Shares in bars plunge 40%

Shares in cocktail bar owner Revolution Bars plunged by 40% yesterday after the company issued a warning on spiralling costs.

The Ashton-underLyne-based firm, which owns more than 60 Revolution and Revolucion de Cuba high street bars, said it was facing “wellpublicised sector cost headwinds” that have also hit its rivals, including the impact of the living wage, the new apprenticeship levy, as well as an above-inflation increase in business rates.

“These increased costs will be more than anticipated in the current year,” chief executive

“Increased costs will be more than anticipated”

Mark McQuater acknowledged.

Sales performance “remained positive” in the second half of the year, the company said, with like-for-like sales continuing to grow by 1.7% for the year to date.

But rising costs, coupled with the slowerthan-expected profitability at its newly opened bars, are taking a toll on the business.

Revolution opened five new Cuban-themed bars in the last 12 months, including one in Aberdeen. And while their underlying sales performance is on track with expectations, “these bars are taking longer to mature to full profitability than originally expected”.

As a result, earnings growth is expected to be flat year-on-year.