Revolution Bars : Preliminary announcement for the year ended 3 July 2021

16 November 2021

Revolution Bars Group plc (LSE: RBG)

Preliminary results for the 53 weeks ended 3 July 2021

Exciting return to normal trade following investment in all brands

Revolution Bars Group plc ("the Group"), a leading UK operator of 67 premium bars, trading under the Revolution and Revolución de Cuba brands, today announces its preliminary results for the 53 weeks ended 3 July 2021.

Introduction

The Group has again faced an extraordinary year where every week of trade was impacted heavily by restrictions or enforced closure. However, the Group used this period to further invest and improve its brands and operations, and the Group is now picking up where it left off prior to COVID-19. Continuing from the positive like-for-like2 ("LFL") growth before the pandemic, the Group is extremely excited to have fully reopened and see our guests and teams create the fun and memorable experiences for which our brands are renowned. After the first 14 weeks of FY22 we had already exceeded the total revenue generated in FY21. At the time of writing total revenue is currently 137% of FY21, with FY22 LFL2 revenue since 19 July, when restrictions fully relaxed in England, 14% ahead of the comparable period in FY20.

We have taken advantage of the periods when we were closed or trading under restrictions to fine tune our existing brands through a focus on customer offering, sustainability, and the creation of two exciting new brand concepts, whilst we have also strengthened the engagement of our teams and driven our Diversity & Inclusion agenda, in order to set the business up to perform strongly when trading restrictions ended. We are ready to take advantage of the reduced competition and bring our freshly developed new concepts to the market.

Results to 3 July 2021

*Net bank debt is the difference between gross bank debt and cash and cash equivalents at bank.

Key points

Utilising lockdowns to invest in our brands and offerings

• Significant investment in key projects: Sustainability, Diversity & Inclusion ("D&I"), team wellbeing, core brand propositions and guest experience;
• Enhanced commitment to our sustainability strategy by formally adopting a "Net Zero before 2030" policy with at least 40% emissions reduced;
• Increased focus on our wellbeing agenda, collaborating to provide education, events, training and activities on all aspects of mental, physical and financial health;
• Created a D&I Board, represented by individuals across our people to provide a voice for our colleagues; and
• Successful creation of two new brand concepts: Founders & Co., an artisanal market-place experience, and a soon-to-launch competitive socialising concept.

Robust and stable financial position

• Throughout FY21, liquidity has been secured through:

1. an increase in committed debt facilities including £20.0 million of Coronavirus Large

Business Interruption Loan Scheme ("CLBILS") term loans;

1. the Group's bank, NatWest, postponed various loan facility amortisation payments of

£10.5 million originally scheduled during the period March to September 2021;

1. two equity fundraisings were completed in FY21, achieving total net proceeds of £34.0 million, enabling the Group to reduce its level of borrowing, kickstart an enhanced refurbishment programme, and be poised and ready for any suitable acquisition and

growth opportunities;

1. negotiating fair agreements with suppliers and landlords through periods of lockdown,

and reduced salaries for Board members;

• 1. Company Voluntary Arrangement ("CVA") for Revolution Bars Limited in FY21 H1 resulted in the exit from six loss-making sites, and a further two loss-making sites were surrendered. Total cash rental savings agreed across the estate since the start of COVID-19 of £6.0 million;
• Net bank debt reduced from £22.0 million at the end of FY20 to £3.6 million at the end of FY21, and today the Group has cash in bank less all drawings on the RCF and CLBILS ("net cash") of £4.6 million.

Positive return to normal trading

• Pre-COVID,both our brands were exhibiting good LFL2 growth, and given the current backdrop we are excited to have seen LFL2 growth in FY22 since 19 July, when restrictions fully relaxed in England, at 14% versus the comparable period of FY20, the last normal period of trade;
• Since year-end, we have completed three refurbishments;
• Planned delivery of eight new sites across the next two financial years, expecting the majority to be delivered in FY23;
• As at 15 November 2021, we are very pleased to announce a net cash position of £4.6 million;
• Guests continue to choose our bars in ever greater numbers, with weekends busier than ever. We are very pleased to see guests and colleagues creating fun and memorable experiences;
• The Board remains confident in full year expectations.

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

Rob Pitcher, Chief Executive Officer, said:

"We are very excited to be back trading and doing what we do best. As we had hoped and expected, our young guest base was ready to return to our bars and we continue to be pleased with our level of trade, reflecting the fun and memorable experiences our teams create for our guests.

Our strategy, and the investment in our brands and people, is showing real results. We are pleased with the launch of our two new brand concepts, and love to see our two established brands continue to thrive and grow.

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.

Given the backdrop of one of the most challenging years for our Company, I am thankful to our colleagues for their resilience, professionalism and dedication. Our teams continue to create the party, and it is this effort that has resulted in our guests returning in such numbers which has in turn allowed us to enjoy such a strong start to our year."

A presentation will be shared with analysts today and the presentation will be made available on the Group's corporate website at www.revolutionbarsgroup.com.

Chairman's Statement

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, 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.

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.

Keith Edelman

Non-Executive Chairman

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

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