Quoted Companies Alliance Code Compliance
The following sets out the 10 QCA Code principles and either how Revolution Bars Group plc has complied with those principles or where a more detailed discussion can be found on the Group’s website following the disclosure guidance in the QCA Corporate Governance Code:
The Group’s strategy and business model is discussed within the Chief Executive’s Review in the Annual Report and Accounts 2021 starting on page 10, which can be found at the following link: https://www.revolutionbarsgroup.com/investors/results-centre/. A further review of the business model can also be found on page 8, and further information on our strategic framework on page 14.
Our three key strategic priorities are:
- Investing in our team
- Investing in our brands and guest experience
- Investing in our estate
Following recent fundraises, our focus has been on the expansion of the estate through acquisition of new sites or groups, and refurbishment of our estate. We continue to deleverage the business and have enjoyed strong cash positions allowing us to deliver our strategies. We are currently running an enhanced refurbishment programme, to ensure our estate is at its best, and have launched two new concepts in the last year which are enjoying growing success.
We continue to focus on our team, recently becoming an above-minimum wage employer as well as focusing on a portfolio of other staff-benefits to ensure we retain our position as an employer of choice. Our Diversity & Inclusion (“D&I”) champions were recruited from across the entire workforce to set up an advisory Board to drive developments in this area. We have also invested heavily in our staff welfare, partnering with “Wiser” and “So let’s talk”.
Our investment in guest experience technology allows us to respond to customer needs quickly and adapt our strategy accordingly. We continue to drive technology forwards to enhance our guest experience and drive sales, including a party booking system and Apps allowing pay-at-table service.
The key risks we face as a business are discussed in section 4 below but can also be found in the Annual Report and Accounts 2021 on page 18.
The Group prides itself on open communication and strong relationships with its key investors and shareholders. The Executive Directors are in regular contact with the Company’s shareholders and brief the Board on feedback and any shareholder issues. In FY21, investor briefings and roadshows were held at regular intervals, including following announcement of the preliminary and interim results, and other ad-hoc one-to-one meetings with key investors and potential investors were also held through the year to discuss the Group’s strategy and shareholder expectations, amongst other things.
Feedback from investors is also delivered to the Executive Board, and key management to ensure it is at the heart of our strategies. The Board believes the Annual Report and Interim Report, and the accompanying presentations, provide necessary information to influence investor assessments on performance, business model and strategy. Hard copies are available to all shareholders who request one, and copies are also available on the Group’s website at the following link: https://www.revolutionbarsgroup.com/investors/results-centre/
Shareholders or investors may contact the Company or the management team via our investor relations email address, email@example.com . We also welcome any written correspondence, which our Chief Financial Officer or Company Secretary will respond to, as well as contact via our Company’s registrar, Link Group.
The Board particularly supports the use of the AGM to communicate, in particular, with private investors. All shareholders are given the opportunity to ask questions and raise issues; this can be done formally during the meeting or informally with the directors after it. Where the AGM has been a closed meeting due to COVID, shareholders have been given the opportunity to raise questions in advance via the email address above.
The voting record at the Company’s General Meetings is monitored, and we are pleased that all resolutions were passed by shareholders at the 2021 AGM.
The Board considers engagement with its stakeholders as fundamental to the Group’s success, as well as helping the Board and management make key decisions. The s172 Statement provides detailed information as to our engagement with key stakeholders and can be found on page 24 of the Annual Report and Accounts 2021.
Colleagues – Attracting and retaining the best people is fundamental to driving business success, particularly given the Group’s purpose, vision and values. The shift to remote working has allowed the opportunity for the Board, Executive team and wider colleagues to work together more closely and successfully than ever before. Regular virtual updates are provided by the Chief Executive Officer, Rob Pitcher, and other Executive members to the wider business. Team members are asked to complete the twice-yearly Quality of Life survey, as it is the most effective way of measuring employee engagement, motivation, affiliation and commitment to the business. The Executive team and senior management undertake regular bar visits to allow the teams time for communication and feedback. We introduced a D&I Board, made up of members across our workforce, committed to working together with respect for each other and the Group in a truly collaborative way.
