LONDON (ShareCast) - (Sharecast News) - Shares in The Revel Collective plummeted on Friday, after the beleaguered bars operator put itself up for sale.
The Aim-listed owner of Revolution, Revolucion de Cuba and Peach Pubs said it been undermined by both "challenging" economic conditions and higher costs.

These had combined to "thwart the business's ability to improve performance", Revel said.

"Action take to reduce costs and increase margins has not been sufficient to mitigate the negative impact of...changes to the employers' National Insurance contributions, minimum wage and duty on spirits."

Recent trading has also been poor, with revenues below expectations as the warm weather kept people out of its high street bars.

First quarter revenues were 7.4% lower, at £26.3m, following a 10.5% slump in underlying sales in the bars business.

Revel warned: "The group still expects significant sales and profit from the key festive trading period.

"But given the traditionally quieter months for the sector in January and February, the forecasts indicate that, in order to remain within its banking limits, the company would require additional funding at some point in the new calendar year."

As at 0845 BST, the stock had tumbled 35% to 0.18p.

The company said that following a strategic review with advisors, it would now look to sell the company, or parts of it, as well as considering "any other avenue to maximise returns to stakeholders".

It confirmed it was not currently in any discussions with any potential bidders, adding: "There can be no certainty that an offer will be made, nor as to the terms on which any offer will be made."

Russ Mould, investment director at AJ Bell, said: "Revel has struggled in recent years due to a shift in consumer culture, with less demand for late-night entertainment and more people choosing to cut back on alcohol.

"At the same time, costs have gone up across the industry, compounding problems for the heavily indebted business."

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE