borrowings. For more information on the Group’s exposure to interest rate risk, see note 23.
Revolution Bars Group plc Annual Report and Accounts 2021
91
19. Provisions
Provisions relate to a provision for dilapidations due at the end of leases. The Group provides for unavoidable costs associated with lease
terminations and expiries against all leasehold properties across the entire estate, built up over the period until exit.
At 27 June 2020
Movement on provision
Utilisation of provision
At 3 July 2021
Current
Non-current
Other provisions
£’000
Dilapidations
provision
£’000
Total
provision
£’000
–
842
–
842
1,019
533
(148)
1,404
1,019
1,375
(148)
2,246
3 July 2021
£’000
27 June 2020
£’000
842
1,404
2,246
–
1,019
1,019
Other provisions include provisions for various COVID-19 related items. Dilapidation provisions are expected to be utilised over the next
5-15 years as leases come to an end.
20. Deferred tax
The following are the major deferred tax liabilities and assets recognised by the Group and movements thereon during the current and
prior reporting periods:
At 29 June 2019
(Charge)/credit to income
At 27 June 2020
Charge to income
At 3 July 2021
Deferred tax assets
Deferred tax liabilities
Total
Disclaimed or
not used
Capital
Allowances
£’000
Brought-
forward losses
£’000
Share-based
payments
£’000
19
(19)
–
–
–
(916)
916
–
–
–
484
(484)
–
–
–
Total
£’000
(413)
413
–
–
–
3 July 2021
£’000
27 June 2020
£’000
–
–
–
–
–
–
As at the reporting date, the Group had unused tax losses of £23.6 million (2020: £13.9 million) available for offset against future taxable profits, but
has not recognised a deferred tax asset in relation to these (or any other credits, including for Capital Allowances) due to uncertain trading conditions.
21. Share capital
Allotted, called up and fully paid
230,048,520 £0.001 Ordinary Shares (2020: 50,029,159 £0.001 Ordinary Shares)
Share capital at the start of the period
Share capital issued during the period
Share capital at the end of the period
3 July 2021
£’000
27 June 2020
£’000
230
230
50
50
3 July 2021
£’000
27 June 2020
£’000
50
180
230
50
–
50
On 27 July 2020 the Company issued 75,017,495 ordinary 0.1p shares at a price of 20p each, and on 15 June 2021 the Company issued
a further 105,001,866 ordinary 0.1p shares at a price of 20p each. The 19.9p premium per share less the costs was credited to the share
premium account to a total of £33.8 million.
Governance ReportFinancial StatementsStrategic ReportCompany overview
92 Revolution Bars Group plc Annual Report and Accounts 2021
NOTES TO THE CONSOLIDATED
FINANCIAL INFORMATION CONTINUED
FOR THE 53 WEEKS ENDED 3 JULY 2021
22. Share-based payments (equity settled)
The Group currently operates two share award plans, all of which are equity settled schemes.
1. The Restricted Share Award scheme (“RSA)
On 24 December 2020 the Company adopted the RSA scheme. Awards under the RSA were made on 24 December 2020 to Executive
Directors and other Senior Management. These awards vest over a period of the later of the preliminary announcement of results for the
year ended 1 July 2023 and 24 December 2023 (being three years from the Date of Grant). These shares were awarded at £0.001 cost.
The total charge for FY21 for this scheme was £0.05 million.
The fair value of the scheme is calculated at the reporting date taking the closing share price and revaluing at each reporting date across
the vesting period.
2. “The Revolution Bars Group Share Plan”
Awards under the scheme have typically comprised:
• A Nominal Cost Option (‘NCO’) granted to acquire ordinary shares in the Company at an option price of 0.1 pence per share; and
• A linked, tax-favoured Company Share Option (‘CSOP’) granted under Part II of The Revolution Bars Group Share Plan to acquire a number
of ordinary shares in the Company. The option price is set at the market value at the time of the award. The Remuneration Committee
determined in 2019 that it did not intend to issue any further options under the CSOP as it does not consider that the potential tax benefits
justify the additional administration. Accordingly, the tables in this note do not include reference to the NCO scheme unless explicitly stated.
Where the NCO and CSOP options are linked, the nominal cost option can only be exercised if the related approved option is exercised
(or waived). When an award is exercised, the related CSOP options must be exercised first and the number of shares received by an employee
through the exercise of the nominal cost options is reduced by such number of shares as have a value equal to the gain realised on the
exercise of the CSOP shares.
The Group’s PSP and CSOP plans are equity-settled share option schemes approved by HMRC. They were established in 2015.
Awards are subject to performance conditions and require holders to remain employed throughout the vesting period.
The newly created Restricted Share Award scheme was established in 2020 as a form of Management incentive; there are no specific
performance conditions required other than satisfactory personal and company performance, and continued employment over the
three-year vesting period.
Total share-based payment plans
The total charge for the period relating to employee share-based payment plans was £0.07 million (FY20: £0.04 million), all of which related
to equity-settled share-based payment transactions. A charge of £0.04 million was accrued in FY21 being the associated National Insurance
(“NI”) at 13.8% on the new RSA scheme. In September 2021 the Government announced an increase in NI rate of 1.25% to begin from April 2022,
and thus the calculations will accordingly be updated at the next balance sheet date to reflect this increase as the new expected prevailing rate
when the awards are exercised.