Suppliers – Accessing new premium products is a key element of keeping the Group’s offering vibrant, refreshed and interesting, whilst providing the brand owners with an opportunity to showcase their products in a fun environment. We pride ourselves on maintaining great relationships with our suppliers to allow us to source the best value goods for the benefit of our guests. Brand owners and key suppliers are invited to attend the Group’s annual conference, which includes sessions for the brands to understand how they can work best with the Group whilst showcasing their new products. All major contracts are reviewed and approved by the Board; senior management regularly engages with the development teams at leading drinks brands to drive our menu innovation. Major suppliers are required to include statements on modern slavery and anti-bribery and are asked to partner with us on our sustainable workflows.
Customers – We want to create a safe environment in which our guests love coming to us for the fun and memorable experiences we are known for, and in order to do so we must recognise our guests’ needs. Social media and review platforms are internally and externally reviewed, with high response rates to guests to understand their experiences with our bars. Recognising the increased focus on health and wellbeing, the Board is also mindful of the Group’s association with alcohol and accordingly significant resources are allocated to staff training and guest supervision. We welcome any direct feedback from customers to enhance their experience with us. Our guests are showing an increased focus on the environment and sustainability agenda, with the Group really focusing on its market-leading position with sustainability.
Investors – The Group provides regular engagement and consultation with investors, with regular trading updates. Executive Directors are regularly available for direct meetings with institutional and individual investors, particularly following publication of the Group’s Interim and Annual reports.
Community - The Group recognises its impact on local communities, and the importance of its social responsibilities. We have affiliated with the Campaign Against Living Miserable (“CALM”) as our charity partner, who are also available to support the wellbeing of our staff. Our aim is for our bars to be seen as a safe space where guests can enjoy themselves; in particular our new concept, Founders & Co., enjoys an excellent position within the community by hosting local events, showcasing local products and talent and welcoming a wide range of customers through its doors.
Environment – Revolution Bars Group prides itself on being a market leader with its sustainability agenda. We recently removed passionfruit from our cocktails saving approximately 100 tonnes of carbon and providing a significant reduction in waste; we have used the financial savings from this to offset all other cocktails making our cocktail menu carbon neutral. The Group scored a B in CDP reporting, meaning Management are taking coordinated action on climate issues and is higher than the Bars, hotels & restaurants sector average. We continue to invest in our energy-efficient kitchen in Reading and are soon to be validated for our science-based targets. More information can be found on page 29 of the Annual Report and Accounts 2021.
In order to fully understand and manage the Group’s exposure to risk, each key area of our operations is reviewed annually using a methodology that allows us to measure, evaluate, document and monitor our key risks.
Our risk management process identifies, monitors, evaluates and escalates risks as they emerge, enabling management to take appropriate action wherever possible in order to control them whilst enabling the Board to keep risk management under review.
The risk factors set out below are those which the Board believes are the most significant to the Group’s business model that could adversely affect its operations, revenue, profit, cash flow or asset values and which may prevent the Group from achieving its strategic objectives. There may be additional risks and uncertainties that are currently unknown or currently believed to be immaterial that may also have an adverse effect on the Group. Further information can be found in our Risk Report on page 18 of the Annual Report and Accounts 2021.
COVID-19 – The Group’s operating environment was severely impacted by COVID-19, significantly restricting the ability to trade at normal levels due to social distancing and restricted opening hours during periods. We implemented operational procedures to ensure safeguarding of our teams and guests, invested in COVID-safe venues through signage, PPE, technology and cleaning, held regular Board reviews to review and action against local and national lockdowns, and utilise refinancing and fundraises to ensure a strong cash liquidity position. The Group continues to monitor the situation carefully.
