Final Results

RNS Number : 2453N

Brighton Pier Group PLC (The)

23 September 2019

 

The Brighton Pier Group PLC

(the "Group")

Final results for the 52 weeks to 30 June 2019

23 September 2019

The Brighton Pier Group PLC (the Group) owns and trades Brighton Palace Pier, as well as seven indoor mini golf sites and twelve premium bars nationwide including two ping-pong concept bars.

The results for this 52 week period contain the first full year's trading of Paradise Island Adventure Golf (2018: 30 weeks).

Financial Highlights		52 weeks ended 30 June 2019	53 weeks ended 1 July 2018
		£m (unless otherwise stated	£m (unless otherwise stated)ed
Revenue		32.0	31.4
Group EBITDA before highlighted items		5.3	5.2
Group EBITDA after highlighted items		4.8	4.4
Profit before taxation and highlighted items		3.2	3.2
Profit before taxation after highlighted items		2.7	2.3
Adjusted earnings per share - basic		7.3p	7.8p
Adjusted earnings per share - diluted		7.3p	7.6p
Profit after tax and highlighted items		2.2	1.8
Earnings per share - basic		6.1p	5.2p
Earnings per share - diluted		6.1p	5.0p

Pier division highlights

·      Celebrated the 120^th anniversary of the opening of Brighton Palace Pier, in May 2019

·      First full year of trading since the upgrade of the restaurant and bars last year - revenue up 17% year-on-year.

·      Conference and events business up 37% year-on-year

·      Upgrade by Network Rail of the London to Brighton mainline railway complete by May 2019: this will benefit the current year and beyond.

·      Recent structural surveys do not indicate any requirement for exceptional repairs (this was also the case in FY 2018).

Bars division highlights

·      Putney site underwent a full refit and re-opened in November 2018 as 'Le Fez'. The site is trading ahead of expectations and won a "Best in Putney customer service award for 2019".

·      Successful disposal of the freehold interest in Derby for gross proceeds of £800,000.

·      Successful sub-let of Reading Coalition, completing the bars rationalisation process.

Golf division highlights

·      First full year under the Group's ownership and trading in line with expectations at the time of the acquisition.

·      One new Golf site was opened at Rushden Lakes in March 2019 and is trading ahead of expectations.

·      Further site due to open at Drake's Circus in Plymouth in October 2019.

 

·     

Commenting on the results, Anne Ackord, Chief Executive Officer, said:

"It was a pleasure to welcome the national tourist boards to the pier to celebrate the 120^th anniversary of its opening. The pier has benefited hugely from the new investment in the transformed Horatio's Bar and Palm Court restaurant-but of equal importance has been the continued investment in the structure over the last 6 years. This continued investment will ensure that this landmark venue will be there for future generations to enjoy for another 120 years.

The re-opening of our venue in Putney as 'Le Fez' in November last year has been an outstanding success for the Bars Division and the management team at the club.

Our new golf site opening at Rushden Lakes, the first since our purchase of Paradise Island Adventure Golf last year, has performed beyond expectations and we are looking forward to our next opening at Drake's Circus in Plymouth later this year.

I am delighted that the Group has delivered growth in both sales and earnings."

Trading for the Group during the important first two months of the current financial year - July and August 2019 - met budget.  Consequently, we remain confident of our prospects."

All Group announcements and news can be found on www.brightonpiergroup.com.

Enquiries:
The Brighton Pier Group	Tel: [phone]
Luke Johnson, Chairman	Tel: [phone]
Anne Ackord, Chief Executive Officer	Tel: [phone]
John Smith, Chief Financial Officer	Tel: [phone]
Panmure Gordon (UK) Limited (Nominated Adviser and Joint Broker)	Tel: [phone]
Corporate Finance
Atholl Tweedie
Corporate Broking
Charles Leigh-Pemberton
Arden Partners plc (Joint Broker)	Tel: [phone]
Corporate Finance
John Llewellyn-Lloyd / Benjamin Cryer
Investor Relations
Sarah-Jane Woodcock / Charlotte Ridler

Chairman's statement

This financial year marks another milestone in the life of Brighton Palace Pier with the celebration in May 2019 of its 120^th anniversary.  This iconic structure is part of Brighton's heart and we at The Brighton Pier Group are proud to be its current custodian.  Since our acquisition of the pier in 2016, we have spent nearly £2 million maintaining its substructure and this year's annual structural report has confirmed that the steelwork under the deck is in its best condition for many years. Our investment will ensure the future of this landmark for many years to come.

Since the acquisition, we have invested a further £2.9 million on capital projects such as the full refit of the bars and catering facilities, soft play in the Dome, the new Dolphin Derby, new machines for the arcades, new children's rides and new catering offers such as pizza, rice & noodles, frozen yogurts and new fish and chip takeaway shops for the busier periods.

This year's results show in particular the impact of last year's investment in the upgrades to the Palm Court restaurant and Horatio's Bar with sales up 17% versus the prior period. In addition, we have seen significant growth in the conference and events business with 27 additional events and £162,000 additional revenue versus the prior year.  This result is impressive given the challenging weather last summer and train cancellations throughout most of the 2019 financial year.

