REG - Brighton Pier Group - Half-year Report
26/09/2022 07:00
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RNS Number : 5387A Brighton Pier Group PLC (The) 26 September 2022
26 September 2022
The Brighton Pier Group PLC
(the "Company" or the "Group")
Unaudited interim results for the 52 weeks ended 26 June 2022
Strong year but uncertain economic outlook
The Brighton Pier Group is pleased to announce its unaudited results for the
52 weeks ended 26 June 2022. The Group demonstrated the continuing strength of
the business model, with record revenues at £40.1 million (2021: £13.5
million), up 25% on the same pre-COVID period in 2019. This has been driven by
strong trading across all the Group's divisions. A consistent gross margin
performance, combined with Government support from temporary reductions in VAT
and business rates, has enabled the Group to make good progress on maximising
earnings and paying down debt. Since the end of the previous financial year
the Group has reduced its net debt by 62% to £5.0 million.
These results are published in accordance with the change of the Company's
accounting reference date from the end of June to the end of December, further
details of which were set out in its RNS announcement dated 20 June 2022.
Financial highlights - 52 weeks ended 26 June 2022
• Revenue increased to £40.1 million (2021: £13.5 million),
a record result for the Group.
• Group revenues are up 25% on the same pre-COVID period in
2019.
• Group EBITDA was £10.8 million (2021: £5.1 million).
• Gross margins held at 87%.
• The Group benefitted from Government support by way of a
temporarily reduced rate of VAT and rates relief.
• Profit before tax was £7.3 million (2021: £4.1 million).
• EPS was 15.4p (2021: 11.3p).
• Repayment of £7.7 million of debt (38% of borrowings); net
debt reduced to £5.0 million (2021: £13.3 million).
Operational highlights
• Year opened with a record summer trading period in 2021 boosted by
Government support packages, pent-up consumer demand and disposable incomes
accrued during lockdown.
• Brighton Palace Pier delivered another consistent performance - new
EPOS technology installed to better capture customer data going forward.
• The Bars division completed its rationalisation programme
with the disposal of its last marginal site in September 2021.
• The Golf division's high margin business continued to
deliver strong cash contribution during the period.
• Lightwater Valley performed well in its first full year of
ownership, benefitting from investment in new food and beverage outlets, rides
and EPOS technology.
Outlook
• The outlook for the UK economy for the remainder of 2022 and
into next year remains uncertain.
• Current total Group sales for the important period of the
first 9 weeks to 28 August 2022 were up 1% on a like-for-like basis versus the
same pre-COVID period in 2019 benefitting from strong trading at the Pier.
This comparative excludes Lightwater Valley which was acquired in June 2021.
Going forward, management recognise that the Group is entering a period where
economic pressures, both consumer discretionary spend allied with increased
costs will present significant trading challenges.
• The Group will however benefit from the cash-generative nature of
its diverse businesses, with cash at the end of August 2022 of £11.9 million
(including a £1.0 million undrawn revolving credit facility) resulting in net
debt of less than £2.0 million. This will ensure resilience in the face of
increasing economic uncertainty.
• Importantly, the Group has been able to mitigate some
inflationary energy and wage cost pressures through targeted price increases,
operational improvements and by fixing energy costs where possible early in
2022. As inflationary pressures head into double digits these will become
harder to mitigate over the short to medium term, which has increased
uncertainty in budgeting and forecasting.
Anne Ackord, Chief Executive Officer, said:
"The Group's strong recovery following the COVID pandemic has resulted in
sales of more than £40 million for the first time in the Group's history.
This reflects the hard work of all the Group's employees, for which we are
very grateful.
This exceptional period has benefitted both from pent-up customer demand and
from hospitality-targeted Government recovery packages. The ongoing
cash-generative nature of the Group's diverse businesses and strong balance
sheet add resilience to The Brighton Pier Group.
Nevertheless, as we enter into unchartered waters, economic headwinds make it
difficult to predict both costs and consumer demand, so our outlook for the
future must be one of caution."
