TIDMPIER
RNS Number : 5387A
Brighton Pier Group PLC (The)
26 September 2022
26 September 2022
The Brighton Pier Group PLC
(the "Company" or the "Group")
Unaudited interim results for the 52 weeks ended 26 June
2022
Strong year but uncertain economic outlook
The Brighton Pier Group is pleased to announce its unaudited
results for the 52 weeks ended 26 June 2022. The Group demonstrated
the continuing strength of the business model, with record revenues
at GBP40.1 million (2021: GBP13.5 million), up 25% on the same
pre-COVID period in 2019. This has been driven by strong trading
across all the Group's divisions. A consistent gross margin
performance, combined with Government support from temporary
reductions in VAT and business rates, has enabled the Group to make
good progress on maximising earnings and paying down debt. Since
the end of the previous financial year the Group has reduced its
net debt by 62% to GBP5.0 million.
These results are published in accordance with the change of the
Company's accounting reference date from the end of June to the end
of December, further details of which were set out in its RNS
announcement dated 20 June 2022.
Financial highlights - 52 weeks ended 26 June 2022
-- Revenue increased to GBP40.1 million (2021: GBP13.5 million),
a record result for the Group.
-- Group revenues are up 25% on the same pre-COVID period in 2019.
-- Group EBITDA was GBP10.8 million (2021: GBP5.1 million).
-- Gross margins held at 87%.
-- The Group benefitted from Government support by way of a
temporarily reduced rate of VAT and rates relief.
-- Profit before tax was GBP7.3 million (2021: GBP4.1 million).
-- EPS was 15.4p (2021: 11.3p).
-- Repayment of GBP7.7 million of debt (38% of borrowings); net
debt reduced to GBP5.0 million (2021: GBP13.3 million).
Operational highlights
-- Year opened with a record summer trading period in 2021
boosted by Government support packages, pent-up consumer demand and
disposable incomes accrued during lockdown.
-- Brighton Palace Pier delivered another consistent performance
- new EPOS technology installed to better capture customer data
going forward.
-- The Bars division completed its rationalisation programme
with the disposal of its last marginal site in September 2021.
-- The Golf division's high margin business continued to deliver
strong cash contribution during the period.
-- Lightwater Valley performed well in its first full year of
ownership, benefitting from investment in new food and beverage
outlets, rides and EPOS technology.
Outlook
-- The outlook for the UK economy for the remainder of 2022 and
into next year remains uncertain.
-- Current total Group sales for the important period of the
first 9 weeks to 28 August 2022 were up 1% on a like-for-like basis
versus the same pre-COVID period in 2019 benefitting from strong
trading at the Pier. This comparative excludes Lightwater Valley
which was acquired in June 2021. Going forward, management
recognise that the Group is entering a period where economic
pressures, both consumer discretionary spend allied with increased
costs will present significant trading challenges.
-- The Group will however benefit from the cash-generative
nature of its diverse businesses, with cash at the end of August
2022 of GBP11.9 million (including a GBP1.0 million undrawn
revolving credit facility) resulting in net debt of less than
GBP2.0 million. This will ensure resilience in the face of
increasing economic uncertainty.
-- Importantly, the Group has been able to mitigate some
inflationary energy and wage cost pressures through targeted price
increases, operational improvements and by fixing energy costs
where possible early in 2022. As inflationary pressures head into
double digits these will become harder to mitigate over the short
to medium term, which has increased uncertainty in budgeting and
forecasting.
Anne Ackord, Chief Executive Officer, said:
"The Group's strong recovery following the COVID pandemic has
resulted in sales of more than GBP40 million for the first time in
the Group's history. This reflects the hard work of all the Group's
employees, for which we are very grateful.
This exceptional period has benefitted both from pent-up
customer demand and from hospitality-targeted Government recovery
packages. The ongoing cash-generative nature of the Group's diverse
businesses and strong balance sheet add resilience to The Brighton
Pier Group.
Nevertheless, as we enter into unchartered waters, economic
headwinds make it difficult to predict both costs and consumer
demand, so our outlook for the future must be one of caution."
All Company announcements and news are available at
www.brightonpiergroup.com
Enquiries:
The Brighton Pier Group PLC Tel: 020 7376 6300
Luke Johnson, Chairman Tel: 020 7016 0700
Anne Ackord, Chief Executive Officer Tel: 01273 609 361
John Smith, Chief Financial Officer Tel: 020 7376 6300
Cenkos Securities plc (Nominated Adviser
and Broker)
Stephen Keys (Corporate Finance) Tel: 020 7 397
8926
Callum Davidson (Corporate Finance) Tel: 020 7397 8923
Michael Johnson (Sales) Tel: 020 7397 1933
Novella (Financial PR) Tel: 020 3151 7008
Tim Robertson
Claire de Groot
Safia Colebrook
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
About The Brighton Pier Group PLC
The Brighton Pier Group PLC is a UK entertainment business
spread across four divisions:
-- Brighton Palace Pier offers a wide range of attractions
including two arcades (with over 300 machines) and eighteen funfair
rides, together with a variety of on-site hospitality and catering
facilities. According to Visit Britain, it was the most popular
free attraction in England with over 4.2 million visitors in 2021
.
-- The Golf division ( which trades as Paradise Island Adventure
Golf) operates eight indoor mini-golf sites at high footfall retail
and leisure centres.
-- The Bars division trades under a variety of concepts
including Embargo República, Lola Lo, Le Fez, Lowlander and
Coalition. The Group's bars target a customer base of students
midweek and stylish over-21s and professionals at the weekend.
-- Lightwater Valley Adventure Park, a leading North Yorkshire
attraction, is focused on family days out. Set within 175 acres of
landscaped parkland, the park operates a variety of attractions
including rides, amusements, crazy golf, children's outdoor and
indoor play, entertainment shows, together with numerous food,
drink and retail outlets.
