End of lockdown lifts spirits at Revolution
Revolution Bars toasted a rebound in demand as the end of lockdown saw drinkers flood back into its watering holes.
The chain said the lifting of restrictions triggered ‘strong demand’ with sales up by 17pc compared with pre-pandemic levels, well ahead of its expectations.
Revolution boss Rob Pitcher said the performance was ‘extremely encouraging’ and that the firm had managed to capitalise on ‘pent up demand’ built up over lockdown.
However, the company warned that any new restrictions over the next few months could jeopardise its key festive trading period, which sees its bars play host to numerous office Christmas parties.
Revolution, like the rest of the UK’s bar and pub sector, suffered heavily in 2020 as lockdown measures forced it to close its doors for months on end. In the six months to Boxing Day last year, the company saw its sales plunge 73pc as the winter lockdown scuppered its Christmas season.
Analysts at broker Finncap said the rebound in demand ‘bodes well’ for the firm as it entered its peak trading period, with students returning to university, workers coming back to the office and the festive period all likely to boost demand.
Meanwhile, house broker Peel Hunt said Revolution had created ‘an ideal foundation to ramp up expansion’ and predicted that the company will expand its bar estate by 20pc over the next three years. As a result, analysts raised their target price to 35p from 30p. Investors were also optimistic, with the stock surging 11.8pc, or 2.65p, to 25.15p, following the update.
The FtSe 100 climbed 1.17pc, or 82.17 points, to 7078.04 while the FtSe 250 was up 0.77pc, or 172.6 points, to 22559.22. Markets appeared to have been calmed by an offer from Russia’s President Putin on Wednesday to help Europe rein in soaring gas prices. Sentiment was also lifted by signs of progress in US debt ceiling negotiations as politicians in Washington DC attempt to avoid a default.
The end of the pandemic continued to hit stockbroker CMC Markets, which dropped 2.5pc, or 7p, to 270p as calmer trading across global markets cut its revenues in half. The firm, founded by Tory peer Lord Cruddas, said revenues for the six months to October are expected to be around £100m, down from £200m in the same period a year ago, adding that the number of active clients was lower than last year.
The bleak assessment followed a profit warning from CMC last month when it said market activity had been subdued following last year’s frantic trading.
Budget airline Ryanair and British Airways-owner iAG breathed a sigh of relief after competition regulators dropped a probe into refunds for flights cancelled during the Covid-19 pandemic. The Competition and Markets Authority (CMA) launched the inquiry in June to ascertain whether the carriers had broken the law by refusing to refund customers who could not legally take flights during pandemic travel restrictions.
However, the watchdog said ‘a lack of clarity in the law’ meant it could not be certain that it would be able to secure the refunds. Despite the news, Ryanair shares edged down 0.9pc, or €0.15, to €16.80 while IAG dipped 1.9pc, or 3.38p, to 176.82p.
FTSE 100 packaging giant Mondi said its third-quarter earnings were up 27pc compared with last year at £330m thanks to higher prices and demand across its business, although it also flagged that costs had been ‘significantly higher’ during the period. Despite this, the shares rose 1.3pc, or 22.5p, to 1810.5p.
Second-hand car dealer Motorpoint enjoyed early gains as booming demand for pre-owned vehicles drove revenues up. But the shares lost speed and ended the day down 3.8pc, or 13.5p, at 342p.