Supply Chain – Brexit may have short-term impacts on consumer prosperity and disposable incomes – as well as the recent inflationary challenges. The reopening of the economy after COVID has caused supply chain and HGV issues impacting the ability to obtain certain products. Prices continue to rise across all cost lines. Our suppliers assure us they are monitoring the situation closely; we adapt our menus quickly as needed to offer alternative products and will increase prices as necessary to combat the challenging cost environment.
Refurbishment and acquisition of bars – The Group’s long-term strategy is based on growth through the acquisition of new bars, and key to this is a strong pipeline of good sites. Continued like-for-like growth is dependent on refurbishment and quality of existing bars. The property team is suitably qualified and staffed to deliver this agenda; our bars have a 5-6-year refurbishment cycle with a proven track record of improvement in sales afterwards. Our recent fundraising has allowed us to start an enhanced refurbishment programme to bring us back to where we would have been had the pandemic not happened and leaves us poised and ready for any good acquisition opportunities.
Consumer demand and PR – The “out of home” markets for eating and drinking depend on consumers’ disposable income which is particularly affected with rising costs. We are able to quickly adjust our promotional activity to macroeconomic factors; our target customer base is young and affluent. In an increasingly digital world, customers are more likely to express dissatisfaction on social media rather than alerting a member of staff, which can have reputational impacts. We continue to focus on customer feedback via our partner “Feed it Back” to monitor the customer experience.
Health and Safety – The Group’s bars are open to the public and we have a duty of care to look after our staff and guests. Allergens are a heightened risk for our customers and thus we adhere to strict health and safety rules. The Group’s policies and procedures manual covers all aspects of operations with ongoing training provided. Adherence to policy is very strictly monitored both internally and through external third-party audits; incidents are thoroughly investigated, and any lessons learnt are widely communicated to the business.
Leasehold rents – All of the Group’s operating sites are held under leases, typically on a five-year cycle by reference to open market rents for rent reviews. We employ specialists to assist with the rent reviews and completed a CVA on a subsidiary in November 2020 where we exited six poorly performing sites and improved the terms on many others. We negotiated significant rent concessions throughout the pandemic to secure the future of the business.
Supplier concentration – The drinks distribution market is dominated by one significant business, Matthew Clark, which is the Group’s principal supplier. Matthew Clark operate nationwide; if they were to face business challenges then the Group’s operations could be disrupted. The proposed strategy is to tolerate the risk, and a three-year deal has recently been agreed till September 2024. The Group can adapt quickly with smaller suppliers to fill gaps where alternative products are required.
National Minimum/Living wage – A significant proportion of bar-based teams are affected; we recently become an above-minimum wage employer to combat this. Post-COVID we faced challenges in availability of the right people and wanted to ensure we were an employer of choice and retained our great people. Technology is utilised to deploy staff more effectively.
The Board consists of five Directors: three Non-Executive Directors and two Executive Directors. The three Non-Executive Directors are independent, in line with the QCA Code guidance. The Group believes the balance and experience of the Board is suitable for the business. The Non-Executive Directors of the Board have been selected with the objective to further support the breadth of skills and experience of the Board and bring constructive challenge to the Executive Directors. The Non-Executive Directors are also responsible for the effective running of the Board’s committees and ensuring that the committees support the strategic priorities of the Board.
The Board members are as follows:
- Keith Edelman – Non-Executive Chairman and Chair of the Nomination Committee
- Rob Pitcher – Chief Executive Officer
- Danielle Davies – Chief Financial Officer
- Jemima Bird – Senior Independent Non-Executive Director and Chair of the Remuneration Committee
- William Tuffy – Independent Non-Executive Director and Chair of the Audit Committee
The Executive Directors of the Company are employed on a full-time basis. Non-Executive Directors are required to devote such time to the Group’s affairs as necessary to discharge their duties, and this may change from time to time. Members are required to attend all Board meetings and Sub-Committee meetings as necessary, and attendance is monitored and disclosed in the Annual Report. These are held on at least a monthly basis, and ad-hoc meetings are held as required for the business. The Board is provided with Board papers in advance by the Company Secretary and minutes of the meetings are provided to the Board following the meeting.