The table below summarises the amounts recognised in the consolidated statement of profit and loss and other comprehensive income during
the period for all schemes:
IPO LTIP AWARD
– Tranche 2
– Tranche 3
2016 LTIP AWARD
– Tranche 2
– Tranche 3
2017 LTIP Award
2018 LTIP Award
2019 LTIP Award
2020 LTIP Award
2021 RSA Award
53 weeks
ended
3 July 2021
£’000
52 weeks
ended
27 June 2020
£’000
–
(10)
(10)
–
(15)
(15)
20
(37)
33
22
51
64
(32)
1
(31)
(26)
–
(26)
(8)
32
49
26
–
42
Revolution Bars Group plc Annual Report and Accounts 2021
93
In the 53 weeks ended 3 July 2021, conditional awards of ordinary shares were granted as follows:
24 December 2020
Total
Restricted Share Award
scheme ("RSA")
Nominal cost option
("NCO")
Company share option
plan ("CSOP")
1,311,528
1,311,528
–
–
–
–
The vesting of each NCO award is subject to the attainment of performance conditions; 70 per cent is based on an adjusted earnings
per share (“EPS”) target (Part A) and 30 per cent on a TSR target (Part B). The adjusted EPS is based upon the non-GAAP measure as
discussed in note 10. The RSA is dependent upon satisfactory personal and company performance, and continued employment over the
three-year vesting period; the shares can be vested on the later of the relevant preliminary announcement or three years from initial grant.
Under the NCO and RSA schemes, the number of shares and movements in options, as well as the performance conditions are detailed below:
Movement in period
Lapsed
Granted
Forfeited
(20,000)
(3,222)
–
–
(282,392)
(240,000)
At end
–
–
–
–
–
–
–
–
Award
Grant Date
Performance period
End
Start
At start
IPO LTIP – Tranche 3
19-Mar-15
Jun-17
Jun-20
20,000
2016 LTIP – Tranche 3
09-Nov-15
Jun-17
Jun-20
3,222
2018 LTIP
2019 LTIP
2020 LTIP
2021 RSA
14-Nov-17 and 12-Apr-18
Jun-17
Jun-20
522,392
18-Oct-18 and 01-Apr-19
Jun-18
Jun-21
971,080
23-Oct-19
24-Dec-20
Jun-19
Jun-22
816,269
n/a
n/a
– 1,311,528
–
–
–
(185,926)
785,154
(65,000)
751,269
– 1,311,528
2,332,963 1,311,528
(305,614)
(490,926) 2,847,951
PSP & CSOP Part A – EPS targets
Part A vesting is dependent on the Company’s EPS compound growth rate over the relevant performance period as follows:
Awards prior to 2019
Awards in 2019
Portion of Part A award vesting
At least 7% per annum “Threshold”
Between 7% per annum and 13% per annum
At least 13% per annum “Target”
At least 27% per annum “Threshold”
Between 27% per annum and 50% per annum Pro rata between 25% and 100%
At least 50% per annum “Target”
100%
25%
The EPS calculation is based on Adjusted EPS. The EPS actuals, thresholds and targets for the various performance periods are as follows.
Scheme
2019 LTIP
2019 LTIP
2020 LTIP
Grant date
18-Oct-18
01-Apr-19
23-Oct-19
Performance period
Start
Jun-18
Jun-19
Jun-19
End
Jun-21
Jun-22
Jun-22
Adjusted EPS
Threshold
15.9p
7.0p
7.0p
Start
13.0p
3.4p
3.4p
Target
23.0p
11.5p
11.5p
PSP & CSOP Part B – TSR targets
Part B vesting is dependent on the Company’s TSR over the relevant performance periods listed above relative to the TSR of the
peer group of other UK-listed restaurant and bar sector companies over the same period.
No portion vests unless the Group’s TSR performance at least matches the median of the TSR performance within the comparator
Group; thereafter the following vesting calculations apply:
The Company’s TSR performance against the TSR of the comparator companies
Extent of vesting of Part B
Median
Between median and upper quartile
Upper quartile
25%
Pro-rata between 25% and 100%
100%
Governance ReportFinancial StatementsStrategic ReportCompany overview
94 Revolution Bars Group plc Annual Report and Accounts 2021
NOTES TO THE CONSOLIDATED
FINANCIAL INFORMATION CONTINUED
FOR THE 53 WEEKS ENDED 3 JULY 2021
22. Share-based payments (equity settled) continued
2. “The Revolution Bars Group Share Plan” continued
Information used in calculating the cost of granting each option
For the IPO LTIP Award, the offer price (200 pence) has been used as the base point from which TSR is measured for the Company.
For subsequent awards, the offer price is based on a three-month average prior to the start of the performance period. For all awards,
the end point offer price is based on the average for the last three months of the respective performance period.
Expected volatility has been estimated by considering historical average share price volatility for the Company and similar companies.