Business Review
Introduction
The Group has performed strongly for the 52 weeks ended 26 June
2022 (2021: 52 weeks ended 27 June 2021). As the restrictions from
the pandemic were gradually lifted all divisions performed well,
benefitting from pent-up consumer demand and Government support
packages and as a result delivered substantial increases in both
sales and profitability.
The Group's strategy remains focused on capitalising on the
potential of its diversified portfolio of leisure and family
entertainment assets in the UK.
These results include the impact of a prior year restatement,
further details of which are set out in Note 9. All references to
'2021', being the 52 weeks ended 27 June 2021, are restated
figures. The restatement primarily affects the balance sheet, with
a GBP51k reduction on the 2021 Statement of Comprehensive
Income.
Operational review
Whilst COVID restrictions prevented the Bars division from
reopening until 20 July 2021 and some restrictions were
reintroduced in December 2021 due to the emergence of the Omicron
variant, the Group has otherwise been fully open throughout the
period and able to trade mostly unhindered.
The 13-week period of summer trading to the end of September
2021 represented 40% of Group sales for the 52 weeks and was
therefore a crucial trading period for the Group. The warmer summer
weather, school holidays, a record August bank holiday week on
Brighton Palace Pier that achieved gross sales of over GBP1m,
together with the addition of Lightwater Valley, all contributed to
the Group's sales during this first quarter. This key trading
period was boosted by pent-up consumer demand and higher levels of
disposable income that consumers accrued during lockdown, together
with a significant increase in people choosing domestic holidays.
In addition, the temporarily reduced rate of VAT and rates relief
by way of Government support enabled the Group to make good
progress repaying debt taken on during the height of the pandemic.
Collectively, these factors provided a unique opportunity for the
business to maximise revenue and earnings as it re-opened.
The Group successfully completed the full integration of
Lightwater Valley (which was acquired on 17 June 2021) in the first
few months of this period. During the quieter winter months, the
Group also completed the installation of a new EPOS system. The
park opened briefly across the Easter period followed by its full
re-opening for the summer months.
In September 2021, the Bars division concluded its disposal
programme by disposing of its one remaining marginal site (Smash in
Reading). This disposal resulted in a gain of GBP0.7 million
realised upon the extinguishment of lease liabilities.
Financial review and KPIs
Total Group revenue for the period was GBP40.1 million (2021:
GBP13.5 million), up 25% on the same pre-COVID period in 2019
(2019: GBP32.0m).
Revenue split by division:
-- Pier division GBP16.5 million (2021: GBP9.7 million)
-- Golf division GBP7.1 million (2021: GBP2.4 million)
-- Bars division GBP11.2 million (2021: GBP1.3 million)
-- Lightwater Valley* GBP5.3 million (2021: GBP0.2 million)
* 2021 results for Lightwater Valley reflect the period from
acquisition on 17 June 2021 to 27 June 2021.
On a divisional basis and comparing with the pre-COVID
like-for-like period in 2019:
-- Brighton Palace Pier like-for-like sales were up 12% on 2019.
-- Golf division like-for-like sales were up 23% on 2019.
-- Bars division like-for-like sales (for only 49 weeks as the
division was only able to re-open from the end of July 2021) were
up 21% on 2019.
Group gross margin for the period continued in line at 87%
(2021: 87 %) reflecting the high-margin nature of all four
divisions - and this despite the numerous ongoing supply and cost
challenges that have appeared in the economy over the period.
Highlighted items totalling GBP0.8 million of gains (2021:
GBP2.7 million of gains) were recognised during the period. These
gains arose from:
-- GBP(0.6) million - impairment of goodwill in the Rushden site;
-- GBP0.9 million - reversal of impairment charges to property,
plant and equipment and right-of-use assets;
-- GBP(0.4) million - recognition of in-substance fixed lease payments;
-- GBP0.3 million - gain from the derecognition of other lease
liabilities during the period; and
-- GBP0.7 million - gain on extinguishment of lease liabilities
following the disposal of Smash in Reading.
Group profit on ordinary activities before tax was up 77% at
GBP7.3 million (2021: GBP4.1 million).
Group profit on ordinary activities after tax was up 36% at
GBP5.8 million (2021: GBP4.2 million) - there being no tax payable
in the prior period due to utilisation of losses which occurred
during lockdown.
In summary, for the 52-week period ended 26 June 2022 (compared
to the equivalent 52-week period ended 27 June 2021):
-- Revenue: GBP40.1 million (2021: GBP13.5 million)
-- Operating profit: GBP8.5 million (2021: GBP5.1 million)
-- Group EBITDA excluding highlighted items **: GBP10.8 million
(2021: GBP5.1 million)
-- Group EBITDA: GBP10.8 million (2021: GBP4.7 million)
-- Operating profit excluding highlighted items: GBP7.6
million
(2021: GBP2.4 million)
-- Profit before tax excluding highlighted items: GBP6.5
million
(2021: GBP1.4 million)
-- Profit before tax: GBP7.3 million (2021: GBP4.1 million)
-- Profit after tax: GBP5.8 million (2021: GBP4.2 million)
-- Net debt at the end of the period: GBP5.0
million (2021: GBP13.3 million)
-- Basic earnings per share (excluding highlighted items):
15.4p
(2021: 11.3p)
-- Basic earnings per share: 13.6p (2021: 5.6p)
-- Diluted earnings per share (excluding highlighted items):
15.2p
(2021: 11.3p)
-- Diluted earnings per share: 13.4p (2021: 5.6p)
** Highlighted items are detailed in Note 4 to the financial
statements.
The Group's key performance indicators remain centred on organic
growth coupled with continued expansion to drive revenues, EBITDA
and earnings growth.
The Board is pleased to report year-on-year growth in revenue,
EBITDA and earnings during this period with profit after tax and
earnings per share for the 52-week period both up 36%, and Group
EBITDA (excluding highlighted items) up 112%.