All Company announcements and news are available at www.brightonpiergroup.com
(http://www.brightonpiergroup.com)
Enquiries:
The Brighton Pier Group PLC Tel: 020 7376 6300
Luke Johnson, Chairman Tel: 020 7016 0700
Anne Ackord, Chief Executive Officer Tel: 01273 609 361
John Smith, Chief Financial Officer Tel: 020 7376 6300
Cenkos Securities plc (Nominated Adviser and Broker)
Stephen Keys (Corporate Finance) Tel: 020 7 (Tel:0207) 397 8926
Callum Davidson (Corporate Finance) Tel: 020 7397 8923
Michael Johnson (Sales) Tel: 020 7397 1933
Novella (Financial PR) Tel: 020 3151 7008
Tim Robertson
Claire de Groot
Safia Colebrook
Certain information contained in this announcement would have been deemed
inside information for the purposes of Article 7 of Regulation (EU) No
596/2014 until the release of this announcement.
About The Brighton Pier Group PLC
The Brighton Pier Group PLC is a UK entertainment business spread across four
divisions:
· Brighton Palace Pier offers a wide range of attractions including
two arcades (with over 300 machines) and eighteen funfair rides, together with
a variety of on-site hospitality and catering facilities. According to Visit
Britain, it was the most popular free attraction in England with over 4.2
million visitors in 2021.
· The Golf division (which trades as Paradise Island Adventure
Golf) operates eight indoor mini-golf sites at high footfall retail and
leisure centres.
· The Bars division trades under a variety of concepts including
Embargo República, Lola Lo, Le Fez, Lowlander and Coalition. The Group's bars
target a customer base of students midweek and stylish over-21s and
professionals at the weekend.
· Lightwater Valley Adventure Park, a leading North Yorkshire
attraction, is focused on family days out. Set within 175 acres of landscaped
parkland, the park operates a variety of attractions including rides,
amusements, crazy golf, children's outdoor and indoor play, entertainment
shows, together with numerous food, drink and retail outlets.
Business Review
Introduction
The Group has performed strongly for the 52 weeks ended 26 June 2022 (2021: 52
weeks ended 27 June 2021). As the restrictions from the pandemic were
gradually lifted all divisions performed well, benefitting from pent-up
consumer demand and Government support packages and as a result delivered
substantial increases in both sales and profitability.
The Group's strategy remains focused on capitalising on the potential of its
diversified portfolio of leisure and family entertainment assets in the UK.
These results include the impact of a prior year restatement, further details
of which are set out in Note 9. All references to '2021', being the 52 weeks
ended 27 June 2021, are restated figures. The restatement primarily affects
the balance sheet, with a £51k reduction on the 2021 Statement of
Comprehensive Income.
Operational review
Whilst COVID restrictions prevented the Bars division from reopening until 20
July 2021 and some restrictions were reintroduced in December 2021 due to the
emergence of the Omicron variant, the Group has otherwise been fully open
throughout the period and able to trade mostly unhindered.
The 13-week period of summer trading to the end of September 2021 represented
40% of Group sales for the 52 weeks and was therefore a crucial trading period
for the Group. The warmer summer weather, school holidays, a record August
bank holiday week on Brighton Palace Pier that achieved gross sales of over
£1m, together with the addition of Lightwater Valley, all contributed to the
Group's sales during this first quarter. This key trading period was boosted
by pent-up consumer demand and higher levels of disposable income that
consumers accrued during lockdown, together with a significant increase in
people choosing domestic holidays. In addition, the temporarily reduced rate
of VAT and rates relief by way of Government support enabled the Group to make
good progress repaying debt taken on during the height of the pandemic.
Collectively, these factors provided a unique opportunity for the business to
maximise revenue and earnings as it re-opened.
The Group successfully completed the full integration of Lightwater Valley
(which was acquired on 17 June 2021) in the first few months of this period.
During the quieter winter months, the Group also completed the installation of
a new EPOS system. The park opened briefly across the Easter period followed
by its full re-opening for the summer months.
