Revolution Bars Group PLC (LON:RBG) has scrapped its dividend after enduring another loss-making six months and warning that the outlook isn’t much better for the rest of the year.
The company, which operates 79 bars up and down the UK, posted a loss of £3.1mln (2017: loss of £3.7mln) in the six months ended 30 December.
READ: Revolution falls flat as it warns on profits
Like-for-like sales dived by 4% over the period, with the new chief executive blaming his predecessor for “underinvestment in the brand’s proposition”.
That was exacerbated by “management instability and the hot summer”, the company added.
Things haven’t picked up in the New Year, either. Like-for-likes have plunged 7.3% in the opening two months of 2018, not helped by the closure of three bars which are being refurbished.
Revolution only warned in January that adjusted underlying earnings (EBITDA) would likely fall to £12.0mln this year compared to £15.0mln the year before.
But the company has trimmed its forecasts once again following the “slow start” to the second half. Bosses now expect full-year EBITDA of between £11-12mln.
After paying an interim dividend of 1.65p this time last year, Revolution said it wouldn’t be recommending one this time around.
Shares plunge
Instead, it will use its money to reduce bank borrowings and invest in its bars, although it tried to reassure investors that it will resume dividend payments “at the earliest opportunity”.
“While Revolución de Cuba has performed well and delivered growth in the reporting period, it is clear that the lack of investment into the Revolution proposition is impacting performance,” said chief executive Rob Pitcher, who took the top job last summer.
“Revolution has been reviewed, the issues identified, and workstreams are being implemented to restore it to growth. Our confidence in achieving this is underpinned by the good performance of the new Revolution venues, while the recently refurbished sites are also seeing uplifts.”
Investors didn’t share his optimism, with shares tumbling 16% to 66.7p. Over the past year, they have halved in value.