EBITDA split by division shows all divisions trading
strongly:
-- Pier division GBP3.1 million (2021: GBP1.0 million)
-- Golf division GBP4.2 million (2021: GBP3.1 million(DELTA>)
)
-- Bars division GBP3.0 million (2021: GBP1.8 million(DELTA>)
)
-- Lightwater Valley* GBP1.6 million (2021: GBP0.1 million)
-- Group overhead costs GBP(1.1) million (2021: GBP(0.9)
million)
* 2021 results for Lightwater Valley reflect the period from
acquisition on 17 June 2021 to 27 June 2021.
(DELTA>) 2021 EBITDA includes business interruption insurance
receipts of GBP2.5 million in the Golf division and GBP2.5 million
in the Bars division.
Cash flow and balance sheet
The Group generated net cash flow from operations of GBP11.6
million (2021: GBP4.9 million), after interest and tax payments ,
all of which was available for investment or the repayment of
debt.
Capital expenditure in the period totalled GBP0.7 million (2021:
GBP0.3 million) across the Group .
In September 2021, the Group paid GBP1.3 million to settle the
deferred consideration and working capital for the purchase of
Lightwater Valley Attractions Limited. These payments were as
agreed in the sale and purchase contract and were detailed in the
June 2021 Group Annual Report.
During the period, the Group made net debt repayments of GBP7.7
million (2021: GBP1.3 million ), which includes full repayment of
the GBP3.6 million revolving credit facility used to acquire
Lightwater Valley together with a total of GBP4.0 million scheduled
repayments on the Group's principal term loan and its Coronavirus
Business Interruption Loans.
Total bank debt at the end of the period was GBP12.7 million
(2021: GBP20.4 million), comprising a GBP11.3 million term loan and
remaining Coronavirus Business Interruption Loans of GBP1.4 million
.
At the period end, cash and cash equivalents were GBP7.7 million
(2021: GBP7.1 million).
The decrease in trade and other receivables of GBP2.0 million in
the current period primarily relates to the receipt of GBP2.0
million of COVID business interruption insurance claims, GBP1.1
million in August 2021 and a further GBP0.9 million in October
2021.
Net debt at the period end stood at GBP5.0 million (2021:
GBP13.3 million). The Directors continue to take a cautious
approach to net debt levels for the Group.
The Group currently has an undrawn revolving credit facility of
GBP1.0 million, giving total cash availability to the Group of GBP
8.7 million as at the period end .
On 16 March 2022, the Group signed a 1-year extension to its
term loan and revolving credit facilities, which were due to expire
on 5 December 2022. The facilities will now expire on 5 December
2023.
Details of the Group's banking covenants can be found on page 88
of the June 2021 Annual Report.
Trading for the 9 weeks to the 28 August 2022
Like for like sale sales for the 9-week period to the 28 August
2022 have seen softer trading across some divisions with cost
pressures building across the Group. Total like-for-like sales for
the 9 weeks were GBP8.3m, 1% up on pre-pandemic levels (2019:
GBP8.2 million). This comparative excludes Lightwater Valley which
was acquired in June 2021.
The Pier enjoyed another strong trading performance in summer
2022, with unusually warm weather in England, was up 7% on
pre-COVID levels at GBP5.6 million (2019: GBP5.2 million). Brighton
Palace Pier's iconic status in Brighton continues to draw millions
of visitors, both locally and internationally as it has done for
the last 120 years. The Pier typically starts to wind down
following this summer trading period, as it goes into the
traditionally quieter winter months.
Conversely, trading in the Bars division has been impacted by
the hot weather, with like-for-like sales down 11% on pre-COVID
levels at GBP1.7 million (2019: GBP1.9 million). Price increases
have seen gross margin improve which has helped to offset cost
increases. The division is now gearing up for the return of
students, Halloween, and Christmas.
The hot weather, in combination with a general decline in
footfall in larger shopping centres saw like-for-like sales down 8%
in the Golf division at GBP1.0 million compared to pre-pandemic
levels (2019: GBP1.1 million).
Lightwater Valley has seen significantly lower admissions
compared to the exceptional 2021 year (impacting revenues, despite
improved spend-per-head from retail investment in the new food and
beverage operations). Together with increased costs, this has
reduced profitability compared to management expectations based on
the previous season, when pent-up demand from COVID lockdowns saw
an unprecedented surge in visitors. The Group has invested GBP0.4
million in the redevelopment of the park, with new rides, improved
catering offerings, and other outdoor attractions. Planning
permission had previously been granted for the development of 106
timber-style holiday lodges on the southern edge of the Lightwater
Valley Park. A minor variation to this existing planning consent is
being sought, so that the first stage of holiday accommodation
development can commence. This first stage will see the
installation of circa twenty pod-type units for rental. The unique
forest environment will make these an attractive proposition and
will add a further revenue stream to the business. Whilst this
project is at an early stage, it demonstrates the potential to
create significant growth in the medium term.
Outlook
Following the easing of pandemic restrictions, the first half of
calendar 2022 has been characterised by new economic uncertainty,
with global instability causing significant increases in food and
energy prices, which in turn have led to rapid inflation, a widely
predicted cost-of-living crisis, strike actions and an impending
recession.
The current high inflation rate in the UK has translated into
further cost increases that are expected to continue.. The Group
has implemented targeted price uplifts to mitigate some of these
pressures where possible, resulting in gross margin unchanged at
87% over the last 24 months. The Group renegotiated some of its
energy supply contracts at the beginning of 2022, fixing the cost
of energy below the higher prices seen in recent months; other
energy supply contracts were agreed after 1 April 2022 and will
therefore benefit from the Government's recently announced Energy
Bill Relief Scheme. While wage inflation has remained relatively
stable in most areas of the business over the period, the Group
expects wage inflation to build in the latter half of 2022 and
beyond. In addition, other cost increases have in part been offset
by operational improvement and other efficiencies. As inflation
potentially heads into double digits, it will become harder to
mitigate over the short to medium term.