In September 2021, the Bars division concluded its disposal programme by
disposing of its one remaining marginal site (Smash in Reading). This disposal
resulted in a gain of £0.7 million realised upon the extinguishment of lease
liabilities.
Financial review and KPIs
Total Group revenue for the period was £40.1 million (2021: £13.5 million),
up 25% on the same pre-COVID period in 2019 (2019: £32.0m).
Revenue split by division:
• Pier
division
£16.5 million (2021: £9.7 million)
• Golf
division
£7.1 million (2021: £2.4 million)
• Bars
division
£11.2 million (2021: £1.3 million)
• Lightwater
Valley*
£5.3 million (2021: £0.2 million)
* 2021 results for Lightwater Valley reflect the period from
acquisition on 17 June 2021 to 27 June 2021.
On a divisional basis and comparing with the pre-COVID like-for-like period in
2019:
• Brighton Palace Pier like-for-like sales were up 12% on 2019.
• Golf division like-for-like sales were up 23% on 2019.
• Bars division like-for-like sales (for only 49 weeks as the
division was only able to re-open from the end of July 2021) were up 21% on
2019.
Group gross margin for the period continued in line at 87% (2021: 87%)
reflecting the high-margin nature of all four divisions - and this despite the
numerous ongoing supply and cost challenges that have appeared in the economy
over the period.
Highlighted items totalling £0.8 million of gains (2021: £2.7 million of
gains) were recognised during the period. These gains arose from:
• £(0.6) million - impairment of goodwill in the Rushden site;
• £0.9 million - reversal of impairment charges to property,
plant and equipment and right-of-use assets;
• £(0.4) million - recognition of in-substance fixed lease
payments;
• £0.3 million - gain from the derecognition of other lease
liabilities during the period; and
• £0.7 million - gain on extinguishment of lease liabilities
following the disposal of Smash in Reading.
Group profit on ordinary activities before tax was up 77% at £7.3 million
(2021: £4.1 million).
Group profit on ordinary activities after tax was up 36% at £5.8 million
(2021: £4.2 million) - there being no tax payable in the prior period due to
utilisation of losses which occurred during lockdown.
In summary, for the 52-week period ended 26 June 2022 (compared to the
equivalent 52-week period ended 27 June 2021):
•
Revenue:
£40.1 million (2021: £13.5 million)
• Operating profit:
£8.5 million (2021: £5.1 million)
• Group EBITDA excluding highlighted items
**:
£10.8 million (2021: £5.1 million)
• Group EBITDA:
£10.8 million (2021: £4.7 million)
• Operating profit excluding highlighted items:
£7.6 million (2021: £2.4 million)
• Profit before tax excluding highlighted items:
£6.5 million (2021: £1.4 million)
• Profit before tax:
£7.3 million (2021: £4.1 million)
• Profit after
tax:
£5.8 million (2021: £4.2 million)
• Net debt at the end of the period:
£5.0 million (2021: £13.3 million)
• Basic earnings per share (excluding highlighted
items):
15.4p (2021: 11.3p)
• Basic earnings per share:
13.6p (2021: 5.6p)
• Diluted earnings per share (excluding highlighted items):
15.2p
(2021: 11.3p)
• Diluted earnings per share:
13.4p (2021: 5.6p)
** Highlighted items
are detailed in Note 4 to the financial statements.
The Group's key performance indicators remain centred on organic growth
coupled with continued expansion to drive revenues, EBITDA and earnings
growth.
The Board is pleased to report year-on-year growth in revenue, EBITDA and
earnings during this period with profit after tax and earnings per share for
the 52-week period both up 36%, and Group EBITDA (excluding highlighted items)
up 112%.
EBITDA split by division shows all divisions trading strongly:
• Pier
division
£3.1 million (2021: £1.0 million)
• Golf
division
£4.2 million (2021: £3.1 million(Δ))
• Bars
division
£3.0 million (2021: £1.8 million(Δ))
• Lightwater
Valley*
£1.6 million (2021: £0.1 million)
• Group overhead
costs
£(1.1) million (2021: £(0.9) million)
* 2021 results for Lightwater Valley reflect the period from acquisition on 17
June 2021 to 27 June 2021.
