TIDMPIER
RNS Number : 7213T
Brighton Pier Group PLC (The)
29 March 2021
29 March 2021
The Brighton Pier Group PLC
(the "Company" or the "Group")
Interim results for the 26 weeks ended 27 December 2020
The Brighton Pier Group PLC today announces its unaudited
results for the 26-week period ended 27 December 2020.
Financial Highlights 26 weeks 26 weeks
ended ended
27 December 29 December
2020 2019
GBPm GBPm
Revenue 8.2 17.3
Group EBITDA before highlighted items 2.6 4.2
Group EBITDA after highlighted items 4.4 4.1
Operating profit before highlighted
items 1.3 2.5
Operating profit after highlighted
items 3.1 2.4
Profit before taxation and highlighted
items 0.8 2.0
Profit before taxation after highlighted
items 2.7 1.8
Net debt at the end of the period 12.5 11.0
Basic earnings per share (with highlighted
items added back) 2.1 4.1p
Basic earnings per share 7.1 3.9p
Diluted earnings per share (with highlighted
items added back) 2.1 4.1p
Diluted earnings per share 7.1 3.9p
*Highlighted items are detailed in note 5 to the financial
statements and relate to gains arising on the extinguishment of
lease liabilities following site disposals (less costs) in the
current period and site pre-opening costs in the prior period.
Commenting on the results, Anne Ackord, Chief Executive Officer,
said:
"We look forward to the reopening of all of our businesses,
following what has been a traumatic time for the whole industry. We
are encouraged by our performance during the relatively short times
when we have been permitted to operate and have full confidence
that the Group is well placed to take advantage of the
opportunities that the anticipated staycation boom will present,
along with the expected pent-up retail spend.
We are pleased to note that the combination of the strong summer
trading in the Pier and Golf coupled with the receipt of interim
business interruption payments have resulted in earnings before tax
44% ahead of the same period last year."
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 609361
John Smith, Chief Financial Officer Tel: 020 7376 6300
Cenkos Securities plc (Nominated Adviser
and Broker)
Stephen Keys (Corporate Finance) Tel: 0207 397 8926
Callum Davidson (Corporate Finance) Tel: 0207 397 8923
Michael Johnson (Sales) Tel: 0207 397 1933
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 (the 'Group') owns and trades
Brighton Palace Pier, as well as nine premium bars nationwide and
eight indoor mini-golf sites.
The Group operates as three separate divisions under the
leadership of Anne Ackord, the Group's Chief Executive Officer.
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. The attractions, product offering and layout of the
pier are focused on creating a family-friendly atmosphere that aims
to draw a wide demographic of visitors. The pier is free to enter,
with revenue generated from the pay-as-you-go purchase of products
from the fairground rides, arcades, hospitality facilities and
retail catering kiosks. According to Visit Britain, it is the fifth
most popular free attraction in the UK, with over 4.9 million
visitors in 2019, making it the UK's most visited landmark outside
of London.
The Group's Bars division comprises of nine sites trading under
a variety of concepts including Embargo Republica, Lola Lo, Le Fez,
Lowlander, and Coalition. This division predominantly targets a
customer base of sophisticated students' midweek and stylish
over-21s and professionals at the weekend. This division focuses on
delivering added value to its customers through premium product
ranges, high quality music and entertainment, as well as a
commitment to exceptional service standards.
The Golf division (Paradise Island Adventure Golf) operates
eight indoor mini-golf sites at high footfall retail and leisure
centres. The business capitalises on the increasing convergence
between retail and leisure, offering an accessible and traditional
activity for the whole family. The first unit was opened in
Glasgow, after which followed Manchester, Sheffield, Livingston,
Cheshire Oaks, Derby, Rushden Lakes and Plymouth Drake's Circus
(opened in October 2019). Each site offers two unique 18-hole
mini-golf courses.
Business review
This business review covers the trading results for the 26 weeks
ended 27 December 2020 (2019: 26 weeks ended 29 December 2019).
Overview
The results for the half year were dominated by challenges
presented to the Group following the outbreak of the COVID-19
pandemic in early 2020.
This trading period began during the first national lockdown,
with nearly all of the Group's businesses closed. In July 2020, the
restrictions of the first lockdown were eased such that the Group
was able to partially reopen certain of its businesses. The key
challenge in terms of re-opening was to resume its usual business
activities, having regard on the one hand for the newly-imposed
government restrictions in order to provide a safe environment for
all staff and customers, whilst on the other hand continuing to
entertain visitors in a way that was as familiar and enjoyable as
previously.
The Group was delighted when Brighton Palace Pier, six of the
golf sites and two of the bars reopened on 4 July 2020, with the
remaining two golf sites and soft play on the pier reopening on 24
August 2020. This allowed the Group to trade for most of the summer
period when footfall on the pier is at its peak. This crucial
earnings period for the Group benefited from the warm summer
weather as well as additional support from the government's 'Eat
Out to Help Out' scheme and a reduction in VAT.