Furthermore, it is important to note that the Group no longer
benefits from the reduced rate of VAT and rates relief that
contributed to the record-breaking trading performance for the
period ended June 2022.
Whilst the Board notes the continued strength demonstrated by
the Company's business model over the past 52 weeks, it
acknowledges that trading for the next 26-week period to 25
December 2022 is likely to present further challenges, given the
many headwinds currently facing the world economy and possible
contractions in consumer discretionary spend. The Board looks
towards the second half of 2022 with caution.
That said, management believe the diversity of the Group's
different offerings and the low levels of net debt following on
from the summer trading to the end of August 2022 will enable the
Group to remain resilient. For the longer term, the Group remains
optimistic that economic events will bring opportunities.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
for the 52-week period ended 26 June 2022
Unaudited Audited
52 weeks ended 52 weeks ended
26 June 27 June
2022 2021
restated
Notes GBP'000 GBP'000
Revenue 40,116 13,541
Cost of sales (5,226) (1,781)
Gross profit 34,890 11,760
Operating expenses - excluding highlighted items (27,339) (15,085)
Highlighted items 4 848 2,746
--------------------------------------------------------- ------- ---------------- ----------------
Total operating expenses (26,491) (12,339)
Other operating income 90 5,693
Operating profit - excluding highlighted items 7,641 2,368
Highlighted items 4 848 2,746
--------------------------------------------------------- ------- ---------------- ----------------
Operating profit 8,489 5,114
Finance income 23 24
Finance cost (1,165) (991)
Profit before tax - excluding highlighted items 6,499 1,401
Highlighted items 4 848 2,746
--------------------------------------------------------- ------- ---------------- ----------------
Profit on ordinary activities before taxation 7,347 4,147
Taxation on ordinary activities 5 (1,590) 81
Profit for the period 5,757 4,228
Earnings per share - Basic* 6 15.4 11.3
Adjusted earnings per share - Basic** 6 13.6 5.6
Earnings per share - Diluted 6 15.2 11.3
Adjusted earnings per share - Diluted** 6 13.4 5.6
* 2022 basic weighted average number of shares in issue was 37.29m (2021: 37.29m).
** Adjusted basic and diluted earnings per share are calculated based on the profit for the
period adjusted for highlighted items.
No other comprehensive income was earned during the period (2021: nil).
Trading results for the 26-week period ended 26 June 2022 are shown in Note 10.
INTERIM CONDENSED CONSOLIDATED BALANCE SHEET
As As at As at
at 27 June 28 June
26 2021 2020
June restated restated
2022
GBP'000 GBP'000 GBP'000
Non-current assets
Intangible assets 11,004 10,457 9,467
Property, plant & equipment 28,608 29,008 25,763
Right-of-use assets 24,153 24,091 18,204
Net investment in finance leases - 635 689
Other receivables due in more than one year 206 209 367
63,971 64,400 54,490
------- --------- ---------
Current assets
Inventories 931 731 562
Trade and other receivables 1,967 4,002 1,926
Income tax receivable - 5 -
Cash and cash equivalents 7,654 7,080 2,649
10,552 11,818 5,137
------- --------- ---------
TOTAL ASSETS 74,523 76,218 59,627
======= ========= =========
EQUITY
Issued share capital 9,322 9,322 9,322
Share premium 15,993 15,993 15,993
Merger reserve (1,111) (1,111) (1,111)
Other reserve 452 452 452
Retained earnings/(deficit) 275 (5,482) (9,710)
Equity attributable to equity shareholders
of the parent 24,931 19,174 14,946
------- --------- ---------
TOTAL EQUITY 24,931 19,174 14,946
------- --------- ---------
LIABILITIES
Current liabilities
Trade and other payables 8,928 8,321 3,945
Other financial liabilities - current 1,371 5,913 -
Lease liabilities - current 1,842 2,059 2,220
Income tax payable 1,297 - 35
13,438 16,293 6,200
------- --------- ---------
Non-current liabilities
Other financial liabilities - non-current 11,271 14,456 16,797
Lease liabilities - non-current 24,359 25,715 21,684
Deferred tax liability 524 265 -
Other payables due in more than one year - 315 -
36,154 40,751 38,481
------- --------- ---------
TOTAL LIABILITIES 49,592 57,044 44,681
------- --------- ---------
TOTAL EQUITY AND LIABILITIES 74,523 76,218 59,627
======= ========= =========
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
Issued Retained Total
share Share Other Merger (deficit)/ shareholders'
capital premium reserves reserve earnings equity
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ ------ --------- --------- ---------- --------- ------------ ---------------
At 28 June
2021 9,322 15,993 452 (1,111) (5,381) 19,275
------------------ ------ --------- --------- ---------- --------- ------------ ---------------
Correction
to opening
reserves 9 - - - - (101) (101)
------------------ ------ --------- --------- ---------- --------- ------------ ---------------
At 28 June
2021 (restated) 9,322 15,993 452 (1,111) (5,482) 19,174
------------------ ------ --------- --------- ---------- --------- ------------ ---------------
Profit for
the period - - - - 5,757 5,757
As at 26
June 2022 9,322 15,993 452 (1,111) 275 24,931
------------------ ------ --------- --------- ---------- --------- ------------ ---------------
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Audited
52 weeks to 52 weeks to
26 June 27 June
2021
2022 restated
GBP'000 GBP'000
Operating activities
Profit before tax 7,347 4,147
Net finance costs 1,142 967
Amortisation of intangible assets 71 80
Depreciation of property, plant and equipment 1,506 1,218
Depreciation of right-of-use assets 1,594 1,435
Impairment of net investment in finance lease - 47
Gain on derecognition of lease liabilities due to disposal (669) (1,838)
Gain on derecognition of lease liabilities due to waivers & concessions (280) (1,334)
Charge on recognition of in-substance fixed rent 264 -
Impairment of goodwill 643 -
Reversal of impairment of property, plant and equipment (424) -
Reversal of impairment of right-of-use assets (489) -
Decrease in provisions and deferred tax - (21)
Increase in inventories (200) (59)
Decrease/(increase) in trade and other receivables 2,043 (1,738)
Increase in trade and other payables 246 2,985
Interest paid on borrowings (462) (320)
Interest paid on lease liabilities (703) (641)
Interest received 23 6
Income tax paid (34) (52)
Net cash flow from operating activities 11,618 4,882
------------ ------------
Investing activities
Purchase of property, plant and equipment, and intangible assets (681) (258)
Acquisition of business, net of cash acquired (254) (2,251)
Settlement of deferred consideration (1,000) -
Proceeds from disposal of property, plant and equipment - 11
Net cash flows used in investing activities (1,935) (2,498)
------------ ------------
Financing activities
Proceeds from borrowings - 3,634
Repayment of borrowings (7,727) (1,291)
Principal paid on lease liabilities (1,382) (296)
Net cash flows (used in)/generated from financing activities (9,109) 2,047
------------ ------------
Net increase in cash and cash equivalents 574 4,431
Cash and cash equivalents at beginning of period 7,080 2,649
Cash and cash equivalents at period end date 7,654 7,080
============ ============
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
1. GENERAL INFORMATION
The Brighton Pier Group PLC (registered number 08687172) is a
public limited company incorporated and domiciled in England and
Wales. The Company's ordinary shares are traded on AIM. Its
registered address is 36 Drury Lane, London, WC2B 5RR. The Company
is the immediate and ultimate parent of the "Group".