It was good to see the London to Brighton mainline upgrades complete on time at the start of May 2019, but the 30 days of closures, mostly over the weekends and key half term periods, during the Group's 2019 financial year impacted the whole of Brighton. This disruption, coupled with poor weather (including over the key bank holiday weekend early in the last financial year) was disappointing. The Pier Division increased sales in its interior businesses (arcades and catering) by £0.6 million; however, its exterior businesses (rides and retail) were disrupted or closed by high winds and rain, reducing revenue from higher margin offerings and resulting in a disproportionate effect on the division's overall EBITDA (down £0.3 million versus last year).

The Golf Division completed its first full year inside the Group, delivering EBITDA of £1.5 million; these results are in line with expectations at the time we acquired the business.  It was a pleasure to see the construction of our first new site at Rushden Lakes opening on time and on budget.  This venue is trading ahead of expectations and reflects the impressive variety of indoor and outdoor leisure activities at this location which is driving good footfall to this new development. Work has now also started on our second site at Drake's Circus in Plymouth, which is scheduled to open in October 2019.

The highlight for the Bars Division this year was the successful refit at Putney: although delayed by unexpected problems during the construction period, this is now open and trading ahead of expectations.  The new 'Le Fez' is experimenting with activity-led sessions such as bingo and comedy nights.  On the weekends, we have added live entertainment with singing waitresses, dancers and more: adding content that gives Saturday nights a special party feel.

The Bars Division has also now completed its rationalisation programme: our Derby freehold site was sold for £800,000 and we have completed the sub-let of Reading Coalition.  This brings the total sites disposed from the Bars Division over the last three years to nine. Although these disposals and closures have impacted sales in the short term, they have improved profitability.  The Group does not envisage any further closures next year.  The remaining bars estate comprises twelve cash-generating sites, all situated in prime locations.

The leisure and hospitality industry continues to have its challenges-and this year has continued to see cost inflation, additional taxes and intense competition.  However, your board continues to believe that The Brighton Pier Group remains well placed to take advantage of opportunities throughout the sector.  We have a well-invested and diversified portfolio of experiential attractions in good locations.  Overall, the Group will continue to generate cash and repay its borrowings.

It was especially pleasing therefore to see EBITDA and profit before tax after highlighted items up 8% and 19% respectively since the prior period.

Outlook for the current year will benefit from the completion of the railway upgrades on the London mainline route to Brighton, as well as the good weather on the August bank holiday weekend, which both contributed to the Pier achieving a record week and meeting expectations for the summer. FY 2020 will be enhanced by full the year impact of Putney 'Le Fez' and the Golf course at Rushden Lake together with the new opening in October 2019 of Plymouth Drake's Circus.

As promised at the time of the publication of the 2018 full year results in November 2018, I exercised my warrant in full at a cost of 60 pence per share: this brought proceeds of almost £1 million into the Group and increased my shareholding to 27% of the enlarged share capital.

We have a strong team at The Brighton Pier Group and believe we are well-placed to take advantage of growth opportunities as they arise.

Directorate

Following the resignations during the year of Joe Tager (January 2019) and Leigh Nicolson (March 2019), I would like to express on behalf of the whole Group our gratitude for all their valuable efforts and contributions that helped to bring the Group to where it is today.

Dividend

The Board does not propose to pay any dividend in respect of the 2019 financial year.

Luke Johnson

Chairman

22 September 2019

Our business model

The Brighton Pier Group PLC (the 'Group') owns and trades Brighton Palace Pier, as well as twelve premium bars nationwide (including two ping-pong concept bars) and seven 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 2018, making it the UK's most visited landmark outside of London.

The bars trade under a variety of concepts including Embargo Republica, Lola Lo, PoNaNa, Le Fez, Lowlander, Smash (two ping-pong concept bars) and Coalition. The Group's Bars 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 Bars estate is nationwide, incorporating key university cities and towns that provide a vibrant night-time economy and the demographics to support premium bars.

The Golf division (Paradise Island Adventure Golf) operates seven 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, and Rushden Lakes (2019). Each site offers two unique 18-hole mini-golf courses.

Chief Executive Officer's report

This business review covers the trading results for the 52 weeks ended 30 June 2019 (2018: 53 weeks ended 1 July 2018).

The Group acquired the Golf division on 8 December 2017 and, as a result, the 2018 comparative period consists of only 30 weeks of trade from this division.

Full-year results

The Group reports continuing profitability with profit before tax and highlighted items of £3.2 million (2018: £3.2 million).

Total Group revenue for the period was £32.0 million (2018: £31.4 million), up £0.6 million on the prior period, benefitting from the acquisition of Paradise Island Adventure Golf, which has contributed £4.5 million of sales in the 52 weeks of trading (2018: £2.2 million). We are pleased to report the Golf business continues to trade in line with expectations at the time of purchase.

Revenue for the Pier division was £14.7 million (2018: £14.5 million), up on the prior period by £0.2 million. The newly fitted bars and catering facilities combined have out-performed the prior year, with sales for Palm Court and Horatio's Bar up 17% versus the prior period, partly due to growth in the functions business and partly due to the closures for the refits during the prior period. The Arcades were also up 3% but across the rest of the pier (primarily from rides and retail) sales were down 5.3%) versus the like period, hindered by poor weather and reduced numbers of visitors to Brighton resulting from a sustained period of weekend closures of the mainline railway from London.

