May 19, 2017 21:03 GMT by dailymail.co.uk

MARKET REPORT: Bar chain drops £40m due to high wages

MARKET REPORT: Bar chain drops £40m due to high wages

The Ashton-under-Lyne-based group saw £40.9m wiped off its value after it admitted to being caught out by unexpectedly high staff costs this year.

Cocktail bar group Revolution is likely to be nursing a nasty hangover after its shares dived to an all-time low yesterday.

The Ashton-under-Lyne-based group saw £40.9million wiped off its value after it admitted to being caught out by unexpectedly high staff costs this year.

It complained about 'well-publicised cost headwinds' such as a double increase to the minimum wage, a new apprenticeship levy, and an above-inflation increase in business taxes.

The group also said the five Revolucion De Cubas rum bars it has opened in the past year are taking longer to make a profit than originally anticipated.

Bitters pill: Cocktail bar group Revolution saw £40.9m wiped off its value after it admitted to being caught out by unexpectedly high staff costs this year

Bitters pill: Cocktail bar group Revolution saw £40.9m wiped off its value after it admitted to being caught out by unexpectedly high staff costs this year

Despite this, it still plans to open six bars in the next financial year.

Investors may consider reigning in hopes of making profit any time soon, as the company now expects performance to be broadly flat in 2017. 

The vast drop in Revolution's value even led analysts to suggest it could become vulnerable to a takeover bid from a private equity firm or rival. Shares fell 40.1 per cent, or 81.75p, to 122.25p.

The FTSE 100 returned to positive territory, rising 0.5 per cent, or 34.29 points, to 7470.71.

Housebuilders rallied following Theresa May's pledge to build 1.5m homes by 2022 if the Conservatives are elected in next month's general election.

Persimmon rose 0.4 per cent, or 9p, to 2431p, while Bovis rose 0.3 per cent, or 3p, to 917.5p, and Galliford Try jumped 0.7 per cent, or 9p, to 1272p.

Burberry's chief operating and financial officer Julie Brown capped off an encouraging week for the luxury clothing brand's investors by buying £166,000 worth of its shares. 

STOCK WATCH - FAIRFX 

Travel money firm FairFX rose yesterday after partnering with the EasyGroup brand, which includes firms such as EasyJet and EasyHotel.

FairFX will now offer its currency cards, cash and international payments services to the brand – which was founded by Sir Stelios Haji-Ioannou – through its EasyCurrency subsidiary.

FairFX said the partnership with the group will open new revenue streams.

Shares rose 5.8 per cent, or 3p, to 55p, and are now up 61.8 per cent for the year.

Brown, 55, bought just over 9,600 shares at 1724.9p each. The news will be music to the ears of Burberry's investors, who will already be enthused by its encouraging results earlier this week. 

Despite profits plunging by a fifth, the luxury retailer said the weak pound helped to drive 'exceptional' UK performance.

Its turnaround is expected to continue under chief executive and former Celine boss Marco Gobbetti, who takes over in July.

Despite shares falling 0.2 per cent, or 4p, to 1714p by the close yesterday, they are up 3.6pc for the week.

Holiday company Thomas Cook was among the FTSE 250's biggest losers after Barclays' analysts downgraded it to 'equal weight' from 'overweight'.

The broker said that although Thomas Cook is doing all the right things, it remains concerned by the challenging market and the UK consumer's reluctance to spend on holidays. In its results earlier this week, Thomas Cook said competition between travel agents has slowed growth in its sector. This echoed claims made by rival Tui. Shares fell 2.9 per cent, or 2.75p, to 92.45p.

Magazine firm Future had a great session after reporting a 375 per cent rise in profits for the six months ended March 31. 

The firm publishes titles such as Official PlayStation, PC Gamer and Total Film. It made £3.8million, up from £0.8million in the same period the year before, while revenues rose 35 per cent to £40.9million.

This was driven by launches and the positive impact of its acquisition of heavy metal music publication Team Rock in January 2017. 

It has also seen increased interest in its 'bookazines', which are books written and laid out in the style of a magazine. 

Trading in the second half is expected to be slightly ahead of expectations. Shares rose 15 per cent, or 27.12p, to 207p.

Metal miner Nyota Minerals soared by more than 30 per cent after asking to be suspended from the Australian stock market to focus on its UK listing. Shares advanced 33.3 per cent, or 0.03p, to 0.1p.

LV=

 

Read more at dailymail.co.uk