The Brighton Pier Group PLC owns and operates Brighton Palace
Pier, one of the leading tourist attractions in the UK. The Group
is also a leading operator of eight premium bars nationwide, eight
indoor mini- golf sites and Lightwater Valley theme park in North
Yorkshire.
The principal accounting policies adopted by the Group are set
out in Note 2.
2. ACCOUNTING POLICIES
The financial information for the 52-week periods ended 26 June
2022 and 27 June 2021 does not constitute statutory accounts for
the purposes of section 435 of the Companies Act 2006. The
financial information for the 52-week period ended 26 June 2022 has
not been audited. The Group's latest audited statutory financial
statements were for the 52 weeks ended 27 June 2021 and these have
been filed with the Registrar of Companies.
Information that has been extracted from the 27 June 2021
accounts is from the audited accounts included in the annual
report, published in November 2021, on which the auditor gave an
unmodified opinion and did not include a statement under section
498 (2) or (3) of the Companies Act 2006. A copy of these accounts
can be found on the Group's website, www.brightonpiergroup.com
.
On 21 June 2022, the Group changed its accounting reference date
(and financial year end) from the end of June to the end of
December. The Company expects to report an extended audited set of
results for the 78-week period to 25 December 2022, with a
comparison to the latest audited accounts for the 52 weeks ended 27
June 2021. These results will also include a proforma set of
financial statements for the 52 weeks ended 25 December 2022
compared to the 52 weeks ended 26 December 2021.
The interim condensed consolidated financial statements for the
52 weeks ended 26 June 2022 have been prepared in accordance with
the AIM Rules issued by the London Stock Exchange. They do not
include all the information and disclosures required in the annual
financial statements and should be read in conjunction with the
Group's annual financial statements as at 27 June 2021, which were
prepared using IFRS, in accordance with The International
Accounting Standards and European Public Limited-Liability Company
(Amendment etc.) (EU Exit) Regulations 2019.
The accounting policies used in preparation of the financial
information for the 52 weeks ended 26 June 2022 are the same
accounting policies applied to the Group's financial statements for
the 52 weeks ended 27 June 2021. These policies were disclosed in
the 2021 Annual Report and are in accordance with IFRS as set out
in The International Accounting Standards and European Public
Limited-Liability Company (Amendment etc.) (EU Exit) Regulations
2019.
Prior period comparative figures have been restated from the
original financial statements published for the period ended 27
June 2021. This restatement arose as a result of an unintentional
omission of an extension for the lease of premises at the
Manchester golf site. Further details can be found in Note 9.
NOTES to the INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
3. SEGMENTAL INFORMATION
Management has determined the operating segments based on the
reports reviewed by the Chief Operating Decision Maker ("CODM")
comprising the Board of Directors. During the 52-week period ended
26 June 2022, there have been no changes from prior periods in the
measurement methods used to determine operating segments and
reported segment profit or loss.
The segmental information is split on the basis of those same
profit centres - however, management report only the contents of
the consolidated statement of comprehensive income and therefore no
balance sheet information is provided on a segmental basis in the
following tables.