Staff attrition has been assessed based on historical retention rates.
The fair value of share options granted under the scheme dependent on TSR performance is estimated at the date of grant using a
Stochastic model. The fair value of share options granted under the scheme dependent on EPS performance is estimated at the date
of grant using the Black-Scholes model. The following table gives the assumptions relevant to options for which charges were made
for the 52 weeks’ periods ended 27 June 2020 and 29 June 2019:
NCO: fair value at grant date – EPS (pence)
CSOP: fair value at grant date – EPS (pence)
NCO: fair value at grant date – TSR (pence)
CSOP: fair value at grant date – TSR (pence)
NCO: exercise price (pence)
CSOP: exercise price (pence)
Share price (pence)*
Expected volatility
Expected life of options (years)
Weighted average remaining life (years)
Expected dividend yield
Risk-free rate
1 Granted on 14 November 2017 and 12 April 2018.
2 Granted on 18 October 2018 and 1 April 2019.
3 Granted on 23 October 2019.
20203 award
20192 award
20181 award
67
–
34
–
0.1
–
57.4
45.0%
3.0
1.2
0.0%
0.5%
116
40
62
35
0.1
115
115
44.6%
3.0
0.2
0.0%
0.8%
139
48
86
42
0.1
162
153
57.7%
3.0
–
3.2%
1.0%
*
The share price is stuck at the average closing mid-market price of the ordinary shares in the 3 days preceding the issue of options.
23. Financial instruments
The Board has overall responsibility for the determination of the Group’s risk management objectives and policies. The overall objective
of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group’s competitiveness and flexibility.
The Group is exposed to the following financial risks:
• credit risk;
•
liquidity risk;
• market risk; and
• capital risk.
Cash and cash equivalents are held in Pounds Sterling. Trade and other payables are measured at amortised cost.
Credit risk
Credit risk arises from the Group’s cash balances held with counterparties and trade and other receivables. Credit risk is the risk of financial
loss to the Group if a third-party owing monies to the Group fails to meet its contractual obligations. The Group limits its exposure to credit risk
from trade receivables by establishing a maximum payment period of three months for corporate customers.
Trade and other receivables are measured at amortised cost. Book values and expected cash flow are reviewed by the Board and any
impairment is charged to the consolidated statement of comprehensive income in the relevant period. Trade and other receivables do not
contain any impaired assets.
All cash balances are held with reputable banks and the Board monitors its exposure to counterparty risk on an ongoing basis. The Group
attempts to mitigate credit risk by assessing financial counterparties.
Given the nature of the Group’s operations, the Directors do not consider the Group’s credit risk, which arises mainly from cash held with
mainstream UK banks, to be significant.
Revolution Bars Group plc Annual Report and Accounts 2021
95
The Group’s financial assets, which are exposed to credit risk, are as follows:
Trade receivables
Cash and cash equivalents
The ageing of trade receivables at the balance sheet date was:
Not past due
Past due 0-30 days
Past due 31-60 days
More than 60 days
3 July 2021
£’000
27 June 2020
£’000
1,896
12,118
14,014
661
2,502
3,163
3 July 2021
£’000
27 June 2020
£’000
1,816
17
10
53
1,896
184
6
4
467
661
The Directors are not aware of any factors affecting the recoverability of outstanding balances as at 3 July 2021.
In accordance with IFRS 9, the group has two types of financial assets that are subject to the expected credit loss model:
• Trade and other receivables
• Accrued rebate income
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance
for all trade receivables and accrued rebate income.
To measure the expected credit losses, trade receivables and accrued rebate income have been grouped based on similar credit risk
characteristics. Both primarily relate to outstanding amounts due from suppliers in relation to agreed rebates and thus have substantially
the same risk characteristics. The Group has, therefore, concluded that the expected loss rates for trade receivables are a reasonable
approximation of the loss rates for accrued rebate income. This has increased to a rate of 2% in the prior and current period following the
increased risk of trading following Covid-19.
The expected loss rates are based on the risk profiles of the suppliers with whom the balances are held as well as the related historical
results of recoverability. On that basis, the loss allowance as at 3 July 2021 and as at 27 June 2020 was determined as follows for both
trade receivables and accrued rebate income:
Expected loss rate
Trade and other receivables
Accrued rebate income
3 July 2021
£’000
27 June 2020
£’000
2%
433
720
23
2%
661
114
16
The difference between trade receivables in 2021, as shown immediately above at £0.4 million, and the £1.9 million balance earlier in this
note relates to uncleared credit and debit card takings, which have been determined as having no expected credit card loss due to their very
short clearance period (two to three days at the balance sheet date), as well as the balance being not of the expected credit loss provision.
There was no difference in 2020 due to the Group’s bars being closed in the latter part of the reporting period due to the UK Government’s
enforced closure of restaurants, pubs and bars.
Liquidity risk
Liquidity risk arises from the Group’s management of working capital. It is the risk that the Group will not be able to meet its future obligations
as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it has sufficient liquidity to meet its financial
liabilities when they fall due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the
Group’s reputation.