(Δ) 2021 EBITDA includes business interruption insurance receipts of £2.5
million in the Golf division and £2.5 million in the Bars division.
Cash flow and balance sheet
The Group generated net cash flow from operations of £11.6 million (2021:
£4.9 million), after interest and tax payments, all of which was available
for investment or the repayment of debt.
Capital expenditure in the period totalled £0.7 million (2021: £0.3 million)
across the Group.
In September 2021, the Group paid £1.3 million to settle the deferred
consideration and working capital for the purchase of Lightwater Valley
Attractions Limited. These payments were as agreed in the sale and purchase
contract and were detailed in the June 2021 Group Annual Report.
During the period, the Group made net debt repayments of £7.7 million (2021:
£1.3 million), which includes full repayment of the £3.6 million revolving
credit facility used to acquire Lightwater Valley together with a total of
£4.0 million scheduled repayments on the Group's principal term loan and its
Coronavirus Business Interruption Loans.
Total bank debt at the end of the period was £12.7 million (2021: £20.4
million), comprising a £11.3 million term loan and remaining Coronavirus
Business Interruption Loans of £1.4 million.
At the period end, cash and cash equivalents were £7.7 million (2021: £7.1
million).
The decrease in trade and other receivables of £2.0 million in the current
period primarily relates to the receipt of £2.0 million of COVID business
interruption insurance claims, £1.1 million in August 2021 and a further
£0.9 million in October 2021.
Net debt at the period end stood at £5.0 million (2021: £13.3 million). The
Directors continue to take a cautious approach to net debt levels for the
Group.
The Group currently has an undrawn revolving credit facility of £1.0 million,
giving total cash availability to the Group of £8.7 million as at the period
end.
On 16 March 2022, the Group signed a 1-year extension to its term loan and
revolving credit facilities, which were due to expire on 5 December 2022. The
facilities will now expire on 5 December 2023.
Details of the Group's banking covenants can be found on page 88 of the June
2021 Annual Report.
Trading for the 9 weeks to the 28 August 2022
Like for like sale sales for the 9-week period to the 28 August 2022 have seen
softer trading across some divisions with cost pressures building across the
Group. Total like-for-like sales for the 9 weeks were £8.3m, 1% up on
pre-pandemic levels (2019: £8.2 million). This comparative excludes
Lightwater Valley which was acquired in June 2021.
The Pier enjoyed another strong trading performance in summer 2022, with
unusually warm weather in England, was up 7% on pre-COVID levels at £5.6
million (2019: £5.2 million). Brighton Palace Pier's iconic status in
Brighton continues to draw millions of visitors, both locally and
internationally as it has done for the last 120 years. The Pier typically
starts to wind down following this summer trading period, as it goes into the
traditionally quieter winter months.
Conversely, trading in the Bars division has been impacted by the hot weather,
with like-for-like sales down 11% on pre-COVID levels at £1.7 million (2019:
£1.9 million). Price increases have seen gross margin improve which has
helped to offset cost increases. The division is now gearing up for the return
of students, Halloween, and Christmas.
The hot weather, in combination with a general decline in footfall in larger
shopping centres saw like-for-like sales down 8% in the Golf division at £1.0
million compared to pre-pandemic levels (2019: £1.1 million).
Lightwater Valley has seen significantly lower admissions compared to the
exceptional 2021 year (impacting revenues, despite improved spend-per-head
from retail investment in the new food and beverage operations). Together with
increased costs, this has reduced profitability compared to management
expectations based on the previous season, when pent-up demand from COVID
lockdowns saw an unprecedented surge in visitors. The Group has invested £0.4
million in the redevelopment of the park, with new rides, improved catering
offerings, and other outdoor attractions. Planning permission had previously
been granted for the development of 106 timber-style holiday lodges on the
southern edge of the Lightwater Valley Park. A minor variation to this
existing planning consent is being sought, so that the first stage of holiday
accommodation development can commence. This first stage will see the
installation of circa twenty pod-type units for rental. The unique forest
environment will make these an attractive proposition and will add a further
revenue stream to the business. Whilst this project is at an early stage, it
demonstrates the potential to create significant growth in the medium term.