52-week period ended Brighton Head June
26 June 2022 Palace Lightwater Total office 2022 consolidated
Pier Golf Bars Valley segments costs total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- --------- -------- -------- ----------- ---------- -------- -------------------
Revenue 16,511 7,126 11,157 5,322 40,116 - 40,116
Cost of sales (2,481) (104) (2,043) (598) (5,226) - (5,226)
------------------------------- --------- -------- -------- ----------- ---------- -------- -------------------
Gross profit 14,030 7,022 9,114 4,724 34,890 - 34,890
Gross profit % 85% 99% 82% 89% 87% 87%
Operating expenses
(excluding depreciation
and amortisation) (10,974) (2,896) (6,115) (3,092) (23,077) (1,091) (24,168)
Other income 6 35 49 - 90 - 90
------------------------------- --------- -------- -------- ----------- ---------- -------- -------------------
Divisional earnings/(loss) 3,062 4,161 3,048 1,632 11,903 (1,091) 10,812
Highlighted items 848 848
Depreciation and amortisation
(excluding right-of-use
assets) (1,577) (1,577)
Depreciation of right
of use assets (1,594) (1,594)
Net finance cost (excluding
interest on lease
liabilities) (439) (439)
Net finance cost arising
on lease liabilities (703) (703)
Profit/(loss) before
tax 3,062 4,161 3,048 1,632 11,903 (4,556) 7,347
Income tax (1,590) (1,590)
------------------------------- --------- -------- -------- ----------- ---------- -------- -------------------
Profit/(loss) after
tax 3,062 4,161 3,048 1,632 11,903 (6,146) 5,757
EBITDA (excluding
highlighted items) 3,062 4,161 3,048 1,632 11,903 (1,091) 10,812
EBITDA 3,062 4,161 3,048 1,632 11,903 (1,091) 10,812
------------------------------- --------- -------- -------- ----------- ---------- -------- -------------------
NOTES to the INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
3. SEGMENTAL INFORMATION (continued)
52-week period Brighton Golf Bars Lightwater Total Head 2021 consolidated
ended Palace Valley* segments office total
27 June 2021 Pier costs
restated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- --------- -------- -------- ----------- ---------- -------- ------------------
Revenue 9,673 2,385 1,277 206 13,541 - 13,541
Cost of sales (1,381) (28) (353) (19) (1,781) - (1,781)
---------------------------- --------- -------- -------- ----------- ---------- -------- ------------------
Gross profit 8,292 2,357 924 187 11,760 - 11,760
Gross profit % 86% 99% 72% 91% 87% - 87%
Administrative expenses:
Other administrative
expenses (excluding
depreciation and
amortisation) (7,313) (2,003) (2,023) (79) (11,418) (934) (12,352)
Other income:
Insurance income - 2,500 2,500 - 5,000 - 5,000
Local authority
grant income 44 275 374 - 693 - 693
---------------------------- --------- -------- -------- ----------- ---------- -------- ------------------
Divisional earnings/(loss) 1,023 3,129 1,775 108 6,035 (934) 5,101
Highlighted items 2,746 2,746
Depreciation and
amortisation (excluding
depreciation of
right-of-use assets) (1,298) (1,298)
Depreciation of
right-of-use assets (1,435) (1,435)
Net finance cost
(excluding interest
on lease liabilities) (321) (321)
Net finance costs
arising on lease
liabilities (646) (646)
Profit/(loss) before
tax 1,023 3,129 1,775 108 6,035 (1,888) 4,147
Income tax - - - - - 81 81
---------------------------- --------- -------- -------- ----------- ---------- -------- ------------------
Profit/(loss) after
tax 1,023 3,129 1,775 108 6,035 (1,807) 4,228
EBITDA (excluding
highlighted items) 1,023 3,129 1,775 108 6,035 (934) 5,101
EBITDA 1,023 3,129 1,775 108 6,035 (1,360) 4,675
---------------------------- --------- -------- -------- ----------- ---------- -------- ------------------
*Results for Lightwater Valley reflect the period from
acquisition on 17 June 2021 to 27 June 2021.
NOTES to the INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
4. HIGHLIGHTED ITEMS
52 weeks to 52 weeks to
26 June 27 June
2022 2021
GBP'000 GBP'000
------------------------------------------------------------------------ ------------ ------------
Acquisition and pre-opening costs
Acquisition costs - 254
Restructuring costs - 66
Impairment, closure and legal costs
Impairment of goodwill 643 -
Reversal of impairment of property, plant and equipment (424) -
Reversal of impairment of right-of-use assets (489) -
Charge on recognition of in-substance fixed rent 371 -
Gain on derecognition of lease liabilities for continuing sites using:
- IFRS 9 derecognition criteria (242) (590)
- IFRS 16 practical expedient (38) (744)
Gain on derecognition of lease liabilities for disposed sites (669) (1,838)
Other disposal costs - 106
Total (848) (2,746)
------------------------------------------------------------------------ ------------ ------------
The above items have been highlighted in order to provide users
of the financial statements visibility of non-comparable costs
included in the Consolidated Statement of Comprehensive Income for
this period.
The Group performed its annual impairment test in June 2022
(2021: June). The Group considers the relationship between the
trading performance of each CGU and their book value when reviewing
for indicators of impairment. Based on management's review of the
expected performance of the core estate, an impairment of
GBP643,000 (2021: nil) was identified in the Rushden site.
Conversely, with the removal of the final remaining COVID
restrictions in the period, the trading outlook in other sites is
more favourable than in prior reviews, resulting in a reversal of
impairments applied to property, plant and equipment of GBP424,000
(2021: nil) and right-of-use assets of GBP489,000 (2021: nil).
These reverse impairments that were applied as part of management's
2020 impairment review. Further details are provided in Note 8.
During the pandemic, the Group reached agreements with many of
its landlords to temporarily replace fixed rents repayable with a
combination of fixed rents and variable turnover rents, with the
turnover element benchmarked to pre-pandemic trading. At the time
the agreements were made, there was considerable uncertainty about
whether the sites, particularly in the Bars division, would be able
to reopen and recover to pre-pandemic trading levels. In line with
accounting standards, lease liabilities were adjusted to reflect
only the fixed rent element of the lease agreements. Amounts
derecognised were included within highlighted items.
At June 2022, management reviewed the lease arrangements in
place across the Group in conjunction with the forecast performance
at each leased site. With most sites once again trading at or above
pre-pandemic levels, management assessed that the payment of
turnover rent at some sites in the Bars division was sufficiently
certain as to make them in-substance fixed payments. In accordance
with IFRS 16, rent payments totalling GBP371,000 (2021: nil) have
been added back to the lease liability on the balance sheet, with
the corresponding entry being recognised within highlighted items
in the Statement of Comprehensive Income for the period ended 26
June 2022 in order to ensure consistency with the treatment of
previously derecognised liabilities in prior periods.