The Group aims to maintain a level of cash and cash equivalents in excess of expected cash outflows on financial liabilities over the next
90 days. The Group also closely monitors the level of expected cash inflows on trade and other trade receivables.
The Group maintains forward cash flow projections, updated daily, to ensure that it always has sufficient cash on hand to meet expected
operational expenses. The Group has committed lines of credit through an undrawn revolving credit facility due to expire in June 2022
and Coronavirus Large Business Interruption Loan Scheme (“CLBILS”) loans provided by Natwest, of which £15.8 million was drawn
at 3 July 2021. See Note 1 under sub-heading Going concern for further details of the Group’s funding arrangements.
Governance ReportFinancial StatementsStrategic ReportCompany overview
96 Revolution Bars Group plc Annual Report and Accounts 2021
NOTES TO THE CONSOLIDATED
FINANCIAL INFORMATION CONTINUED
FOR THE 53 WEEKS ENDED 3 JULY 2021
23. Financial instruments continued
Liquidity risk continued
The Group’s financial liabilities are as follows:
Trade payables
Other payables
Revolving credit facility
CLBILS loans
The maturity analysis of the financial liabilities is as follows:
As at 3 July 2021
Trade and other payables
Revolving credit facility
CLBILS loans
As at 27 June 2020
Trade and other payables
Revolving credit facility
CLBILS loans
3 July 2021
£’000
27 June 2020
£’000
7,526
122
–
15,751
23,399
< 1 year
£’000
7,648
–
–
< 1 year
£’000
5,611
–
–
1–5 years
£’000
> 5 years
£’000
–
–
15,751
1–5 years
£’000
–
24,500
–
–
–
–
> 5 years
£’000
–
–
–
5,587
24
24,500
_
30,111
Total
£’000
7,648
–
15,751
Total
£’000
5,611
24,500
–
These liabilities are short term in nature and are stated on an undiscounted basis.
Market risk
Market risk is the risk that changes in market prices, such as interest rates or foreign exchange rates, will affect the Group’s costs.
The objective of market risk management is to manage and control market risk exposures within acceptable parameters. Market interest
rate risk arises from the Group’s holding of interest-bearing financial assets and liabilities.
At 3 July 2021, the Group’s interest-bearing financial assets consisted solely of cash and cash equivalents (see note 15). The Group
has interest-bearing financial liabilities as at 3 July 2021, comprising a CLBILS term loan of £15.8 million (2020: nil).
The Group does not enter into derivatives or hedging transactions.
The main risk arising from the Group’s financial instruments are interest rate risk. The Group does not have any exposure to foreign currency
risk as all of the Group’s revenue and costs are in GBP.
The Board makes ad hoc decisions at its regular meetings as to whether to hold funds in instant access accounts or longer-term deposits.
All accounts are held with reputable UK banks. These policies, which the Directors consider to be appropriate for the current stage of
development of the Group’s business, will be kept under review by the Board in future years. If interest rates at each period-end reporting
date had moved by 5 per cent, the impact on results would not have been significant.
Fair value of financial instruments
The fair value of each category of financial instruments is the same as their carrying value in the Group statement of financial position.
Capital risk
The Group’s capital is made up of share capital and retained earnings.
The objectives when managing capital are:
•
to safeguard the Group’s ability to continue as a going concern, so that it can provide returns for shareholders and benefits for other
stakeholders; and
•
to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.
The Group ensures that it has sufficient cash on demand to meet its expected operational expenses, including the servicing of any
financial obligations. This excludes the potential impact of extreme circumstances which cannot be reasonably predicted.
The capital structure of the Group consists of shareholders’ equity as set out in the consolidated statement of changes in equity.
All working capital requirements are financed from existing cash resources and a revolving credit facility. There are no externally imposed
capital requirements. Financing decisions are made by the Board based on forecasts of the expected timing and level of capital and
operating expenditure required to meet the Group’s commitments and development plans. When monitoring capital risk, the Group
considers its gearing ratio.
Revolution Bars Group plc Annual Report and Accounts 2021
97
24. Dividends
Amounts recognised as distributions to equity holders in the period:
Final dividend for the 53 weeks ended 3 July 2021 of nil per share
(52 weeks ended 27 June 2020 of nil per share)
25. Note to accompany the consolidated statement of cash flow
Cash flow from operating activities
Loss before tax from operations
Adjustments for:
Net finance expense
Exceptional finance income
Exceptional gain on disposal
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Impairment of property, plant and equipment
Impairment of right-of-use assets
Lease modification
Working Capital and Other movements (further analysed below)
Amortisation of intangibles
Charge arising from long-term incentive plans
Operating cash flows before movement in working capital
Decrease in inventories
(Increase)/decrease in trade and other receivables
Increase/(decrease) in trade and other payables
Increase in provisions
Tax refunded
53 weeks ended
3 July 2021
£’000
52 weeks ended
27 June 2020
£’000
–
–
–
–
53 weeks ended
3 July 2021
£’000
52 weeks ended
27 June 2020
£’000
Note
(26,296)
(31,720)
5,140
–
(8,388)
6,045
5,770
3,273
8,315
(28)
3,881
1
64
(6,104)
637
(2,908)
4,859
1,228
(2,288)
–
4,934
(5,869)
–
7,397
7,215
8,727
19,566
(897)
(2,883)
1
42
9,396
493
6,444
(10,483)
619
6,469
1
22
Net cash flow (used in)/generated from operating activities
(2,288)
6,470
Governance ReportFinancial StatementsStrategic ReportCompany overview
98 Revolution Bars Group plc Annual Report and Accounts 2021
NOTES TO THE CONSOLIDATED
FINANCIAL INFORMATION CONTINUED
FOR THE 53 WEEKS ENDED 3 JULY 2021
26. Related party transactions
(a) Subsidiaries
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not
disclosed in this Note.