Whilst most of the late night bars remained closed, trading for
two open bars, the Pier and Golf divisions continued until the end
of September. Trading for open sites exceeded the Group's
expectations at the time of re-opening, with like-for-like sales at
81% of those during the same 13 weeks in 2019. Splitting this down
by division, the pier traded at 83%, the Golf division at 87% and
the Bars division at 65% compared to the same weeks in the prior
year.
September brought positive news with the High Court judgment
that the Group's 'Marsh resilience' insurance policies in the Bars
and Golf divisions were capable of responding to COVID-19 business
interruption claims. Furthermore, the Group's advisers have
indicated that the Supreme Court ruling on 15 January 2021 does not
change the fundamental principle that these policies can respond to
claims, subject to appropriate discussion and agreement over the
quantum of the arising losses and any applicable policy caps. At
the end of the period, the Group had received from its insurers
interim payments totalling GBP1.4 million in respect of these
losses and these amounts have been recognised in the current period
in other operating income. Whilst these payments do not satisfy the
entirety of the Group's claims, they nevertheless support the
Group's overall liquidity, which continues to be strong and have
contributed to the half-year results. Further payments are expected
as closures continue into the second half of the financial year.
The Group's policies have a maximum indemnity period of 24 months
and are capped at GBP5 million for any one claim, split equally
between the Bars and Golf division.
By the end of September 2020, rising COVID-19 infections
resulted in further restrictions, most notably a 10p.m. 'curfew',
full table service only and mandatory mask wearing. This was then
followed by the introduction of the regional 'Tier' system in
October 2020, which resulted in the closure of both Scottish golf
sites, together with sites in Manchester, Sheffield and Cheshire
Oaks. The 10p.m. terminal hour ensured that the doors of all the
Group's late night bars remained firmly shut, with only Lowlander
in the Bars division still able to trade. The second national
lockdown was then imposed on 5 November for four weeks, with a
brief reopening before Christmas but without the much anticipated
relaxation of restrictions during the Christmas period itself (this
having been withdrawn at the last moment by the government).
The Bars division disposed of three marginal sites during the
period: Smash in Wimbledon and PoNaNa in Bath were both disposed
of, and a third lease for Fez in Cambridge expiring in late
December 2020 was not renewed.
Half year results
Despite the challenges to trading, the Group is pleased to
report profit after highlighted items and before tax up 44% at
GBP2.7 million (2019: GBP1.8 million), benefiting from the income
from business interruption insurance, summer trading (especially at
the pier and golf sites), government support by way of furlough,
grants, rates and VAT reductions, as well as the one-off
extinguishment of lease liabilities from the disposal of three bar
sites.
Group profit before tax and highlighted items was down 59% at
GBP0.8 million (2019: GBP2 million). This excludes the GBP1.9
million of one-off gains arising from disposal of the bar sites.
The year-on-year reduction reflects the impact of COVID-19 closures
across all divisions, mitigated by additional income described
above
Total Group revenue for the period was down 53% at GBP8.2
million (2019: GBP17.3 million).
Revenue for the Pier division was at 73% of the prior period at
GBP5.8 million (2019: GBP7.9 million), trading especially well
given the impact of closures, loss of overseas tourists and only 19
weeks when all the pier's attractions were able to be open. Gross
margin and spend per head were both up, which went some way to
mitigate the impact of COVID-19. With like-for-like sales for the
13-week period to the end of the summer at 81%, the Group is
confident that the pier's trading will return strongly when trading
resumes once again this coming summer.
Revenue for the Bars division was at 11% of the prior period at
GBP0.7 million (2019: GBP6.6 million). With nearly all the Bars
estate closed throughout the period, these sales came from the two
food-led operations. Lowlander in Covent Garden was impacted by the
closure of theatres and non-essential retail, together with the
loss of foreign tourists and many office staff working from home.
However, launches of a take-away offer and a 'Supper Club' were
well received at Lowlander and both initiatives will return once
re-opening is possible in the second half. July 2020 saw the launch
of the new 'La Plage' restaurant on the beach terrace of Coalition
in Brighton, which proved to be a great success throughout the
summer, and this too will be opening again as soon as possible in
the second half.
Revenue for the Golf division was at 59% of the prior period at
GBP1.7 million (2019: GBP2.8 million) despite only five clear weeks
when all its sites were open. Different opening rules in Scotland,
together with Tier rules in the Midlands and North West, all
resulted in many sites being closed. Sales were boosted by the new
site at Plymouth Drake's Circus, which opened for the first time at
the end of October 2019 in the prior year. With like-for-likes
sales on open sites for the 13-week period to the end of the summer
at 87% of the same period last year, the Group is confident the
golf sites will also re-open strongly when able to do so.
Group gross margin for the period increased by 230 basis points
to 86.7% (2019: 84.4%) reflecting the high-margin nature of the
growing Golf division, as well as focus on the pier to improve
margin during the summer trading as a mitigation against reduced
volume, all of which was offset by the continued closure of the
better margin, wet-led late night bars.
Highlighted items totalling GBP1.9 million of gains (2019:
GBP0.1 million of expenses) were recognised during the period.