Revenue for the Bars division was £12.8 million (2018: £14.7 million), down £1.9 million for the period. £0.5 million of this decrease related to the planned closure of Putney Fez for its refit, £0.4 million from the closure of Reading Coalition, and £0.3 million from the extra weeks trading from the 53 week period. As reported in the Group's January 2019 trading update, Christmas trading across the bars was broadly flat year-on-year but conditions have otherwise been challenging in parts of the estate; these factors have impacted sales by £0.7 million versus the 2018 period.

Group gross margin for the period has increased by 150 basis points in comparison with the 2018 period, reflecting the high-margin nature of the acquired Golf division, together with a continued focus on pricing in order to mitigate pressure from rising input costs across the rest of the Group.

Highlighted costs totalling £0.6 million were incurred during the period (2018: £0.9 million), of which £0.4 million related to occupation and other pre-opening expenses incurred during the redevelopment of 'Le Fez' in Putney and the opening of a new golf site at Rushden Lakes. A further £0.2 million was incurred in connection with the closure of Reading Coalition, the disposal of Derby and redundancy costs during the period.

The Group continues to be highly cash generative with EBITDA before highlighted items at £5.3 million (2018: £5.2 million) (see Note 3 for the segmental split by division).

The tax charge for the current period was £0.4 million (2018: £0.5 million).

In summary, for the 52-week period ended 30 June 2018 (compared to the equivalent 53-week period ended 1 July 2018):

·      Revenue for the period                                                               £32.0 million          (2018: £31.4 million)

·      Group EBITDA before highlighted items                                 £5.3 million            (2018: £5.2 million)

·      Group EBITDA after highlighted items                    £4.8 million            (2018: £4.4 million)

·      Profit before tax and highlighted items                    £3.2 million            (2018: £3.2 million)

·      Profit before tax and after highlighted items            £2.7 million            (2018: £2.3 million)

·      Adjusted earnings per share (basic)                         7.3 pence               (2018: 7.8 pence)

·      Adjusted earnings per share (diluted)                      7.3 pence               (2018: 7.6 pence)

·      Profit after tax and highlighted items                        £2.2 million            (2018: £1.8 million)

·      Basic earnings per share                                             6.1 pence               (2018: 5.2 pence)

·      Diluted earnings per share                                         6.1 pence               (2018: 5.0 pence)

Principal developments during the period

As previously reported, the Group's Pier and Bars divisions have experienced challenging trading conditions during the period.

·       Pier division - the trading performance during the period was negatively impacted by disappointing weather over the August Bank Holiday Weekend (August 2018) that continued into the following months. Additionally, weekend railway services to and from Brighton were disrupted by a major programme of engineering works, resulting in recurrent line closures (with replacement bus services) on the mainline service from London, affecting the stations between Three Bridges and Brighton. This disruption continued through to the beginning of May 2019 and significantly impacted the number of visitors into Brighton and to the pier.

May 2019 saw the 120th Anniversary of the opening of the pier, with a celebration held to mark this, attended by local dignitaries and members of the National Tourist Boards, as the date conveniently coincided with the start of English Tourism week. This representation tied in with our stated objective to keep the pier at the heart of Brighton Tourism and to utilise the services of the National Boards to reach an ever-widening pool of potential visitors. Campaigns reaching as far as China have featured our iconic pier and we have witnessed a significant rise in the numbers of visitors from Asia and further afield.

As part of our local campaign we have launched a residents' discount card which enables us to capture data from the Brighton community and help develop a stronger bond through providing our exclusive offers.

The bad weather during key periods was to some degree mitigated by the growth in our conference and corporate events business, and the introduction of the new 'Sunset' cocktail bar at Palm Court.

EBITDA for the combined Palm Court restaurant and Horatio's Bar increased by £0.1 million to £1.2 million versus the prior period. For the rest of the pier, EBITDA was down £0.4 million at £1.9 million; with the arcades up £0.1 million, rides and retail down £0.3 million, and overheads down £0.2 million. The downward trends reflect the impact of weather, closures to the railway and increased staffing costs due to statutory wages increases.

Shareholders will be aware that each year we undertake an annual substructure survey and this is now complete. We can report that no additional maintenance issues have been identified other than the usual budgeted maintenance requirements for the coming financial year.

The Pier division EBITDA for the period was £3.1 million (2018: £3.4 million) - see segmental information in note 4.

·       Bars division - the Company's Fez bar in Putney was closed for a full refit at the end of July 2018. The refurbishment works were prolonged due to unexpected structural issues at the venue, which was re-launched at the beginning of December, having been transformed into a new-look 'Le Fez'. Performance since the half-year has exceeded management's expectations.

Christmas trading across the Bars division during the period was broadly flat year-on-year, although trading conditions remain challenging in parts of the estate outside of key event dates such as Christmas and Halloween.

In February 2019 the freehold site in Derby was sold with gross proceeds of £0.8 million.

Bars division EBITDA for the period was £1.4 million (2018: £1.8 million). £0.2 million of this decrease relates to lost EBITDA versus the prior year from the temporary closure of the venue in Putney.