The onset of the COVID pandemic prompted the IASB to issue a
practical expedient to provide relief for lessees from lease
modification accounting for rent concessions related to COVID. The
practical expedient allows entities to recognise the value of any
agreed rent concessions in the Statement of Comprehensive Income
rather than adjusting the underlying right-of-use asset and lease
liability. The Group has recognised total credits of GBP38,000
(2021: GBP744,000) within highlighted items in the Statement of
Comprehensive Income for the period ended 26 June 2022.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
4. HIGHLIGHTED ITEMS (continued)
The practical expedient can only be used for rent concessions
covering the period to 30 June 2022. In some instances, the Group
has agreed temporary lease variations that extend beyond this date.
These variations amount, in substance, to forgiveness of rent
payable without materially changing the present value of total cash
outflows over the life of the lease. In such circumstances, the
Group de-recognises the appropriate portion of its total liability
in accordance with the provisions of IFRS 9: Financial Instruments.
The value of these extended waivers is recognised in the Statement
of Comprehensive Income. The Group has recognised total credits of
GBP242,000 (2021: GBP590,000) within highlighted items in the
Statement of Comprehensive Income during the period ended 26 June
2022.
Lease liabilities of GBP669,000 were extinguished during the
period as a result of the disposal of the Reading Smash site. The
right-of-use asset relating to this site was impaired to nil during
the period ended 28 June 2020 and was included in highlighted items
for that period.
Period ended 27 June 2021
Acquisition costs of GBP254,000 relate to the Group's
acquisition of Lightwater Valley on 17 June 2021.
Restructuring costs of GBP66,000 incurred during the period
ended 27 June 2021 relate to expenses incurred during a corporate
simplification project regarding entities in the Group's Bars
division.
Gains on derecognition of lease liabilities occurred in relation
to continuing sites as result of renegotiated lease terms with
landlords in the Bars and Golf divisions. Of the amounts
derecognised, GBP744,000 was derecognised using the IFRS 16
COVID-19 practical expedient, with a further GBP590,000
derecognised as a result of applying the derecognition criteria
laid out in IFRS 9: Financial instruments.
Gains on derecognition of lease liabilities for disposed sites
of GBP1,838,000 and other closure and legal costs of GBP106,000
arose as a result of the disposal of leasehold sites in Bath,
Wimbledon and Cambridge. The corresponding right-of-use assets for
these leasehold sites were impaired to nil during the period ended
28 June 2020.
5. TAXATION
The tax charge has been calculated by reference to the expected
effective current and deferred tax rates for the 52-week period to
the 26 June 2022 applied against the profit before tax for the
period ended 26 June 2022. The full year effective tax
charge/(credit) on the underlying trading profit is estimated to be
GBP1.6 million (2021: GBP(0.1) million).
Deferred tax liabilities have increased as a result of fixed
asset timing differences, the utilisation of all available carried
forward losses from prior periods and an increase in the tax rate
used to calculate the liability.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
6. EARNINGS PER SHARE
The weighted average number of shares in the period was:
52 weeks to 52 weeks to
26 June 2022 27 June
2021
Thousands of shares Thousands of shares
Ordinary shares 37,286 37,286
------------------------------------------------------- -------------------- --------------------
Weighted average number of shares - basic 37,286 37,286
Dilutive effect on ordinary shares from share options 517 -
------------------------------------------------------- -------------------- --------------------
Weighted average number of shares - diluted 37,803 37,286
------------------------------------------------------- -------------------- --------------------
Basic and diluted earnings per share are calculated by dividing
the profit for the period into the weighted average number of
shares for the year. In order to provide a measure of underlying
performance, management have chosen to present an adjusted profit
for the period, which excludes items that may distort
comparability. Such items arise from events or transactions that
fall within the ordinary activities of the Group but which
management believes should be separately identified to help explain
underlying performance.
52 weeks to
52 weeks to 27 June
26 June 2021
2022 restated
Earnings per share from profit for the period
Basic (pence) 15.4 11.3
Diluted (pence) 15.2 11.3
-------------------------------------------------------- ------------ ------------
Adjusted earnings per share from profit for the period
Basic (pence) 13.6 5.6
Diluted (pence) 13.4 5.6
-------------------------------------------------------- ------------ ------------
7. RECONCILIATION TO EBITDA
Group profit before tax can be reconciled to Group EBITDA as
follows:
52 weeks
to
---------
52 weeks 27 June
to 2021
26 June restated
EBITDA Reconciliation 2022
------------------------------------------------ --------- -----------
Profit before tax for the year 7,347 4,147
Add back:
Depreciation of property plant and equipment 1,506 1,218
Depreciation of right-of-use-assets 1,594 1,435
Amortisation 71 80
Net finance costs 1,142 967
Highlighted items (848) (2,746)
------------------------------------------------ -----------
Group EBITDA excluding highlighted items 10,812 5,101
Remove highlighted items 848 2,746
Add back:
Gains arising on lease liability derecognition (949) (3,172)
Impairment of goodwill 643 -
Reversal of impairment of property, plant and
equipment and right-of-use assets (913) -
Charge on recognition of in-substance fixed
rent 371 -
------------------------------------------------ --------- -----------
Group EBITDA 10,812 4,675
------------------------------------------------ --------- -----------
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
8. IMPAIRMENT REVIEW
The Group performed its annual impairment test in June 2022
(2021: June). The Group considers the relationship between the
trading performance of each cash generating unit ('CGU') and their
book value when reviewing for indicators of impairment. Each of the
Group's sites represents a separate CGU, which were assessed
individually for impairment. The carrying value of each CGU
consists of the net book value of goodwill (where applicable),
property, plant and equipment and right-of-use assets. Goodwill is
allocated to the site on which it arose.
The Group has enjoyed a strong trading performance in the 52
weeks to 26 June 2022, following the full removal of COVID-related
restrictions on 19 July 2021. Following the easing of the effects
of the pandemic, the first half of 2022 created new economic
uncertainty, with multiple factors leading to significant increases
in global food and energy prices, which in turn have led to rapid
inflation, and a widely predicted cost-of-living crisis and
impending recession. Management believes the diversity of the
Group's offerings and strong balance sheet will offer some
resilience in the short and medium-term as these factors are
tackled. Longer-term, the Board remains optimistic about the
outlook for the Group.