These gains arise on the extinguishment of lease liabilities
following disposal of three sites in the Bars division: PoNa Na in
Bath, Fez in Cambridge and Smash in Wimbledon. The disposal of
these marginal sites will, in the long run, reduce overhead costs
and improve the profitability of the Bars division.
In summary, for the 26 weeks ended 27 December 2020 (compared to
the equivalent 26-week period ended 29 December 2019):
-- Revenue: GBP8.2 million (2019: GBP17.3 million)
-- Group EBITDA before highlighted items: GBP2.6 million
(2019: GBP4.2 million)
-- Group EBITDA after highlighted items: GBP4.4
million (2019: GBP4.1 million)
-- Operating profit before highlighted items: GBP1.3 million
(2019: GBP2.5 million)
-- Operating profit after highlighted items: GBP3.1
million (2019: GBP2.4 million)
-- Profit before tax and highlighted items: GBP0.8
million (2019: GBP2.0 million)
-- Profit before tax and after highlighted items: GBP2.7
million
(2019: GBP1.8 million)
-- Net debt at the end of the period: GBP12.5
million (2019: GBP11.0 million)
-- Basic earnings per share (with highlighted items added back): 2.1p
(2019: 4.1p)
-- Basic earnings per share: 7.1p (2019: 3.9p)
-- Diluted earnings per share (with highlighted items added back): 2.1p
(2019: 4.1p)
-- Diluted earnings per share: 7.1p (2019: 3.9p)
Principal developments during the period
The Group's key performance indicators are focused on the
continued expansion of the Group to drive revenues, EBITDA and
earnings growth. The impact of closures from COVID-19 were
mitigated by summer trading in the Pier and Golf divisions, as well
as interim business interruption insurance payments received during
the period amounting to GBP0.5 million in the Bars division and
GBP0.9 million in the Golf division.
Group EBITDA after highlighted items is up 8% at GBP4.4 million
(2019: GBP4.1 million).
Basic earnings per share after highlighted items is up 3.2p at
7.1p (2019: 3.2p)
-- Pier division - EBITDA for the 26 weeks is down GBP1.0
million versus the prior period at GBP0.8 million (2019: GBP1.8
million), benefiting from summer trading, the 'Eat Out to Help Out'
scheme and VAT reductions.
-- Bars division - Bars EBITDA for the 26 weeks is down GBP0.8
million versus the prior period at GBP0.5 million (2019: GBP1.3
million), with most of the Bars estate unable to trade, offset by
the receipt during this period of GBP0.5 million of interim
business interruption insurance payments.
-- Golf division - EBITDA for the 26 weeks is up GBP0.2 million
versus the prior period at GBP1.6 million (2019: GBP1.4 million),
benefiting from summer trading and the receipt during this period
of GBP0.9 million of interim business interruption insurance
payments.
Group operating profit before highlighted items was GBP1.3
million (2019: GBP2.5 million) and Group operating profit for the
period after highlighted items was GBP3.1 million (2019: GBP2.4
million).
Results for the half year show that the Group continued to be
cash-generative with an increase of GBP1.6 million (2019: a
reduction of GBP0.5 million) during the period in cash and cash
equivalents.
On 14 August 2020, with the majority of the late night bars
still closed, the Group completed a process to serve notice on all
but essential staff in the Bars division, with most of these
redundancies completed by the end of September 2020. The Group was
forced to take this action because, at that time, the Government
had yet to commit to extending the Coronavirus Job Retention Scheme
beyond its original end date of 31 October.
Cash flow and balance sheet
Net cash flow generated from operations and available for
investment (after interest and tax payments) was GBP2 million
(2019: GBP3.5 million).
In order to conserve cash during the period, there has been
minimal capital expenditure across the Group (2019: GBP1.3
million).
During the period, the Group made net debt repayments of GBP0.1
million (2019: GBP1.6 million).
Total bank debt at the end of the period was GBP16.7 million
(2019: GBP13.2 million), comprising of a GBP11.8 million term loan
and two Coronavirus Business Interruption Loans totalling GBP4.9
million.
At the period end, cash and cash equivalents were GBP4.2 million
(2019: GBP2.2 million).
Net debt at the period end stood at GBP12.5 million (2019:
GBP11.0 million). The Directors continue to take a cautious
approach to net debt levels for the Group.
During the period, the net debt of the business has reduced by
GBP1.7million from GBP14.1 million as at 28 June 2020 to GBP12.4
million as at 27 December 2020.
The Group currently has an undrawn RCF facility of GBP1.75
million, giving cash availability to the Group of GBP6 million as
at the period end.
Outlook
Short to medium term strategy
The closure of all the Group's businesses on Boxing Day will
impact the full year to the end of June 2021 and potentially into
the first half of the next financial year whilst the Bars division
returns to normal.
In the short to medium term, the key aim for the business is to
focus on reopening as soon as the Group is able, in accordance with
the recently announced roadmap, and to return all three divisions
to pre-COVID-19 levels of trade. Planning for this is already well
advanced.