Outlook
Following the easing of pandemic restrictions, the first half of calendar 2022
has been characterised by new economic uncertainty, with global instability
causing significant increases in food and energy prices, which in turn have
led to rapid inflation, a widely predicted cost-of-living crisis, strike
actions and an impending recession.
The current high inflation rate in the UK has translated into further cost
increases that are expected to continue.. The Group has implemented targeted
price uplifts to mitigate some of these pressures where possible, resulting in
gross margin unchanged at 87% over the last 24 months. The Group renegotiated
some of its energy supply contracts at the beginning of 2022, fixing the cost
of energy below the higher prices seen in recent months; other energy supply
contracts were agreed after 1 April 2022 and will therefore benefit from the
Government's recently announced Energy Bill Relief Scheme. While wage
inflation has remained relatively stable in most areas of the business over
the period, the Group expects wage inflation to build in the latter half of
2022 and beyond. In addition, other cost increases have in part been offset by
operational improvement and other efficiencies. As inflation potentially heads
into double digits, it will become harder to mitigate over the short to medium
term.
Furthermore, it is important to note that the Group no longer benefits from
the reduced rate of VAT and rates relief that contributed to the
record-breaking trading performance for the period ended June 2022.
Whilst the Board notes the continued strength demonstrated by the Company's
business model over the past 52 weeks, it acknowledges that trading for the
next 26-week period to 25 December 2022 is likely to present further
challenges, given the many headwinds currently facing the world economy and
possible contractions in consumer discretionary spend. The Board looks towards
the second half of 2022 with caution.
That said, management believe the diversity of the Group's different offerings
and the low levels of net debt following on from the summer trading to the end
of August 2022 will enable the Group to remain resilient. For the longer term,
the Group remains optimistic that economic events will bring opportunities.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the 52-week period ended 26 June 2022
Unaudited Audited
52 weeks ended 52 weeks ended
26 June 27 June
2022 2021
restated
Notes £'000 £'000
Revenue 40,116 13,541
Cost of sales (5,226) (1,781)
Gross profit 34,890 11,760
Operating expenses - excluding highlighted items (27,339) (15,085)
Highlighted items 4 848 2,746
Total operating expenses (26,491) (12,339)
Other operating income 90 5,693
Operating profit - excluding highlighted items 7,641 2,368
Highlighted items 4 848 2,746
Operating profit 8,489 5,114
Finance income 23 24
Finance cost (1,165) (991)
Profit before tax - excluding highlighted items 6,499 1,401
Highlighted items 4 848 2,746
Profit on ordinary activities before taxation 7,347 4,147
Taxation on ordinary activities 5 (1,590) 81
Profit for the period 5,757 4,228
Earnings per share - Basic* 6 15.4 11.3
Adjusted earnings per share - Basic** 6 13.6 5.6
Earnings per share - Diluted 6 15.2 11.3
Adjusted earnings per share - Diluted** 6 13.4 5.6
* 2022 basic weighted average number of shares in issue was 37.29m (2021:
37.29m).
** Adjusted basic and diluted earnings per share are calculated based on the
profit for the period adjusted for highlighted items.
No other comprehensive income was earned during the period (2021: nil).
Trading results for the 26-week period ended 26 June 2022 are shown in Note
10.