The multiple factors have however been treated by management as
an indicator for impairment, prompting a full review of the
recoverable amount of all CGUs within the Group.
Based on management's review of the expected performance of the
core estate, an impairment of GBP643,000 was identified in the
Rushden site of the Golf division (2021: nil). Conversely, with the
removal of the final remaining COVID restrictions in the period,
the trading outlook in other sites is more favourable than in prior
reviews, resulting in a reversal of impairments applied to
property, plant and equipment of GBP424,000 (2021: nil) and
right-of-use assets of GBP489,000 (2021: nil). The original
impairments were applied as part of the June 2020 impairment
review, when the uncertainty caused by the COVID pandemic resulted
in a highly cautious trading outlook for the Group. The impairments
and reversals of impairment that were recognised following the June
2022 Group impairment review, along with their impact on the
carrying value of the Group's CGUs, are detailed in the table
below:
Carrying
Carrying value carried
value prior forward after
to June 2022 (Impairment)/ June 2022
impairment Reversal impairment
review of impairment review
GBP'000 GBP'000 GBP'000
Goodwill 10,257 (643) 9,614
Property, plant and equipment 28,094 424 28,518
Right-of-use assets 23,307 489 23,796
Total carrying value of CGUs 61,658 270 61,928
------------------------------- -------------- --------------- ---------------
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
9. LEASE CONTRACT ACCOUNTING PRIOR PERIOD RESTATEMENT
In June 2022, the Group undertook a detailed review of its
leasing contracts and discovered that a signed lease extension for
the premises at the Manchester golf site had been unintentionally
omitted during the Group's initial adoption of IFRS 16 in 2019 due
to the presence of a landlord break clause in March 2023. As a
consequence, this 10-year extension period (from March 2023 to
March 2033) had not been reflected in the measurement of the
right-of-use asset and associated lease liability. The effect of
this restatement, which is shown below, is primarily on the Balance
Sheet, with an increase to the right-of-use asset of GBP0.9
million, and a GBP1.0 million increase to the associated lease
liability as of 27 June 2021. The correction to opening reserves of
the remaining GBP0.1 million reflects the net impact on the
Statements of Comprehensive Income in prior periods and relates to
the higher depreciation and interest charges on the larger
right-of-use asset and lease liability respectively.
27 June 2021 Increase/ 27 June 2021
(Decrease) restated
Balance Sheet (extract) GBP'000 GBP'000 GBP'000
Right-of-use assets 23,191 900 24,091
Lease liabilities (26,773) (1,001) (27,774)
------------------------------- ------------- ------------ -------------
Net assets 19,275 (101) 19,174
------------------------------- ------------- ------------ -------------
Retained deficit (5,381) (101) (5,482)
Total equity 19,275 (101) 19,174
------------------------------- ------------- ------------ -------------
Increase/ 28 June 2020
28 June 2020 (Decrease) restated
Balance Sheet (extract) GBP'000 GBP'000 GBP'000
Right-of-use assets 17,283 921 18,204
Lease liabilities (22,933) (971) (23,904)
------------------------------- ------------- ------------ -------------
Net assets 14,996 (50) 14,946
------------------------------- ------------- ------------ -------------
Retained deficit (9,660) (50) (9,710)
Total equity 14,996 (50) 14,946
------------------------------- ------------- ------------ -------------
27 June 2021
27 June 2021 Decrease restated
Statement of Comprehensive
Income (extract) GBP'000 GBP'000 GBP'000
Operating expenses (12,318) (21) (12,339)
Operating profit 5,135 (21) 5,114
------------------------------- ------------- ------------ -------------
Net finance costs (937) (30) (967)
Profit on ordinary activities
before taxation 4,198 (51) 4,147
------------------------------- ------------- ------------ -------------
Profit for the period 4,279 (51) 4,228
------------------------------- ------------- ------------ -------------
28 June 2020
28 June 2020 Decrease restated
Statement of Comprehensive
Income (extract) GBP'000 GBP'000 GBP'000
Operating expenses (28,446) (21) (28,467)
Operating loss (9,154) (21) (9,175)
------------------------------- ------------- ------------ -------------
Net finance costs (1,053) (29) (1,082)
Loss on ordinary activities
before taxation (10,207) (50) (10,257)
------------------------------- ------------- ------------ -------------
Loss for the period (9,493) (50) (9,543)
------------------------------- ------------- ------------ -------------
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
10. INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPRESHENSIVE
INCOME FOR THE 26 WEEK PERIODED 26 JUNE 2022
Unaudited Unaudited
26 weeks ended 26 weeks ended
26 June 27 June
2022 2021
GBP'000 GBP'000
Revenue 17,332 5,342
Cost of sales (2,238) (689)
Gross profit 15,094 4,653
Operating expenses - excluding highlighted items (13,912) (7,265)
Highlighted items 44 325
---------------------------------------------------- --------------- ---------------
Total operating expenses (13,868) (6,940)
Other operating income 90 4,293
Operating profit - excluding highlighted items 1,272 1,681
Highlighted items 44 325
---------------------------------------------------- --------------- ---------------
Operating profit 1,316 2,006
Finance income - 8
Finance cost (615) (497)
Profit before tax and highlighted items 657 1,192
Highlighted items 44 325
---------------------------------------------------- --------------- ---------------
Profit on ordinary activities before taxation 701 1,517
Taxation on ordinary activities (281) 81
Profit for the period 420 1,598
Earnings per share - Basic 1.1 4.1
Adjusted earnings per share - Basic 1.1 3.7
Earnings per share - Diluted 0.9 4.1
Adjusted earnings per share - Diluted 0.9 3.7
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END
IR KELFLLKLBBBF
(END) Dow Jones Newswires
September 26, 2022 02:01 ET (06:01 GMT)
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