Whilst there may be some significant opportunities over the
summer, with customers who have accumulated savings during the
lockdown periods also expected to take 'staycations' rather than
travel internationally, such opportunities may be tempered by the
pace of reopening if infections start to surge.
Pier division
The Group now expects the outside areas of the pier to reopen
for trade on 12 April 2021. The pier's large outside spaces make it
possible to provide plenty of space for tables serviced from the
restaurant, bars and take-away venues.
Bars division
'Coalition' in Brighton is expected to reopen on 12 April 2021
for take-away, with the external 'La Plage' outside beach terrace
restarting from 17 May 2021.
'Lowlander' in Covent Garden will reopen its doors from 17 May
2021 .
Finally, the remainder of the late night bars are expected to
reopen on 21 June 2021, some 15 months after they closed for the
first lockdown.
New government support for the hospitality and leisure sector,
outlined in the March 2021 budget, will provide much-needed
financial assistance to help the reopening process, with reductions
in VAT, extended rates relief and extended furlough combining with
the existing grants system and new restart grants.
Golf division
The Golf sites are all expected to reopen from 17 May 2021 (it
is expected the Scottish sites will also reopen around this time
but formal confirmation is still pending). The online booking
system introduced last year will continue to assist us with queue
management and customer data collection.
Longer term: new acquisitions and developments
The longer-term strategy of the Group continues to be to
capitalise on its skills to create a growth company operating
across a diverse portfolio of leisure and entertainment assets in
the UK. The Group will achieve this objective by way of organic
revenue growth across the whole estate, together with the active
pursuit of future potential strategic acquisitions of leisure and
entertainment destinations (many of which have been significantly
impacted by the pandemic) that could enhance the Group's portfolio,
realising synergies by leveraging scale. It is the Board's
longer-term strategy to position the Group as a consolidator within
this sector.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
27 December 29 December 28 June
2020 2019 2020
Notes GBP'000 GBP'000 GBP'000
Revenue 8,199 17,331 22,621
Cost of sales (1,092) (2,713) (3,329)
Gross profit 7,107 14,618 19,292
Operating expenses - excluding highlighted items (7,244) (12,127) (20,329)
Highlighted items 5 1,856 (110) (8,117)
------------------------------------------------------- ------ ------------ ------------ ---------
Total operating expenses (5,388) (12,237) (28,446)
Other operating income 6 1,400 - -
Operating profit/(loss) - before highlighted items 1,263 2,491 (1,037)
Highlighted items 5 1,856 (110) (8,117)
------------------------------------------------------- ------ ------------ ------------ ---------
Operating profit/(loss) 3,119 2,381 (9,154)
Finance income 16 - 18
Finance cost (479) (535) (1,071)
Profit/(loss) before tax and highlighted items 800 1,956 (2,090)
Highlighted items 5 1,856 (110) (8,117)
------------------------------------------------------- ------ ------------ ------------ ---------
Profit/(loss) on ordinary activities before taxation 2,656 1,846 (10,207)
Taxation on ordinary activities 7 - (389) 714
Profit/(loss) for the period 2,656 1,457 (9,493)
Earnings/(loss) per share - Basic* 8 7.1 3.9 (25.5)
Adjusted earnings/(loss) per share - Basic** 8 2.1 4.1 (5.3)
Earnings/(loss) per share - Diluted 8 7.1 3.9 (25.5)
Adjusted earnings/(loss) per share - Diluted 8 2.1 4.1 (5.3)
* 2020 basic weighted average number of shares in issue was 37.29m (Dec 2019: 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 (2019: GBPnil ).