·       Golf division completed its first full year of trading, generating EBITDA of £1.5 million, with only 30 weeks comparative in the like period (2018: £0.6 million).

During the period the fit-out of our new site in Rushden completed on budget, ahead of schedule, and opened at the end of March 2019.This site features two improved 18- hole adventure golf courses and is well situated at the entrance to the newly opened cinema and leisure complex. Trading for the first three complete months is ahead of expectations. Fit-out has started on our next new site in Plymouth, which is expected to open towards the end of October 2019.

The roll out to all our Golf locations of a new augmented reality app for smartphones was completed during the period. The app enables players to keep track of play with scorecards whilst at the same time bringing the adventure to life with its animations.

Results for the full year show that the Group continues to be cash-generative, with EBITDA before highlighted items at £5.3 million (2018: £5.2 million) and EBITDA after highlighted items of £4.7 million (2018: £4.4 million) see Note 26.

Group operating profit before highlighted items was £3.2 million (2018: £3.2  million) and Group operating profit for the period after highlighted items was £2.7 million (2018) £2.3 million).

Strategy of the combined Group and outlook for the coming period

We are confident of another year of progress.

The Group will continue to drive sales through new acquisitions and developments in the existing businesses.

The pier continues to attract visitors to Brighton seafront in substantial numbers. The 2019 summer weather arrived enabling the pier to benefit from the sunny conditions for much of July and part of August. The completion of the railway upgrades on the London mainline route to Brighton, as well as the good weather on the August bank holiday weekend, both contributed to achieving a record week and meeting expectations for the summer.

The new catering and hospitality offering continues to be a big focus of activity for the pier, with the refitted Palm Court and Horatio's bar bringing valuable new conference and events opportunities during quieter times of the year. For the coming winter months the focus will be on marketing these spaces for conferences, functions and weddings. The second area of focus during the upcoming quiet period is the usual annual maintenance work to the substructure of the pier. This important investment each year ensures the pier will continue to exist for the pleasure of visitors to Brighton for many years to come.

The Bars division will continue to promote quality service and delivery in relation to the Group's existing sites, whilst also pursuing opportunities for selective investment to improve the estate. The current financial period will benefit from a full year of trading at Putney Le Fez. Work started over the summer period on a minor refit of Bath PoNaNa, which will open again for new and returning students at the end of the summer.

With regard to the Golf division, the coming year will benefit from a full year of trading at our new site at Rushden Lakes and a part year for our latest new site at Plymouth Drake's Circus, when it opens toward the end of October 2019. We continue to review opportunities for new sites for FY 2021 onwards.

The strategy of the enlarged Group continues to capitalise on the skills of the three existing divisions, creating a growth company that operates across a diverse portfolio of leisure and entertainment assets in the UK. The Group will achieve this objective by way of organic revenue growth throughout the whole estate, together with the active pursuit of future potential strategic acquisitions of entertainment destinations, thus enhancing the Group's portfolio in realising synergies by leveraging scale. It is the Board's longer-term strategy to position the Company as a consolidator within this sector.

Significant events that have taken place since the period end

Since the period end a sub-let was completed of the Reading Coalition site, which closed in July 2018. This concludes the rationalisation of the Bars estate, leaving the Group with twelve remaining cash generative sites all situated in prime locations.

Financial review

Cash flow

Cash flow generated from operations (after interest and tax payments) available for investment was £3.2 million (2018: £2.5 million).

Balance sheet

Fixed assets

The Group invested £2.5 million in capital expenditure during the period (2018: £3.3 million):

·      £0.3 million (2018: £1.7 million) was spent on the Pier division, which primarily related to the annual purchase of new machines for the amusement arcades.

·      £1.2 million (2018: £0.1 million) was spent on the Golf division, covering the full investment in fitting out our new site at Rushden Lakes, new EPOS for the whole Golf estate, and deposits for the construction of the new golf courses at Plymouth Drake's Circus.

·      £0.9 million (2018: £1.3 million) was spent on the Bars division, which primarily included the refit of Putney Le Fez, together with other minor capital maintenance across the Bars estate.

During the period the Group disposed of its freehold site in Derby for gross proceeds of £0.8 million. Fixed assets with a net book value of £0.6 million were disposed along with the site, giving a book profit of £0.1 million. This income appears in highlighted items (see Note 5).

Bank debt and cash

At the period end, the Group had:

·      an outstanding term facility of £13.3 million (2018: £14.7 million), with repayments of £1.5 million due to be repaid within the next 12 months (2018: £1.5 million);

·      an RCF facility of £1.75 million with £1.5 million drawn at the period-end (2018: £2.5 million facility with £2.0m drawn); and

·      cash balances of £2.7 million (2018: £2.8 million).

Key performance indicators

The Group's key performance indicators are focused on the continued expansion of the Group to drive revenues, EBITDA and earnings growth.

New acquisitions and developments

The long-term strategy of the enlarged Group continues to capitalise on the skills of the Group 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 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.

·      The successful acquisition of Lethington Leisure Limited in December 2017 is the second example of the implementation of this strategy and follows on from the acquisition of Brighton Marine and Palace Pier Company in April 2016.