The Board has overall responsibility for the Group’s system of internal control and reviewing its effectiveness. Key elements of the system of internal control include clearly defined levels of responsibility and delegation, together with well-structured reporting lines up to the Board; the preparation of comprehensive budgets for each bar and head office, approved by the Board; a review of period results against budget, together with commentary on significant variances and updates of both profit and cash flow expectations for the period; Board authorisation of all major purchases and disposals and regular reporting of legal and accounting developments to the Board.
Further details on the composition and experience of the board can be found on page 32 of the Annual Report and Accounts 2021.
The Board considers that it has sufficient skills and experience to enable it to execute its duties and responsibilities effectively given the nature and size of the Group. The Directors have a wide range of skills in Leisure, Retail, Marketing, Operational, People and Finance backgrounds, and continue to develop their skills and knowledge either through other Directorships (for Non-Executives) or via time and experience, and attending industry body events.
Where the Board considers that it does not possess the necessary expertise or experience, it will engage the services of professional advisors and consultants. The Directors receive regular updates from external advisors on legal requirements and regulations, remuneration matters and corporate governance best practice.
Further details of Board experience can be found on page 33 of the Annual Report and Accounts 2021, and biographies of the Board on pages 32 to 33.
The last Board evaluation was completed in FY20 which assessed the Board effectiveness, and any recommendations were implemented including improved accessibility of a designated Non-Executive to our team members by way of a forum to address any concerns they may have and to demonstrate there is an escalation process.
In line with best practice and the newly applicable requirements of the QCA Code, the Board intends to undertake an annual evaluation process of the Board, the Chairman and the individual Committees and Directors. The Board will utilise the results of the evaluation process when considering the adequacy of the composition of the Board and for succession planning.
Personal objectives and targets are determined each year for the Executive Directors and Executive team, and performance is measured against these metrics. The Independent Non-Executive Chairman undertakes the responsibility of assessing and monitoring the performance of the Executive Directors.
The business is built on a core purpose, vision and values. These are:
- Purpose – We create fun and memorable experiences with our Teams & Guests
- Vision – The place where everyone wants to be
- Fun – It’s at the heart of what we do, it’s who we are. Have fun, be fun and create fun
- Ambition – Always striving to be the best version of ourselves
- Integrity – Just doing the right thing, because it’s the right thing to do!
- Recognition – Creatively rewarding & recognising the achievements of all our people
Our purpose, vision and values are at the core of what we do and how we expect our people to behave. We believe these values will drive the success of the business, whilst ensuring we have happy and cared for teams and guests.
The Group has a strong People Development team who are committed to the welfare and development of the bar teams and the Support Centre.
We recently became an above-minimum wage paying employer, and introduced a new portfolio of staff benefits to ensure we retain and attract the best talent in the industry, as well as enhancing our long service awards to demonstrate our commitment back to our wonderful people and to celebrate their long-standing contributions to the Group.
We were excited to introduce the “Rev U” training academy, including new career pathways for all operational roles. We also launched our first ever high potential programme for our General Managers, an Area Manager Development programme, management level apprenticeships and implemented a mentoring programme
D&I champions were recruited from across the entire workforce to set up a new D&I Advisory Board, to ensure we’re always doing the right thing for our people. We recently implemented our “Inclusion Revolution” strategy to support this, and partner with “Wiser” to drive insight and research, to ensure we are a truly inclusive place to work.
We are aware of the pressures faced by all our team members in everyday life and we offer Mental Health First Aid training to all management across the business and have nominated Area Wellbeing Champions to drive insight and inform actions in wellbeing across the estate.