(b) Key management personnel
The compensation of key management personnel (including the Directors) is as follows:
Key management emoluments including social security costs
Awards granted under long-term incentive plans
Pension contributions to money purchase schemes1
53 weeks ended
3 July 2021
£’000
52 weeks ended
27 June 2020
£’000
1,357
233
45
1,635
1,276
503
51
1,830
1
Includes salary enhancements made in lieu of pension contributions due to pension caps.
The Group’s key management are the Directors of the Company and Senior Management as detailed on pages 32 to 34. Details of the
Directors’ remuneration is provided in the Board Report on Remuneration. The Group did not enter into any form of loan arrangement with
any Director during any of the reporting periods presented.
At the Board meeting of 15 February 2021, William Tuffy advised the Board that he would be taking up a directorship at Structadene Limited,
a private, unquoted company, with effect from 1 March 2021. Hatton Garden Properties Limited, who are landlord of the Swansea bar which
belongs to Revolution Bars Limited, are a 100% wholly owned subsidiary of Structadene Limited.
27. Post-balance sheet events
Changes to committed borrowing facilities
As at the date of the consolidated financial position, the Group had a revolving credit facility (“RCF”) of £17.3 million expiring in June 2022.
In November 2021 the RCF was extended to June 2023. The interest rate on the RCF has been increased by 1.2% with a further up-to-1%
chargeable if the RCF is drawn to within £5.0 million of total limits. A new deleveraging method has also been agreed with NatWest based
on overperformance compared to the severe but plausible downside case. Further details of the Facilities, their duration, amortisation
profiles, future availability of committed funding and financial covenant are set out under the going concern section of note 1 to the
financial statements.
28. Alternative Performance Measures – Adjusted EBITDA – Non-IFRS 16 Basis
The Board’s preferred profit measures are Alternative Performance Measures (“APM”) adjusted EBITDA and APM adjusted pre-tax loss,
as shown in the tables below. The APM adjusted measures exclude exceptional items, bar opening costs and charges/credits arising from
long term incentive plans. Non-GAAP measures are presented below which encompasses adjusted EBITDA on an IFRS 16 basis.
Non-GAAP measures
Revenue
Operating loss
Exceptional items
Charge arising from long-term incentive plans
Adjusted operating loss
Finance expense
Adjusted loss before tax
Depreciation
Amortisation
Finance expense
Adjusted EBITDA
53 weeks
ended
3 July 2021
£’000
52 weeks
ended
27 June 2020
£’000
Note
2
5
3
2
8
5
8
39,417
110,074
(21,156)
5,361
64
(15,731)
(5,140)
(20,871)
11,815
1
5,140
(3,915)
(32,655)
27,770
42
(4,843)
(4,934)
(9,777)
14,612
1
4,934
9,770
Revolution Bars Group plc Annual Report and Accounts 2021
99
The below table reconciles from the statutory non-GAAP adjusted EBITDA to the APM formats, which translates to a pre-IFRS 16 basis
by inputting the rental charge and other relevant adjustments.
Adjusted loss before tax
Depreciation
Amortisation
Finance expense
Adjusted EBITDA
Adjusted loss before tax
Depreciation
Amortisation
Finance expense
Adjusted EBITDA
53 weeks
ended
3 July 2021
IFRS 16
£’000
(20,871)
11,815
1
5,140
(3,915)
52 weeks
ended
27 June 2020
IFRS 16
£’000
(9,777)
14,612
1
4,934
9,770
Reduction in
depreciation
£’000
Reduction in
interest
£’000
Onerous lease
provision
interest
£’000
5,497
(5,497)
–
–
–
4,007
–
–
(4,007)
–
(37)
–
–
37
–
Reduction in
depreciation
£’000
Reduction in
interest
£’000
Onerous lease
provision
interest
£’000
7,161
(7,161)
–
–
–
4,335
–
–
(4,335)
–
(48)
–
–
48
–
53 weeks
ended
3 July 2021
IAS 17
£’000
(19,528)
6,318
1
1,170
Rent charge
£’000
(8,124)
–
–
–
(8,124)
(12,039)
52 weeks
ended
27 June 2020
IAS 17
£’000
(8,014)
7,451
1
647
85
Rent charge
£’000
(9,685)
–
–
–
(9,685)
The APM profit measures have been prepared using the reported results for the current period and replacing the accounting entries related
to IFRS 16 Leases with an estimate of the accounting entries that would have arisen when applying IAS 17 Leases. The effective tax rate has
been assumed to be unaltered by this change. Impairment assumptions have been re-geared for an IAS 17 perspective, and the onerous
lease provision movement has been included.