INTERIM CONDENSED CONSOLIDATED BALANCE SHEET
As at As at As at
26 June 27 June 28 June
2022 2021 2020
restated restated
£'000 £'000 £'000
Non-current assets
Intangible assets 11,004 10,457 9,467
Property, plant & equipment 28,608 29,008 25,763
Right-of-use assets 24,153 24,091 18,204
Net investment in finance leases - 635 689
Other receivables due in more than one year 206 209 367
63,971 64,400 54,490
Current assets
Inventories 931 731 562
Trade and other receivables 1,967 4,002 1,926
Income tax receivable - 5 -
Cash and cash equivalents 7,654 7,080 2,649
10,552 11,818 5,137
TOTAL ASSETS 74,523 76,218 59,627
EQUITY
Issued share capital 9,322 9,322 9,322
Share premium 15,993 15,993 15,993
Merger reserve (1,111) (1,111) (1,111)
Other reserve 452 452 452
Retained earnings/(deficit) 275 (5,482) (9,710)
Equity attributable to equity shareholders of the parent 24,931 19,174 14,946
TOTAL EQUITY 24,931 19,174 14,946
LIABILITIES
Current liabilities
Trade and other payables 8,928 8,321 3,945
Other financial liabilities - current 1,371 5,913 -
Lease liabilities - current 1,842 2,059 2,220
Income tax payable 1,297 - 35
13,438 16,293 6,200
Non-current liabilities
Other financial liabilities - non-current 11,271 14,456 16,797
Lease liabilities - non-current 24,359 25,715 21,684
Deferred tax liability 524 265 -
Other payables due in more than one year - 315 -
36,154 40,751 38,481
TOTAL LIABILITIES 49,592 57,044 44,681
TOTAL EQUITY AND LIABILITIES 74,523 76,218 59,627
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Issued share capital Share premium Other reserves Merger reserve Retained (deficit)/ Total shareholders' equity
earnings
Notes £'000 £'000 £'000 £'000 £'000 £'000
At 28 June 2021 9,322 15,993 452 (1,111) (5,381) 19,275
Correction to opening reserves 9 - - - - (101) (101)
At 28 June 2021 (restated) 9,322 15,993 452 (1,111) (5,482) 19,174
Profit for the period - - - - 5,757 5,757
As at 26 June 2022 9,322 15,993 452 (1,111) 275 24,931
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Audited
52 weeks to 52 weeks to
26 June 27 June
2022 2021
restated
£'000 £'000
Operating activities
Profit before tax 7,347 4,147
Net finance costs 1,142 967
Amortisation of intangible assets 71 80
Depreciation of property, plant and equipment 1,506 1,218
Depreciation of right-of-use assets 1,594 1,435
Impairment of net investment in finance lease - 47
Gain on derecognition of lease liabilities due to disposal (669) (1,838)
Gain on derecognition of lease liabilities due to waivers & concessions (280) (1,334)
Charge on recognition of in-substance fixed rent 264 -
Impairment of goodwill 643 -
Reversal of impairment of property, plant and equipment (424) -
Reversal of impairment of right-of-use assets (489) -
Decrease in provisions and deferred tax - (21)
Increase in inventories (200) (59)
Decrease/(increase) in trade and other receivables 2,043 (1,738)
Increase in trade and other payables 246 2,985
Interest paid on borrowings (462) (320)
Interest paid on lease liabilities (703) (641)
Interest received 23 6
Income tax paid (34) (52)
Net cash flow from operating activities 11,618 4,882
Investing activities
Purchase of property, plant and equipment, and intangible assets (681) (258)
Acquisition of business, net of cash acquired (254) (2,251)
Settlement of deferred consideration (1,000) -
Proceeds from disposal of property, plant and equipment - 11
Net cash flows used in investing activities (1,935) (2,498)
Financing activities
Proceeds from borrowings - 3,634
Repayment of borrowings (7,727) (1,291)
Principal paid on lease liabilities (1,382) (296)
Net cash flows (used in)/generated from financing activities (9,109) 2,047
Net increase in cash and cash equivalents 574 4,431
Cash and cash equivalents at beginning of period 7,080 2,649
Cash and cash equivalents at period end date 7,654 7,080
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL INFORMATION
The Brighton Pier Group PLC (registered number 08687172) is a public limited
company incorporated and domiciled in England and Wales. The Company's
ordinary shares are traded on AIM. Its registered address is 36 Drury Lane,
London, WC2B 5RR. The Company is the immediate and ultimate parent of the
"Group".