People are at the core of what we do; we strive to operate with ethics and integrity with all our stakeholders. We see many of our bar staff stay with us for long careers, working their way to senior operational roles such as General and Area managers, or alternative careers.
Where people have joined us with future aspirations, potentially as a student, we aim to support this either through flexible working or opportunities in our Support Centre departments. We pride ourselves on the length of service of our staff and home-grown abilities.
The culture and satisfaction of our people is monitored through a twice-yearly satisfaction and engagement survey called the “Quality of Life” survey, which is expected to be completed by the entire Group. We recently enjoyed our highest ever participation rate and our highest ever Employee Net Promoter Score, which was very exciting with the backdrop of the recent extremely challenging trading conditions.
The Group has established a clear division between the respective responsibilities of the Non-Executive Chairman of the Board and the Chief Executive Officer. The Non-Executive Chairman is Keith Edelman and he is responsible for the effective operation, leadership and governance of the Board, leading the Board’s discussions and its decision-making. The Chairman promotes a culture of openness and debate by facilitating the effective contribution of Non-Executive Directors and ensuring constructive relations between Executive and Non-Executive Directors.
The Chief Executive Officer is Rob Pitcher, who, through delegation from the Board, is responsible for leading the Group’s business organisation and performance and the day-to-day management of the Group. This separation of responsibilities between the Chairman and the CEO, coupled with the schedule of matters reserved for the Board, ensures that no individual has unfettered powers of decision-making.
The Board meets monthly, with further meetings for the Committees and any ad-hoc matters. Further details of attendance at these meetings can be found on page 38 of the Annual Report and Accounts 2021. It is deemed that the independence and experience of the Non-Executive Directors allow the Committees to run effectively, as follows:
Nomination Committee – The responsibility of the Committee includes reviewing the Board composition, appointing new Directors, the reappointment and re-election of existing Directors, succession planning taking into account the skills and expertise that will be needed on the Board in the future, reviewing the time requirement from Non-Executive Directors, determining membership of Board Committees and their modus operandi, and ensuring an objective evaluation of the performance of the Board and each Director takes place on a regular basis.
Audit Committee – The responsibility of the Committee includes reviewing annual and half-year results, external auditing, internal controls, and advising on the independence, appointment of the external auditor, reviewing the impact of any upcoming changes in accounting treatment as a result of new or modified IFRS, and considering matters the external auditor consider to be a significant audit risk.
Remuneration Committee – The responsibility of the Committee includes determining Chairman’s fee, the framework and policy for the remuneration of Executive Directors and other members of the Executive team, advise, determine and agree the total individual remuneration package of each of the Executive Directors and Executive team, consider and approve appropriate targets for the annual bonus and long-term share schemes operated for the Executive Directors and Executive Team, and oversee remuneration and benefit structures and policies throughout the Group’s business.
Further details on key activities of the Board can be viewed on page 40 of the Annual Report and Accounts 2021. These include business reviews and strategy, financial updates, assessment of internal control and risk management, governance updates, and any other ad-hoc matters.
The Group welcomes questions from shareholders and potential investors via its shareholder inbox, firstname.lastname@example.org , where a member of the senior team will respond quickly to any queries or concerns.
The Group’s main communication channels with shareholders for immediate messages, such as trading updates, will be the London Stock Exchange’s Regulatory News Service (“RNS”), and the investor section of our corporate website.
The Company reports formally to shareholders twice a year via the release of its interim and full-year results, including the preliminary announcement for year-end and the Annual Report and Accounts follows shortly afterwards. These financial results are communicated to the markets and shareholders through a roadshow attended by the Chief Executive Officer and Chief Financial Officer, where both will make themselves available for questions. The AGM is also a key opportunity, where the Board will make themselves available for questions by shareholders and investors.
An internal call for colleagues is also held after the release of key financial information by the Chief Executive Officer, where the information will be communicated at a high level and the floor is opened for questions. The Group ensures its people are appropriately communicated with and kept abreast of current affairs, in order to maintain operational integrity.