INTERIM CONDENSED CONSOLIDATED BALANCE SHEET
As at As at As at
27 December 29 December 28 June
2020 2019 2020
GBP'000 GBP'000 GBP'000
Non current assets
Intangible assets 9,428 12,665 9,467
Property, plant & equipment 25,161 27,753 25,763
Right-of-use assets 16,682 21,402 17,283
Net investment in finance leases 698 - 689
Other receivables due in more than one
year 276 367 367
52,245 62,187 53,569
------------ ------------ --------
Current assets
Inventories 520 648 562
Trade and other receivables 1,587 793 1,926
Cash and cash equivalents 4,246 2,212 2,649
6,353 3,653 5,137
------------ ------------ --------
TOTAL ASSETS 58,598 65,840 58,706
============ ============ ========
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 452 428 452
Retained (deficit)/earnings (7,004) 1,290 (9,660)
Equity attributable to equity shareholders
of the parent 17,652 25,922 14,996
------------ ------------ --------
TOTAL EQUITY 17,652 25,922 14,996
------------ ------------ --------
LIABILITIES
Current liabilities
Trade and other payables 3,716 3,734 3,945
Other financial liabilities - current 2,214 2,823 -
Lease liabilities - current 2,105 1,632 2,250
Income tax payable - 712 35
Provisions - 9 -
8,035 8,910 6,230
------------ ------------ --------
Non-Current liabilities
Other financial liabilities - non-current 14,490 10,342 16,797
Lease liabilities - non-current 18,421 20,240 20,683
Deferred tax liability - 426 -
32,911 31,008 37,480
------------ ------------ --------
TOTAL LIABILITIES 40,946 39,918 43,710
------------ ------------ --------
TOTAL EQUITY AND LIABILITIES 58,598 65,840 58,706
============ ============ ========
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
Issued
share Other Merger Retained Total shareholders'
capital Share Premium reserves reserve (deficit)/earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- --------- -------------- ---------- --------- -------------------- --------------------
At 29 June 2020 9,322 15,993 452 (1,111) (9,660) 14,996
------------------- --------- -------------- ---------- --------- -------------------- --------------------
Profit for the
period - - - - 2,656 2,656
As at 27 December
2020 9,322 15,993 - (1,111) (7,004) 17,652
------------------- --------- -------------- ---------- --------- -------------------- --------------------
Issued Retained
share Other Merger (deficit)/ Total shareholders'
capital Share Premium reserves reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- --------- -------------- ---------- --------- ------------ --------------------
At 1 July 2019 9,322 15,993 407 (1,111) (167) 24,444
---------------------- --------- -------------- ---------- --------- ------------ --------------------
Profit for the
period - - - - 1,457 1,457
Transactions with
owners
Share based payments
charge - - 21 - - 21
As at 29 December
2019 9,322 15,993 428 (1,111) 1,290 25,922
---------------------- --------- -------------- ---------- --------- ------------ --------------------
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
26 weeks to 26 weeks to 52 weeks to
27 December 29 December 28 June
2020 2019 2020
GBP'000 GBP'000 GBP'000
Operating activities
Profit/(loss) before tax 2,656 1,846 (10,207)
Net finance costs 463 535 1,053
Amortisation of intangible assets 39 67 84
Impairment of goodwill - - 3,209
Depreciation of property, plant and equipment 625 710 1,528
Impairment of property, plant and equipment - - 1,408
Depreciation of right-of-use assets 625 901 1,860
Impairment of right-of-use assets - - 3,463
Gain on recognition of sub-leased property - - (40)
Gain on extinguishment of lease liabilities (1,896) - -
Gain on waiver of lease liabilities (565)
(Profit)/loss on disposal of property, plant and equipment and assets
held for sale (1) - 10
Share-based payment expense - 21 45
Decrease in provisions and deferred tax - (70) (54)
Decrease/(increase) in inventories 42 (24) 62
Decrease/(increase) in trade and other receivables 447 277 (819)
(Decrease) in trade and other payables (253) (309) 58
Interest paid on borrowings (150) (134) (398)
Interest paid on lease liabilities (28) (331) (673)
Interest received 7 - 1
Income tax paid (52) (29) (28)
Net cash flow from operating activities 1,959 3,460 562
------------ ------------ ------------
Investing activities
Purchase of property, plant and equipment, and intangible assets (36) (1,312) (1,585)
Interest received on finance lease receivables - - 18
Capital element received on finance leases - - 50
Settlement of deferred consideration - (354) (354)
Proceeds from disposal of property, plant and equipment 11 - -
Net cash flows used in investing activities (25) (1,666) (1,871)
------------ ------------ ------------
Financing activities
Proceeds from borrowings - 1,400 6,750
Repayment of borrowings (85) (3,035) (4,785)
Principal paid on lease liabilities (252) (672) (732)
Net cash flows generated used in financing activities (337) (2,307) 1,233
------------ ------------ ------------
Net decrease in cash and cash equivalents 1,597 (513) (76)
Cash and cash equivalents at beginning of period 2,649 2,725 2,725
Cash and cash equivalents at period end date 4,246 2,212 2,649
============ ============ ============
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
1. GENERAL INFORMATION
The Brighton Pier Group PLC 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 9 premium bars, and the operator of 8
indoor adventure golf facilities trading in major towns and cities
across the UK.
The principal accounting policies adopted by the Group are set
out in Note 2.
2. ACCOUNTING POLICIES
The financial information for the six months ended 27 December
2020 and 29 December 2019 does not constitute statutory accounts
for the purposes of section 435 of the Companies Act 2006 and has
not been audited. The Group's latest statutory financial statements
were for the 52 weeks ended 28 June 2020 and these have been filed
with the Registrar of Companies.
Information that has been extracted from the June 2020 accounts
is from the audited accounts included in the annual report,
published in November 2020, 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.
The interim condensed consolidated financial statements for the
26 weeks ended 27 December 2020 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 28 June 2020, which were
prepared in accordance with IFRS as adopted by the European
Union.
The accounting policies used in preparation of the financial
information for the six months ended 27 December 2020 are the same
accounting policies applied to the Group's financial statements for
the 52 weeks ended 28 June 2020. These policies were disclosed in
the 2020 Annual Report and are in accordance with IFRS as adopted
by the European Union.
3. GOING CONCERN
Whilst the COVID-19 restrictions and closures impacted the
Group's operations in the 26 week period ended 27 December 2020,
the cash impact of these restrictions have been mitigated by
positive trading during the summer months in the Golf and Pier
divisions and from business interruption payments totalling GBP1.4
million.