·      The EBITDA generated by the new Golf business in its first full 52 weeks of trading amounted to £1.5 million (2018: £0.6 million - 30 weeks), bringing additional revenues and free cash flow for potential utilisation by the enlarged Group. The Group has also benefited from the significant redevelopment of the Palm Court Restaurant and Horatio's Bar in the prior period offering additional capacity during the peak summer season and the opportunity to offer a much wider range of conference and event facilities. The full-year impact of the Golf division, the growth opportunities to roll out new Golf venues, as well as the potential to further capitalise on the refitted catering facilities on the pier, all fit well with the Group's growth strategy.

·      During the period the Group completed its re-development of Putney 'Le Fez' and the opening of its first new Golf site at Rushden lakes. Both of these developments have exceeded expectations. The new financial year will benefit from the full-year impact of this investment.

·      We are continuing to invest in the Bars estate with a minor refit planned for Bath PoNaNA in July, as well as the fit-out of a second new golf site at Plymouth Drake's Circus which is scheduled to open towards the end of October 2019.

·      We will continue to focus on the long-term quality of acquisitions, together with investment in our existing estate and new site acquisitions

Group performance versus the prior period

The full benefit of the 52 weeks (2018: 30 weeks) trading in the Golf division has contributed a further £2.3 million of sales and £0.9 million of EBITDA to the Group.

Whilst the development of Putney has resulted in some short-term impact on EBITDA from the closure period, we expect this venue to bring significant gains in future years. Similarly, there are some initial costs incurred in the fit-out period, by way of rent and other overheads, for the new Golf sites but the performance of these sites provides good growth opportunities for the Golf division.

Trading performance at the pier has been impacted by the disappointing summer weather of 2018 and the impact of rail closures on the London to Brighton mainline rail service; this has been offset, however, by good performances in the newly refitted Palm Court and Horatio's Bar. The longer term benefit of the growing conference and events business will help to grow trading opportunities outside of the peak summer trading period.

The Group continues to review its operations and, where appropriate, dispose of less profitable businesses. During the period the group disposed of its Derby freehold site for £0.8 million. Over the last three years this brings the total sites disposed of in the Bars division to nine sites. Since the period-end we completed the sub-let of Reading Coalition which completes the bars property rationalisation process that started in 2016. Although these disposals and closures have impacted sales in the short term, they have improved profitability. No further closures are envisaged by the Group next year.

·      Revenue was up 2% at £32.0 million (2018: £31.4million)

·      Group EBITDA before highlighted items was up 3% at £5.3 million (2018: £5.2 million)

·      Group EBITDA after highlighted items was up 8% at £4.8 million (2018: £4.4 million)

·      Group profit before tax and highlighted items was in line with last year £3.2 million (2018: £3.2 million)

·      Group profit before tax and after highlighted items was up 19% at £2.7 million (2018: £2.3 million)

Consolidated statement of comprehensive income

For the 52 week period ended 30 June 2019

			52 weeks ended 30 June 2019	53 weeks ended 1 July 2018
			£'000	£'000
Revenue			32,022	31,390
Cost of sales			(4,995)	(5,132)
Gross profit			27,027	26,258
Operating expenses - excluding highlighted items			(23,301)	(22,656)
Highlighted items			(557)	(947)
Total operating expenses			(23,858)	(23,603)
Operating profit - before highlighted items			3,726	3,602
Highlighted items			(557)	(947)
Operating profit			3,169	2,655
Finance cost			(480)	(387)
Profit before tax and highlighted items			3,246	3,215
Highlighted items			(557)	(947)
Profit on ordinary activities before taxation			2,689	2,268
Taxation on ordinary activities			(446)	(507)
Profit and total comprehensive income for the period			2,243	1,761
Earnings per share - basic* (pence)			6.1	5.2
Earnings per share - diluted (pence)			6.1	5.0

* 2019 basic weighted average number of shares in issue is 36.64 million (2018: 33.91 million).

No other comprehensive income was earned during the period (2018: £nil).

Consolidated balance sheet

As at 30 June 2019

		As at 30 June 2019		As at 1 July 2018
		£'000		£'000
Non-current assets
Intangible assets		12,715		12,669
Property, plant and equipment		27,169		26,634
		39,884		39,303
Current assets
Assets held for sale		-		293
Inventories		624		599
Trade and other receivables		1,931		1,791
Cash and cash equivalents		2,725		2,812
		5,280		5,495
TOTAL ASSETS		45,164		44,798
EQUITY
Issued share capital		9,322		8,916
Share premium		15,993		15,426
Merger reserve		(1,111)		(1,111)
Other reserve		407		362
Retained deficit		(167)		(2,410)
Equity attributable to equity shareholders of the Parent		24,444		21,183
TOTAL EQUITY		24,444		21,183
LIABILITIES
Current liabilities
Trade and other payables		5,022		5,732
Other financial liabilities		2,003		1,696
Income tax payable		393		840
Provisions		131		59
		7,549		8,327
Non-current liabilities
Other financial liabilities		12,787		14,988
Deferred tax liability		384		300
		13,171		15,288
TOTAL LIABILITIES		20,720		23,615
TOTAL EQUITY AND LIABILITIES		45,164		44,798