The APM profit measures see a large reduction in depreciation due to the non-inclusion of IFRS 16 depreciation on the right-of-use assets,
and similarly non-inclusion of the finance expense of interest on lease liabilities. The operating loss is impacted by the inclusion of rent
expenditure from the income statement and inclusion of the onerous lease provision. Exceptionals are significant impacted by the change
in impairment, gain on disposals recognised under IFRS 16, and the classification of certain cash closure exceptionals.
Governance ReportFinancial StatementsStrategic ReportCompany overview 100 Revolution Bars Group plc Annual Report and Accounts 2021
COMPANY STATEMENT
OF FINANCIAL POSITION
AT 3 JULY 2021
Assets
Non-current assets
Investments
Current assets
Trade and other receivables
Total assets
Liabilities
Current Liabilities
Trade and other payables
Total Liabilities
Net assets
Equity attributable to equity holders of the Parent
Share capital
Share premium
Merger reserve
Retained earnings
Total equity
The Company made a £0.7m loss after tax in the 53 weeks ended 3 July 2021 (2020: £nil).
Signed on behalf of the Board on 15 November 2021
Danielle Davies
Director
Note
3 July 2021
£’000
27 June 2020
£’000
5
6
7
8
29,650
29,650
33,513
63,163
826
30,476
–
–
(667)
(667)
63,163
29,809
230
33,974
11,645
17,494
63,163
50
–
11,645
18,114
29,809
Revolution Bars Group plc Annual Report and Accounts 2021
101
COMPANY STATEMENT
OF CHANGES IN EQUITY
FOR THE 53 WEEKS ENDED 3 JULY 2021
At 29 June 2019
Result and total comprehensive income for the period
Charge arising from long-term share-based payments
At 27 June 2020
Result and total comprehensive income for the period
Fundraising
Charges arising from long-term incentive plans
At 3 July 2021
Share
capital
£’000
Share
premium
£’000
50
–
–
50
–
180
–
230
–
–
–
–
–
33,794
–
33,794
Reserves
Merger
reserve
£’000
11,645
–
–
11,645
–
–
–
11,645
Retained
earnings
£’000
18,072
–
42
18,114
(684)
–
64
Total
equity
£’000
29,767
–
42
29,809
(684)
33,974
64
17,494
63,163
COMPANY STATEMENT
OF CASH FLOW
FOR THE 53 WEEKS ENDED 3 JULY 2021
Cash flow from operating activities
Result before tax
Adjustments for:
Dividends received
Increase in trade and other receivables
(Decrease)/increase in trade and other payables
Charge arising from share-based payments
Net cash flow used in operating activities
Cash flow from investing activities
Dividends received from subsidiary company
Net cash flow generated from investing activities
Cash flow from financing activities
Equity dividends paid
Fundraising
Net cash flow generated from financing activities
Net increase in cash and cash equivalents
Opening cash and cash equivalents
Closing cash and cash equivalents
53 weeks
ended
3 July 2021
£’000
52 weeks
ended
27 June 2020
£’000
(684)
–
(32,687)
(667)
64
(33,974)
–
–
–
33,974
33,974
–
–
–
–
–
(709)
667
42
–
–
–
–
–
–
–
–
–
Governance ReportFinancial StatementsStrategic ReportCompany overview
102 Revolution Bars Group plc Annual Report and Accounts 2021
NOTES TO THE COMPANY
FINANCIAL INFORMATION
1. Accounting policies
Statement of compliance
The Company’s financial statements have been prepared in accordance with International Accounting Standards in conformity with the
requirements of the Companies Act 2006, and they apply to the financial statements of the Group, for the 53 weeks ended 3 July 2021
(prior period 52 weeks ended 27 June 2020).
Basis of preparation
The Company financial statements have been prepared in accordance with International Accounting Standards in conformity with the
requirements of the Companies Act 2006 (“IFRS”). They are presented in Pounds Sterling, with values rounded to the nearest hundred
thousand, except where otherwise indicated. The financial statements have also been prepared under the historical cost convention,
on a going concern basis. These policies have been applied consistently, other than where new policies have been adopted.
Going concern
The Company going concern is reliant on Group performance; the Directors have reviewed the Company’s trading forecasts for the next
12 months and formed a judgement at the time of approving the financial information that there is a reasonable expectation that the Company
has adequate resources to continue in operational existence for the foreseeable future. For this reason the Directors continue to adopt the
going concern basis in preparing the financial information. Please refer to the Group going concern disclosure, which references a material
uncertainty, for further information. This material uncertainty relates to both the Group and Company.
(a) Accounting policies
Non-derivative financial instruments
Non-derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, cash and cash equivalents,
loans and borrowings and trade and other payables.
Trade and other receivables
Trade and other receivables are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using
the effective interest method, less any impairment losses.
Trade and other payables
Trade and other payables are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using
the effective interest method.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and cash held at bank. Bank overdrafts that are repayable on demand and form
an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose only of the
cash flow statement.