Further closures during the second half of FY2021 have already
taken place. Based on The Prime Minister's 'roadmap' for reopening,
announced on 22 February 2021 , these closures are expected to
continue until 12 April 2021 after which staged relaxations of
restrictions predict some return to normality by the middle of June
2021. After this date, a very large proportion of the UK population
will have been vaccinated and most restrictions are planned to be
lifted. These restrictions will therefore impact trading in the
second half of FY2021 and will impact the Group's remaining late
night bars until they have fully reopened, which is expected to
happen during the first half of FY2022. Further business
interruption insurance payments are expected to offset some of
these impacts.
Despite the closures, the Group generated positive earnings
before interest, tax, depreciation and amortisation ("EBITDA") for
the 26-week period ended December 2020, improving earnings on the
same period last year. The Group has benefited from interim
business interruption insurance payments and one-off gains arising
from the extinguishment of lease liabilities on sites disposed
during the period. The cash available to fund the Group increased
by GBP1.6 million during the period.
The Group's experience from lockdown last summer suggests that
trade in the Pier and Golf divisions may pick up quickly as they
reopen. Reopening of these divisions is expected to take place in
April and May 2021 respectively. The Directors consider that this
busy trading period, albeit below normal levels, together with
existing cash reserves currently held by the business of GBP4.2
million, the availability of the currently undrawn Revolving Credit
Facility of GBP1.75 million and further business interruption
insurance payments will adequately meet the Group's cash
requirements for the next 12 months.
The Directors and management of the business have reviewed the
Group's detailed forecast cash flows for the forthcoming twelve
months from the date of publishing this announcement. The Directors
believe the Group will have sufficient cash resources available to
meet its liabilities as they fall due. These cash flow forecasts
and re-forecasts are prepared regularly as part of the business
planning process. These have been analysed in the light of the
closures since Christmas, subjected to stress testing, scenario
modelling and sensitivity analysis, which the Directors consider
sufficiently robust.
As part of this assessment, the Directors performed a "stress
test" in order to model a scenario to identify the adequacy of the
Group's cash resources as a whole to fund all of the various parts
of the Group for the next twelve months. This scenario modelled the
Pier and Golf divisions reopening in May 2021 and most of Bars
division not re-opening until August 2021 (with the exception of
the two food-led businesses, Lowlander in Covent Garden and
Coalition in Brighton, which are modelled to reopen earlier). This
scenario included other critical assumptions specifically in
relation to the Group including:
That the Pier and Golf divisions;
-- remain closed to the end of April 2021, missing out on the Easter trading period,
-- gradually reopen in May 2021, trading at 85% of normal sales
to the end of June 2021 and then returning to pre-COVID levels from
July 2021 onwards and remaining fully open thereafter,
-- keep most staff on furlough until the end of April 2021
during the period of lockdown except for security and essential
maintenance, with continuing support from the Coronavirus Job
Retention Scheme,
-- receive further business interruption insurance payments in the Golf division, and
-- benefit from no other mitigations to further reduce direct
operational costs or other fixed overheads once reopened.
That the Bars division;
-- late night bars remain closed to the end of July 2021,
reopening in August 2021 at 40% of pre-COVID sales which gradually
return to pre-COVID levels over the following five months to the
end of December 2021,
-- Lowlander reopens in May 2021, trading at 50% through the
summer and thereafter gradually returning to pre-COVID sales levels
by December 2021,
-- Coalition reopens in April 2021 - trading the terrace and
providing takeaway at 50% of pre-COVID sales in April, 50% in May,
60% in June, then 80% through July to September before dropping
back to 60% for the post-summer season and trading in line with the
remaining estate thereafter,
-- retains only essential management who remain on furlough to
the end of July 2021, with continuing support from the Coronavirus
Job Retention Scheme,
-- receives further business interruption insurance payments, and
-- benefits from no further mitigations to further reduce direct
operational costs or other fixed overheads once reopened.
Recent announcements in the budget on the extended rates relief
holiday for hospitality and leisure, continuing VAT reductions to
5% on food and admission income to the end of September 2021,
increasing to 12.5% until the end of March 2022, together with
restart grants will further improve the Group's position over the
coming months.
This stress test shows that the Group as a whole has adequate
resources to continue to trade, despite these extended closures.
Furthermore, until the December 2021 quarter, the Group's bank has
waived all existing covenant tests, and introduced a new monthly
minimum liquidity test that is triggered when the Group's cash
resources fall below GBP1.75 million. Even under the stress test
scenario, the Group's forecast shows significant headroom on the
liquidity test throughout the forecast period to the end of June
2022 and full compliance with all covenants that are currently
scheduled to restart from December 2021 onwards.
These tests, prepared at the time of two new CBIL's in September
2020, assume that all the Group's trading operations will have been
open for the prior twelve months. However, if closures in the Bars
division were to extend beyond the stress test assumptions into
September 2021 or if stages in the roadmap are extended resulting
in delays to the re-opening of the Pier or the Golf, then given the
sensitivity of these covenant tests, it is possible that a breach
could occur in December 2021 if the tests were applied with no
modifications. Even with extended closure of the Bars or delays in
the re-opening roadmap to the end of July 2021, the liquidity test
would not be breached.
