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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Brighton Pier Group Plc (the) | LSE:PIER | London | Ordinary Share | GB00BG49KW66 | ORD 25P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 44.50 | 44.00 | 45.00 | 44.50 | 44.00 | 44.50 | 2 | 08:00:09 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Drinking Places (alcoholic) | 34.76M | -7.54M | -0.2021 | -2.20 | 16.59M |
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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