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition,
interest-bearing borrowings are stated at amortised cost using the effective interest method.
Share-based payments
The Company issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured
at fair value at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on
a straight-line basis over the vesting period based on the Group’s estimate of shares that will eventually vest. This is recognised as an
employee expense with a corresponding increase in equity. Fair value is measured by the Monte Carlo model for options subject to
a market-based performance condition and by use of a Black-Scholes model for all others. Cost is recharged to subsidiary entities.
Investments in subsidiary undertakings
A subsidiary is an entity controlled, either directly or indirectly, by the Company, where control is the power to govern the financial and
operating policies of the entity so as to obtain benefit from its activities. Investments in subsidiaries represent interests in subsidiaries that
are directly owned by the Company and are stated at cost less any provision for permanent diminution in value.
Share capital
Ordinary Shares are classified as equity. Incremental costs directly attributable to the issue of Ordinary Shares are recognised as a deduction
from equity, net of any tax effects.
Dividends
Dividends receivable from the Company’s subsidiaries and joint venture investments are recognised only when they are approved or paid
by shareholders.
Dividend distributions to the company’s shareholders are recognised in the period in which the dividends are paid, and, for the final dividend,
when approved by the company’s shareholders at the AGM.
Taxation
Tax on the profit or loss for the period comprises current and deferred tax. Tax is recognised in the consolidated statement of profit or loss and
other comprehensive income except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Revolution Bars Group plc Annual Report and Accounts 2021
103
Current tax is the expected tax payable or receivable on the taxable income or loss for the period, using tax rates enacted or substantively
enacted at the statement of financial position date, and any adjustment to tax payable in respect of previous periods.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill; the initial
recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination; and differences relating
to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided
is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities using tax rates enacted or
substantively enacted at the statement of financial position date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the temporary
difference can be utilised.
(b) Critical judgements and key sources of estimation and uncertainty
The preparation of financial information in conformity with IFRS requires management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results in due course
may differ from these estimates.
Estimates and underlying assumptions are reviewed on an on-going basis and are based on historical experience and other factors including
expectations of future events that are believed to be reasonable under the circumstances. Revisions to accounting estimates are recognised
in the period in which the estimates are revised and in any future periods affected.
The key assumptions concerning the future and other key sources of estimation and uncertainty at the date of the statement of financial
position that have a significant risk of causing material adjustments to the carrying amounts of assets and liabilities within the next financial
period are set out below.
The Directors consider the principal estimates made in the Financial Statements to be:
Recoverable amount of investments (note 5)
In view of the current trading conditions an impairment review of the carrying value of the Investment in subsidiaries was carried out,
using a value in use (‘VIU’) with free cash flows starting in FY22 (based on the board approved budget), a pre-tax discount rate of 9.0% and
a long term growth rate of 2%. If the WACC rate was changed by 1% this would change the VIU by £3.9 million. If the long-term discount rate
was changed by 1% this would change the VIU by £2.6 million. If both were changed by 1% this would change the VIU by £6.4 million, and as
a downside test of the impairment review this combined sensitivity would not result in an impairment of the carrying value of the subsidiaries.
The Directors do not consider there to be any principal judgements.
(c) New and amended standards adopted by the Group
There are no relevant new standards and interpretations adopted or not yet adopted.
2. result for the period
No profit or loss account is presented for the Company as permitted by section 408 of the Companies Act 2006. The loss after tax for
the period was £0.7 million (2020: £nil), arising solely from the expected credit loss.
3. Auditors’ remuneration
Auditors’ remuneration in respect of the Company audit was £1,500 (2020: £1,000).
4. Directors’ remuneration and employee costs
Details of Directors remuneration in respect of services delivered to the Group are contained in the Directors’ Remuneration Report on
pages 48 to 53. The remuneration received by the Directors in respect of directly attributable services to this company is inconsequential
in the context of the remuneration figure. The Company has no employees other than the Directors and the Directors are not remunerated
through this Company other than by issues of share-based payments as described in Note 1 to the Company financial statements.
The Directors are considered to be the Key Management Personnel of the Company.
5. Investments
Investments in the Company’s statement of financial position consist of investments in subsidiary undertakings as follows:
At cost and net book value:
At the beginning of the period
Investment in subsidiary
At the end of the period
53 weeks
ended
3 July 2021
£’000
52 weeks
ended
27 June 2020
£’000
29,650
–
29,650
29,650
–
29,650
Governance ReportFinancial StatementsStrategic ReportCompany overview 104 Revolution Bars Group plc Annual Report and Accounts 2021
NOTES TO THE COMPANY
FINANCIAL INFORMATION CONTINUED
5. Investments continued
As at 3 July 2021 and at 27 June 2020, the Company owned 100 per cent of the Ordinary Share capital of the following UK companies:
Company name
Country of incorporation
Class of shares
Holding
Status
Inventive Guarantee Co Limited1
Revolution Bars (Number Two) Limited1
Revolution Bars Limited1
Revolución de Cuba Limited1
Inventive Service Company Limited1
Inventive Leisure Limited1
Rev Bars Limited1
Inventive Leisure (Services) Limited1
New Inventive Bar Company Limited1
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100%
100%
100%
100%
100%
100%
100%
100%
100%
Holding company+
Trading++
Trading++
Trading++
Trading++
Dormant++
Dormant++
Dormant++
Dormant++
1
The registered address of each company is 21 Old Street, Ashton-under-Lyne, Tameside OL6 6LA.