Nevertheless, the Directors believe that given the low levels of
leverage, the asset-backed nature of the debt and the level of cash
that is forecast to be available at the end of summer 2021,
renegotiated covenant levels could be agreed with the bank to take
into account the loss of cash flow during the forced extended
closures.
Whilst stress testing the business is important given the
unprecedented nature of the events surrounding COVID-19, the
Directors expect the Group to continue to meet its day-to-day
working capital requirements from the cash flows generated by its
trading activities, loan facilities with its bank as well as cash
resources available to it throughout the three divisions should
they be required. Accordingly, these financial statements have been
prepared on the going concern basis.
4. 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 26 week period ended
27 December 2020, 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.
December
26 week period ended 27 Brighton Total 2020 consolidated
December 2020 Bars Pier Golf segments Overhead total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- -------- --------- -------- ---------- --------- -------------------
Revenue 728 5,811 1,660 8,199 - 8,199
Cost of sales (229) (852) (11) (1,092) - (1,092)
--------------------------------- -------- --------- -------- ---------- --------- -------------------
Gross profit 499 4,959 1,649 7,107 - 7,107
Gross profit % 68% 85% 99% 87% - 87%
Operating expenses (excluding
depreciation and amortisation) (526) (4,141) (904) (5,571) (383) (5,954)
Other income 500 - 900 1,400 - 1,400
Highlighted items 1,856 1,856
Depreciation and amortisation
(excluding right-of-use
assets) (664) (664)
Depreciation of right of
use assets (625) (625)
Net finance cost (excluding
interest on lease liabilities) (135) (135)
Net finance cost arising
on lease liabilities (329) (329)
Profit/(loss) before tax 473 818 1,645 2,936 (280) 2,656
Income tax - - - - - -
--------------------------------- -------- --------- -------- ---------- --------- -------------------
Profit/(loss) after tax 473 818 1,645 2,936 (280) 2,655
EBITDA (before highlighted
items) 473 818 1,645 2,936 (383) 2,553
EBITDA (after highlighted
items) 473 818 1,645 2,936 1,473 4,409
--------------------------------- -------- --------- -------- ---------- --------- -------------------
NOTES to the INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
4. SEGMENTAL INFORMATION (continued)
December
26 week period ended Brighton Total 2019 consolidated
29 December 2019 Bars Pier Golf segments Overhead total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- ---------- ---------------- ---------------- ---------------- --------- -------------------
Revenue 6,602 7,936 2,793 17,331 - 17,331
Cost of sales (1,373) (1,294) (46) (2,713) - (2,713)
-------------------------- ---------- ---------------- ---------------- ---------------- --------- -------------------
Gross profit 5,229 6,642 2,747 14,618 14,618
Gross profit % 79% 84% 98% 84% 84%
Operating expenses
(excluding depreciation
and amortisation) (3,893) (4,822) (1,301) (10,016) (432) (10,448)
Highlighted items (110) (110)
Depreciation and
amortisation
(excluding right-of-use
assets) (778) (778)
Depreciation of right
of use assets (901) (901)
Net finance cost
(excluding
interest on lease
liabilities) (204) (204)
Net finance cost arising
on lease liabilities (331) (331)
Profit/(loss) before
tax 1,336 1,820 1,446 4,602 (2,756) 1,846
Income tax - - - - (389) (389)
-------------------------- ---------- ---------------- ---------------- ---------------- --------- -------------------
Profit/(loss) after
tax 1,336 1,820 1,446 4,602 (3,145) 1,457
EBITDA (before
highlighted
items) 1,336 1,820 1,446 4,602 (412) 4,190
EBITDA (after highlighted
items) 1,336 1,820 1,446 4,602 (522) 4,080
-------------------------- ---------- ---------------- ---------------- ---------------- --------- -------------------
5. HIGHLIGHTED ITEMS
26 weeks 26 weeks 52 weeks
ended ended ended
27 December 29 December 28 June
2020 2019 2020
GBP'000 GBP'000 GBP'000
------------------------------------------------------- ------------ ------------ ---------
Acquisition and pre-opening costs
Site pre-opening costs - 110 37
Impairment, closure and legal costs
Impairment of goodwill - - 3,209
Impairment of property, plant and equipment - - 1,408
Impairment of right-of-use assets - - 3,463
Gains arising on extinguishment of lease liabilities (1,896) - -
following disposal of site (note 9)
Other disposal costs 40 - -
Total (1,856) 110 8,117
------------------------------------------------------- ------------ ------------ ---------
5. HIGHLIGHTED ITEMS Continued
The above items have been highlighted to give a better
understanding of non-comparable costs included in the consolidated
income statement for this period.