Consolidated statement of cash flows

For the period ended 30 June 2019

		52 weeks to		53 weeks to
		30 June 2019		1 July 2018
		£'000		£'000
Operating activities
Profit before tax		2,689		2,268
Finance costs		480		387
Amortisation of intangible assets		62		39
Depreciation of property, plant and equipment		1,493		1,432
Write off of property, plant and equipment at closed or redeveloped sites		-		176
(Profit)/loss on disposal of property, plant and equipment and assets held for sale		(96)		2
Share-based payment expense		45		102
Decrease in provisions and deferred tax		72		(432)
Increase in inventories		(25)		(47)
Increase in trade and other receivables		(140)		(221)
Decrease in trade and other payables		(119)		(817)
Interest paid		(439)		(358)
Income tax paid		(809)		(65)
Net cash flow from operating activities		3,213		2,466
Investing activities
Purchase of property, plant and equipment and intangible assets		(2,548)		(3,336)
Acquisition of business, net of cash acquired		-		(8,688)
Proceeds from disposal of property, plant and equipment and assets held for sale		801		13
Payment of deferred consideration to former Lethington Limited Shareholders		(591)		-
Net cash flows used in investing activities		(2,338)		(12,011)
Financing activities
Proceeds from borrowings		1,300		6,800
Repayment of borrowings		(3,235)		(1,450)
Proceeds from issue of ordinary shares		973		3,051
Share issue costs recognised directly in equity		-		(106)
Capital element on finance lease rental payments		-		(11)
Net cash flows (used in)/from financing activities		(962)		8,284
Net decrease in cash and cash equivalents		(87)		(1,261)
Cash and cash equivalents at beginning of period		2,812		4,073
Cash and cash equivalents end of period		2,725		2,812

Consolidated statement of changes in equity

For the period ended 30 June 2019

		Issued share capital	Share premium	Merger reserve	Other reserves	Retained earnings/ (deficit)	Total shareholders' equity
		£'000	£'000	£'000	£'000	£'000	£'000
At 25 June 2017		7,941	13,229	(1,575)	321	(4,171)	15,745
Profit and total comprehensive income for the period		-	-	-	-	1,761	1,761
Transactions with owners:
Issue of shares		975	2,303	464	(61)	-	3,681
Share issue costs taken directly to equity		-	(106)	-	-	-	(106)
Share-based payments charge		-	-	-	102	-	102
At 1 July 2018		8,916	15,426	(1,111)	362	(2,410)	21,183
Profit and total comprehensive income for the period		-	-	-	-	2,243	2,243
Transactions with owners:
Issue of shares		406	567	-	-	-	973
Share issue costs taken directly to equity		-	-	-	-	-	-
Share-based payments charge		-	-	-	45	-	45
At 30 June 2019		9,322	15,993	(1,111)	407	(167)	24,444

The prior year reserves have been restated to transfer merger relief of £464,210 out of share premium into merger reserves. This merger relief arose from consideration shares issued at the time of the purchase of Lethington Leisure Limited on 8 December 2017, as the total equity secured in the target company exceeded 90% this should be shown in merger relief. The figures previously reported as at 1 July 2018 were share premium of £15,890,000 and merger relief of £1,575,000.

Notes to the consolidated financial statements

For the period ended 30 June 2019

1.  Accounting policies

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. Both the immediate and ultimate Parent of the Group is The Brighton Pier Group PLC. The Brighton Pier Group PLC owns and operates Brighton Pier, one of the leading tourist attractions in the UK. The Group also operates 13 premium bars (2018: 12) and 7 (2018: 6) indoor adventure golf facilities trading in major towns and cities across the UK.

Announcement

This announcement was approved by the Board of Directors on 23 September 2019. The preliminary results for the period ended 30 June 2019 are based on the audited financial statements for the same period. The financial information set out in this announcement does not constitute the Company's statutory accounts for the years ended 30 June 2017 or 1 July 2018. The financial information set out in the announcement has been prepared on the basis of the accounting policies set out in the statutory accounts of Brighton Pier Group PLC for the year ended 30 June 2019. This condensed consolidated financial information does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The auditor's reports on the financial statements for the years ended 25 June 2017 and 26 June 2016 were unqualified and did not contain a statement under Section 498 of the Companies Act 2006. The financial statements for the year ended 1 July 2018 have been delivered to the Registrar of Companies.

Basis of preparation

The Group financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union as they apply to financial statements of the Group for the period ended 30 June 2019 and in accordance with the Companies Act 2006. The accounting policies which follow set out those policies which apply in preparing the financial statements for the period ended 30 June 2019. These accounting policies were consistently applied for all the periods presented.

The financial statements are presented in sterling under the historical cost convention. All values are rounded to the nearest thousand pounds (£000) except when otherwise indicated.

The financial statements are prepared on a 52 or 53 week basis up to the last Sunday in June or the first Sunday in July each year (2019: 52 week period ended 30 June 2019; 2018: 53 week period ended 1 July 2018).  The notes to the consolidated financial statements are on this basis.

2. Business combinations

On 8 December 2017 the Group acquired 100% of the issued share capital of Lethington Leisure Limited (trading as Paradise Island Adventure Golf), an unlisted company based in the UK. The Group acquired this company in order to expand and diversify its business.