+ Direct holding
++
Indirect holding
6. Trade and other receivables
Prepayments
Amounts owed from subsidiary undertakings
3 July 2021
£’000
27 June 2020
£’000
–
33,514
33,514
826
–
826
Amounts owed from subsidiary undertakings are unsecured, interest free and repayable on demand. The amounts owed from subsidiary
undertakings is net of an expected credit loss provision from IFRS 9 of £683,952 (2020: nil).
7. Trade and other payables
Trade payables
Amounts due to group undertakings
Amounts owed to subsidiary undertakings are unsecured, interest free and repayable on demand.
8. Share capital
Allotted, called up and fully paid
230,048,520 £0.001 Ordinary Shares (2020: 50,029,159 £0.001 Ordinary Shares)
Share capital at the start of the period
Share capital issued during the period
Share capital at the end of the period
3 July 2021
£’000
27 June 2020
£’000
–
–
–
56
611
667
3 July 2021
£’000
27 June 2020
£’000
230
230
50
50
3 July 2021
£’000
27 June 2020
£’000
50
180
230
50
–
50
On 27 July 2020 the Company issued 75,017,495 ordinary 0.1p shares at a price of 20p each, and on 15 June 2021 the Company issued
a further 105,001,866 ordinary 0.1p shares at a price of 20p each. The 19.9p premium per share less the costs was credited to the share
premium account to a total of £33.8 million.
GLOSSARY
Revolution Bars Group plc Annual Report and Accounts 2021
105
Adjusted
‘Adjusted’ before any performance measure denotes that it excludes exceptional items,
share-based payment (credit)/charges and bar opening costs
Alternative Performance Measure
(“APM”)
Key performance measure reported on an IAS 17 basis
AGM
CVA
COVID
Annual General Meeting
Company Voluntary Arrangement
The COVID-19 pandemic
Earnings per share
Profit after tax of the business divided by the weighted average number of shares in issue
during the period
EBITDA
Earning before interest, tax, depreciation, and amortisation. Please refer to note 28
for an understanding of how this metric has been affected by the implementation of IFRS 16
EPS
Earnings per share
Exceptional items
Items that by virtue of their unusual nature or size warrant separate additional disclosure
in the financial statements in order to fully understand the performance of the Group
FY20
FY21
IAS 17
The financial reporting period ended 27 June 2020
The financial reporting period ended 3 July 2021
Where measures are described as being prepared on an ‘IAS 17’ basis, this means that they
reflect the framework of accounting that applied in FY19 prior to the transition to IFRS 16 in FY20
Like-for-like sales
This measure provides an indicator of the underlying performance of our bars. There is
no accounting standard or consistent definition of ‘like-for-like sales’ across the industry.
Group like-for-like sales are defined as sales at only those venues that traded in both the
current year and comparative reporting periods
Net bank debt
Net bank debt is calculated as bank borrowings less cash at bank and other cash and
cash equivalents
Operating profit
Earnings before interest and tax
Profit before tax
Profit after taking account of all income and costs including interest but before tax
Governance ReportFinancial StatementsStrategic ReportCompany overview 106 Revolution Bars Group plc Annual Report and Accounts 2021
CORPORATE INFORMATION
Tax advisers
Grant Thornton UK LLP
4 Hardman Square
Spinningfields
Manchester
M3 3EB
Legal advisers (corporate)
Gowling WLG (UK) LLP
4 More London Riverside
London
SE1 2AU
Macfarlanes LLP
20 Cursitor St
London
EC4A 1LT
Legal advisers (property)
Shoosmiths
100 Avebury Boulevard
Milton Keynes
MK9 1FH
Legal advisers (licensing)
Kuits
3 St Mary’s Parsonage
Manchester
M3 2RD
Revolution Bars Group plc
Registered number 08838504
Registered address
21 Old Street
Ashton-under-Lyne
Tameside
OL6 6LA
Nominated advisor and Joint broker
finnCap
1 Bartholomew Close
London
EC1A 7BL
Joint broker
Peel Hunt LLP
Moor House
120 London Wall
London
EC2Y 5ET
Registrar
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds
LS1 4DL
Financial PR
Instinctif Partners
65 Gresham Street
London
EC2V 7NQ
Independent auditors
PricewaterhouseCoopers LLP
1 Hardman Square
Spinningfields
Manchester
M3 3EB
NOTES
Revolution Bars Group plc Annual Report and Accounts 2021
107
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Governance ReportStrategic ReportCompany overview
108 Revolution Bars Group plc Annual Report and Accounts 2021
NOTES
Revolution Bars Group plc Annual Report and Accounts 2021
109
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Governance ReportStrategic ReportCompany overview
Registered address
21 Old Street
Ashton-under-Lyne
Tameside
OL6 6LA
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