For the period ended 27 December 2020, gains of GBP1,896,000
arising on extinguishment of lease liabilities relate to the
disposal of sites in the Bars division at Wimbledon, Bath and
Cambridge. The right-of-use assets relating to these sites were
impaired to GBPnil during the period ended 28 June 2020 and are
included in highlighted items for that period. Other disposal costs
of GBP40,000 relate to the site in Bath.
6. OTHER INCOME
The High Court Judgement on 15 September 2020 found that the
Group's 'Marsh resilience' insurance policies in the Bars and Golf
divisions were capable of responding to COVID-19 business
interruption claims. Furthermore, the Group's advisers have
indicated that the Supreme Court ruling on 15 January 2021 does not
change the fundamental principle that these policies can respond to
claims, subject to appropriate discussion and agreement over the
quantum of the arising losses and any applicable policy caps.
As at the end of the period the Group has received from its
insurers initial interim payments totalling GBP1.4 million in
respect of these losses. Whilst these payments do not satisfy the
entirety of the Group's claims, they nevertheless support the
Group's overall liquidity. Further payments are expected as
closures continue into the second half, however the timing and
amounts of these remain uncertain.
The Group's policies have a maximum indemnity period of 24
months and are capped at GBP5 million split equally between the
Bars and Golf division for any one claim.
Since the period end (March 2021) the Group has received a
second tranche of payments on account from its insurers of GBP1.55
million in relation to its COVID-19 business interruption claims in
the Group's Bars and Golf divisions.
During the period the Group received income of GBP1.0 million
from the Government furlough scheme. This has been offset against
staff costs within Operating Expenses in the Statement of
Comprehensive Income.
7. 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 27 June 2021 applied against the profit before tax for the
period ended 27 December 2020. The full year effective tax charge
on the underlying trading profit is estimated to be GBPnil (2019:
GBP0.4 million)
8. EARNINGS PER SHARE
The weighted average number of shares in the period was:
26 weeks to 26 weeks to 52 weeks to
27 December 2020 29 December 2019 28 June
2020
Thousands of shares Thousands of shares Thousands of shares
Ordinary shares 37,286 37,286 37,286
------------------------------------------------ -------------------- -------------------- --------------------
Weighted average number of shares - basic 37,286 37,286 37,286
Dilutive effect on ordinary shares from share
options - - -
------------------------------------------------ -------------------- -------------------- --------------------
Weighted average number of shares - diluted 37,286 37,286 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.
8. EARNINGS PER SHARE continued
26 weeks to 26 weeks to
27 December 2020 29 December 2019 52 weeks to
28 June
2020
Earnings per share from profit for the period
Basic (pence) 7.1 3.9 (25.5)
Diluted (pence) 7.1 3.9 (25.5)
-------------------------------------------------------- ----------------- ----------------- ------------
Adjusted earnings per share from profit for the period
Basic (pence) 2.1 4.1 (5.3)
Diluted (pence) 2.1 4.1 (5.3)
-------------------------------------------------------- ----------------- ----------------- ------------
9. LEASE LIABILITIES
The onset of the COVID-19 pandemic prompted the IASB to issue a
practical expedient to provide relief for lessees from lease
modification accounting for rent concessions related to COVID-19.
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
GBP152,000 within operating expenses in the Statement of
Comprehensive Income for the period ended 27 December 2020.
The practical expedient can only be used for rent concessions
covering the period to 30 June 2021. 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
GBP413,000 within operating expenses in the Statement of
Comprehensive Income during the period ended 27 December 2020.
Lease liabilities of GBP1,896,000 were extinguished during the
period as a result of the disposal of sites in Bath, Cambridge and
Wimbledon.
10. RECONCILIATION TO EBITDA
Group profit before tax can be reconciled to Group EBITDA as
follows:
26 weeks to 26 weeks to 52 weeks to
EBITDA Reconciliation 27 December 2020 29 December 2019 28 June 2020
------------------------------------------------------ ----------------- -------------------------- --------------
Profit before tax for the year 2,656 1,846 (10,207)
Add back depreciation (property plant and equipment) 625 710 1,528
Add back depreciation (right-of-use-assets) 625 901 1,860
Add back amortisation 39 67 84
Add back finance costs of lease liabilities 329 331 -
Add back other finance costs 135 204 1,071
Add back share based payment charge - 21 45
Add back highlighted items (1,856) 110 8,117
------------------------------------------------------ --------------
Group EBITDA before highlighted items 2,553 4,190 2,498
Remove highlighted items 1,856 (110) (8,117)
Add back impairments of:
Goodwill - - 3,209
Property, plant and equipment - - 1,408
Right-of-use assets - - 3,463
Group EBITDA after highlighted items 4,409 4,080 2,461
------------------------------------------------------ ----------------- -------------------------- --------------
11. EVENTS AFTER THE REPORTING PERIOD
In March 2021, the Group received a second tranche of payments
on account from its insurers of GBP1.55 million in relation to its
COVID-19 business interruption claims. These receipts also relate
to claims made in the Group's Bars and Golf divisions.
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END
IR DVLFLFXLBBBF
(END) Dow Jones Newswires
March 29, 2021 02:00 ET (06:00 GMT)
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