The fair value of assets and liabilities assumed has been deemed to be equal to their book value. Management also concluded that there were no separately identifiable intangible assets to be recognised as part of the acquisition.

There have been no further acquisitions in the period to 30 June 2019.

In the current year there was an adjustment to increase goodwill on acquisition by £34,000 reflecting the fact the net assets on purchase were £34,000 lower than expected. There was no adjustment to consideration paid for this difference. The additional goodwill has been recognised as an addition in the current year.

3.  Segmental information

The following tables' present revenue, profit and loss and certain asset and liability information regarding the Group's business segments for the 52 week period ended 30 June 2019, and the 53 week period ended 1 July 2018.

52 week period ended 30 June 2019		Owned Bars	Brighton Palace Pier	Golf	Total segments	Head office costs	2019 consolidated total
		£'000	£'000	£'000	£'000	£'000	£'000
Revenue		12,845	14,695	4,482	32,022	-	32,022
Cost of sales		(2,525)	(2,423)	(47)	(4,995)	-	(4,995)
Gross profit		10,320	12,272	4,435	27,027	-	27,027
Gross profit %		80.3%	83.5%	99.0%	84.4%		84.4%
Administrative expenses (excluding depreciation and amortisation)		(8,959)	(9,204)	(2,855)	(21,018)	(728)	(21,746)
Divisional earnings		1,361	3,068	1,580	6,009	(728)	5,281
Highlighted items						(557)	(557)
Depreciation and amortisation						(1,555)	(1,555)
Finance cost						(480)	(480)
Profit before tax						(3,320)	2,689
Income tax						(446)	(446)
Profit after tax						(3,766)	2,243
EBITDA (before highlighted items)		1,361	3,068	1,580	6,009	(683)	5,326
EBITDA (after highlighted items)		1,361	3,068	1,580	6,009	(1,240)	4,769

Concession income from the pier is included within pier revenue and amounted to £201,000 for the period ended 30 June 2019 (£232,000 - 2018).

53 week period ended 1 July 2018		Owned Bars (53 weeks)	Brighton Palace Pier (53 weeks)	Golf (30 weeks)	Total segments	Overhead	2018 consolidated total
		£'000	£'000	£'000	£'000	£'000	£'000
Revenue		14,699	14,505	2,186	31,390	-	31,390
Cost of sales		(2,879)	(2,238)	(15)	(5,132)	-	(5,132)
Gross profit		11,820	12,267	2,171	26,258	-	26,258
Gross profit %		79%	85%	99%	83%	-	83%
Administrative expenses (excluding depreciation and amortisation)		(10,056)	(8,828)	(1,543)	(20,427)	(758)	(21,185)
Divisional earnings		1,764	3,439	628	5,831	(758)	5,073
Highlighted items						(947)	(947)
Depreciation and amortisation						(1,471)	(1,471)
Finance cost						(387)	(387)
Profit before tax						(3,563)	2,268
Income tax						(507)	(507)
Profit after tax						(4,070)	1,761
EBITDA (before highlighted items)		1,764	3,439	628	5,831	(656)	5,175
EBITDA (after highlighted items)		1,764	3,439	628	5,831	(1,427)	4,404

All segment assets and liabilities are located within the United Kingdom and all revenues arose in the United Kingdom.

Segment revenues are generated from the sale of goods to external customers. There was no inter-segment sales in the years presented. No single customer contributed more than 10% of the Group's revenues.

The accounting policies of the reportable segments have been consistently applied. Overheads have been separated out to reflect how management reviews the discrete financial information and uses it to allocate resources.

The revenue and costs of sales figure for the bar's division has been restated to allocate retrospective discounts as a reduction in cost of sales, as opposed to revenue. The figures previously reported were revenue of £14,991,000 and cost of sales of £3,171,000.  There was no overall impact on the gross profit as a result of this amendment. Overall revenue reduced by £292,000 and overall cost of sales reduced by the same amount.

4.  Highlighted items

	Period ended 30 June 2019		Period ended 1 July 2018
	£'000		£'000
Acquisition and pre-opening costs
Acquisition costs	-		312
Site pre-opening costs	356		338
	356		650
Impairment, closure and legal costs
Impairment of intangible non-current assets	-		-
Profit on disposal of Derby freehold (note 1)	(133)		-
Other closure costs & legal costs	334		297
	201		297
Total	557		947

The above items have been highlighted to give a better understanding of non-comparable costs included in the consolidated statement of comprehensive income for this period.

Period ended 30 June 2019

Site pre-opening costs of £356,000 incurred during the period ended 30 June 2019 relate to expenses incurred during the redevelopment of 'Le Fez' in Putney and of two new sites at Rushden Lakes and Plymouth.

Other closure and legal costs of £201,000 were incurred during the period ended 30 June 2019. These arose from the closure of Reading Coalition £236,000, a book profit of £133,000 from the disposal of the Derby freehold site and a further £98,000 of costs related to redundancies which will further contribute to reductions in the overhead costs of the Bars division going forward.

Period ended 1 July 2018

Acquisition costs of £312,000 relate to costs incurred as part of the acquisition on 8 December 2017 of Lethington Leisure Limited by The Brighton Pier Group PLC.

