Sales exceed £40m for first time at Brighton Pier Group
Brighton Pier Group is celebrating record revenue of £40.1m for the year to 26 June 2022 – however its financial results were published with a note of caution about cost and demand uncertainty.
Revenues were up 25% on the same pre-Covid period in 2019, driven by strong trading across all the Group's divisions. A consistent gross margin performance, combined with government support from temporary reductions in VAT and business rates, enabled the group to make good progress on maximising earnings and paying down debt. Since the end of the previous financial year, the group has reduced its net debt by 62% to £5m.
Group earnings before interest, tax, depreciation and amortisation (EBITDA) was £10.8m and profit before tax was £7.3m.
The year opened with a record summer trading period in 2021 boosted by government support packages, pent-up consumer demand and disposable incomes accrued during lockdown.
Brighton Palace Pier delivered another consistent performance, and the bars division completed its rationalisation programme with the disposal of its last marginal site in September 2021. The golf division's high margin business continued to deliver strong cash contribution during the period.
Lightwater Valley performed well in its first full year of ownership, benefitting from investment in new food and beverage outlets, rides and EPOS technology.
However, the group said that the outlook for the UK economy for the remainder of 2022 and into next year remained uncertain. Total group sales for the nine weeks to 28 August 2022 were up 1% on a like-for-like basis versus the same pre-Covid period in 2019, benefitting from strong trading at the Pier.
"Going forward, management recognise that the group is entering a period where economic pressures, both consumer discretionary spend allied with increased costs will present significant trading challenges," the business said in a trading update.
Although, the company highlighted that it would benefit from the cash-generative nature of its diverse businesses, with cash at the end of August 2022 of £11.9m including a £1m undrawn revolving credit facility, resulting in net debt of less than £2m, which it said would "ensure resilience in the face of increasing economic uncertainty".
The Group said it had been able to mitigate some inflationary energy and wage cost pressures through targeted price increases, operational improvements and by fixing energy costs where possible early in 2022. Although, it added that as inflationary pressures head into double digits, these will become harder to mitigate over the short to medium term, which has increased uncertainty in budgeting and forecasting.
Chief executive Anne Ackord said: "The group's strong recovery following the Covid pandemic has resulted in sales of more than £40m for the first time in the group's history. This reflects the hard work of all the group's employees, for which we are very grateful. This exceptional period has benefitted both from pent-up customer demand and from hospitality-targeted government recovery packages. The ongoing cash-generative nature of the group's diverse businesses and strong balance sheet add resilience to the Brighton Pier Group. Nevertheless, as we enter into unchartered waters, economic headwinds make it difficult to predict both costs and consumer demand, so our outlook for the future must be one of caution."