The Revel Collective lowers FY underlying earnings guidance

(Sharecast News) - Bar operator The Revel Collective lowered its FY profit guidance on Wednesday as it said the late-night bar market remained tough and that it was also facing a "very damaging" hit from recent budget measures.

The Revel Collective said younger customers were continuing to "face challenges" with the high cost of living and that negative discourse surrounding its restructuring plan had "created uncertainty" among both guests and team members that persisted well into FY25, leading to a weaker recovery than it had originally anticipated.

While Revel said its all-important festive trading performance was "robust", and that its pubs had seen "a strong H1 performance" when compared to the prior year, lower sales in H1 and higher costs arising from the Budget, which will come into effect for the final quarter of the financial year, meant that it now expects FY underlying earnings to be in the range of �2.0m-4.0m.

Chief executive Rob Pitcher said: "We now look forward to a period which will see us implement several new sales initiatives, including launching the new brand proposition for our Revolution brand, just in time for our target guests to receive the 16.3% (18-20-year-olds) increase in National Minimum Wage.

"The newly elected Labour Government's recent budget announcements, especially the reduction in the National Insurance thresholds for employers, will have a very damaging impact on the group. These measures are regressive and offer no clear pathway for economic growth within the hospitality sector. They also pose risks to the employment market. We strongly urge the government to reconsider this policy in particular and explore more balanced alternatives."

As of 0945 GMT, Revel Collective shares had sunk 33.75% to 0.26p.

Reporting by Iain Gilbert at Sharecast.com