Site pre-opening costs of £338,000 relate to the pre-opening costs of the redevelopment of the Palm Court restaurant, Victoria's Bar and Horatio's Bar on Brighton Pier, as well as the redevelopment of the Wimbledon Po Na Na bar into a Smash table tennis bar.

Other closure and legal costs of £297,000 relate to the costs incurred as a result of the closure of the Coalition bar in Reading and the exiting of a lease on an unused site in Liverpool.

	Period ended 30 June 2019		Period ended 1 July 2018
	£'000		£'000
Acquisition and pre-opening costs
Acquisition costs	-		312
Site pre-opening costs	356		338
	356		650
Impairment, closure and legal costs
Impairment of intangible non-current assets	-		-
Profit on disposal of Derby freehold (note 1)	(133)		-
Other closure costs & legal costs	334		297
	201		297
Total	557		947

The above items have been highlighted to give a better understanding of non-comparable costs included in the consolidated statement of comprehensive income for this period.

Period ended 30 June 2019

Site pre-opening costs of £356,000 incurred during the period ended 30 June 2019 relate to expenses incurred during the redevelopment of 'Le Fez' in Putney and of two new sites at Rushden Lakes and Plymouth.

Other closure and legal costs of £201,000 were incurred during the period ended 30 June 2019. These arose from the closure of Reading Coalition £236,000, a book profit of £133,000 from the disposal of the Derby freehold site and a further £98,000 of costs related to redundancies which will further contribute to reductions in the overhead costs of the Bars division going forward.

Period ended 1 July 2018

Acquisition costs of £312,000 relate to costs incurred as part of the acquisition on 8 December 2017 of Lethington Leisure Limited by The Brighton Pier Group PLC.

Site pre-opening costs of £338,000 relate to the pre-opening costs of the redevelopment of the Palm Court restaurant, Victoria's Bar and Horatio's Bar on Brighton Pier, as well as the redevelopment of the Wimbledon Po Na Na bar into a Smash table tennis bar.

Other closure and legal costs of £297,000 relate to the costs incurred as a result of the closure of the Coalition bar in Reading and the exiting of a lease on an unused site in Liverpool.

5.  Earnings per share

Basic earnings per share amounts are calculated by dividing net income for the period attributable to ordinary shareholders of The Brighton Pier Group PLC by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the Parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

Adjusted basic and diluted earnings per share are calculated based on the profit for the period adjusted for highlighted items and their related tax effects.

The following reflects the income and share data used in the basic and diluted earnings per share computations:

Basic earnings per share	Period ended	Period ended
	30 June 2019	1 July 2018
Profit for the period (£'000)	2,243	1,761
Basic weighted number of shares (number)	36,641,819	33,914,684
Earnings per share - Basic (pence)	6.1	5.2

Basic adjusted earnings per share	Period ended	Period ended
	30 June 2019	1 July 2018
Profit for the period before highlighted items (£'000)	2,669	2,652
Basic adjusted weighted number of shares (number)	36,641,819	33,914,684
Adjusted earnings per share - Basic (pence)	7.3	7.8

Diluted basic earnings per share	Period ended	Period ended
	30 June 2019	1 July 2018
Profit for the period (£'000)	2,243	1,761
Diluted weighted number of shares (number)	36,779,103	34,914,600
Earnings per share - Diluted (pence)	6.1	5.0

Adjusted diluted earnings per share	Period ended	Period ended
	30 June 2019	1 July 2018
Profit for the period before highlighted items (£'000)	2,669	2,652
Diluted weighted number of shares (number)	36,779,103	34,914,600
Adjusted earnings per share - Diluted (pence)	7.3	7.6

Reconciliation of adjusted profit for the period

Adjusted profit is calculated as follows:

	Period ended	Period ended
	30 June 2019	1 July 2018
	£'000	£'000
Profit for the period	2,243	1,761
Highlighted items	557	947
Tax on highlighted items	(131)	(56)
Adjusted profit for the period (£'000)	2,669	2,652

The impact of dilutive shares on the weighted average number of shares is summarised below:

	2019	2018
	Number	Number
Weighted average number of shares for Basic EPS	36,641,819	33,914,684
Dilutive effect of share options and warrants	137,284	999,916
Weighted average number of shares for Diluted EPS	36,779,103	34,914,600

Share options with exercise prices of 95p and 111p have not been included in the calculation of weighted average number of shares for diluted earnings per share as these options are anti-dilutive.

6.  Reconciliation to EBITDA

Group profit before tax can be reconciled to Group EBITDA as follows:

EBITDA Reconciliation	2019	2018
Profit before tax for the year	2,689	2,268
Add back depreciation	1,493	1,432
Add back amortisation	62	39
Add back finance costs	480	387
Add back share-based payment charge	45	102
Add back highlighted items	557	947
Group EBITDA before highlighted items	5,326	5,175

Group EBITDA after highlighted items was £ 4,769,000 (2018: £4,404,000), which excludes those highlighted items that do not impact EBITDA, namely the write-off of property, plant and equipment at closed and refurbished sites of £nil (2018: £176,000).

 

END

 

 

FR CKNDQPBKKNCB