The Brighton Pier Group PLC owns and operates Brighton Palace Pier, one of the
leading tourist attractions in the UK. The Group is also a leading operator of
eight premium bars nationwide, eight indoor mini-golf sites and Lightwater
Valley theme park in North Yorkshire.
The principal accounting policies adopted by the Group are set out in Note 2.
2. ACCOUNTING POLICIES
The financial information for the 52-week periods ended 26 June 2022 and 27
June 2021 does not constitute statutory accounts for the purposes of section
435 of the Companies Act 2006. The financial information for the 52-week
period ended 26 June 2022 has not been audited. The Group's latest audited
statutory financial statements were for the 52 weeks ended 27 June 2021 and
these have been filed with the Registrar of Companies.
Information that has been extracted from the 27 June 2021 accounts is from the
audited accounts included in the annual report, published in November 2021, on
which the auditor gave an unmodified opinion and did not include a statement
under section 498 (2) or (3) of the Companies Act 2006. A copy of these
accounts can be found on the Group's website, www.brightonpiergroup.com
(http://www.brightonpiergroup.com) .
On 21 June 2022, the Group changed its accounting reference date (and
financial year end) from the end of June to the end of December. The Company
expects to report an extended audited set of results for the 78-week period to
25 December 2022, with a comparison to the latest audited accounts for the 52
weeks ended 27 June 2021. These results will also include a proforma set of
financial statements for the 52 weeks ended 25 December 2022 compared to the
52 weeks ended 26 December 2021.
The interim condensed consolidated financial statements for the 52 weeks ended
26 June 2022 have been prepared in accordance with the AIM Rules issued by the
London Stock Exchange. They do not include all the information and disclosures
required in the annual financial statements and should be read in conjunction
with the Group's annual financial statements as at 27 June 2021, which were
prepared using IFRS, in accordance with The International Accounting Standards
and European Public Limited-Liability Company (Amendment etc.) (EU Exit)
Regulations 2019.
The accounting policies used in preparation of the financial information for
the 52 weeks ended 26 June 2022 are the same accounting policies applied to
the Group's financial statements for the 52 weeks ended 27 June 2021. These
policies were disclosed in the 2021 Annual Report and are in accordance with
IFRS as set out in The International Accounting Standards and European Public
Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2019.
Prior period comparative figures have been restated from the original
financial statements published for the period ended 27 June 2021. This
restatement arose as a result of an unintentional omission of an extension for
the lease of premises at the Manchester golf site. Further details can be
found in Note 9.
NOTES to the INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3. SEGMENTAL INFORMATION
Management has determined the operating segments based on the reports reviewed
by the Chief Operating Decision Maker ("CODM") comprising the Board of
Directors. During the 52-week period ended 26 June 2022, there have been no
changes from prior periods in the measurement methods used to determine
operating segments and reported segment profit or loss.
The segmental information is split on the basis of those same profit centres -
however, management report only the contents of the consolidated statement of
comprehensive income and therefore no balance sheet information is provided on
a segmental basis in the following tables.
52-week period ended 26 June 2022 Brighton Golf Bars Lightwater Total segments Head office costs June 2022 consolidated total
Palace Pier Valley
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue 16,511 7,126 11,157 5,322 40,116 - 40,116
Cost of sales (2,481) (104) (2,043) (598) (5,226) - (5,226)
Gross profit 14,030 7,022 9,114 4,724 34,890 - 34,890
Gross profit % 85% 99% 82% 89% 87% 87%
Operating expenses (excluding depreciation and amortisation) (10,974) (2,896) (6,115) (3,092) (23,077) (1,091) (24,168)
Other income 6 35 49 - 90 - 90
Divisional earnings/(loss) 3,062 4,161 3,048 1,632 11,903 (1,091) 10,812
Highlighted items 848 848
Depreciation and amortisation (excluding right-of-use assets) (1,577) (1,577)
Depreciation of right of use assets (1,594) (1,594)
Net finance cost (excluding interest on lease liabilities) (439) (439)
Net finance cost arising on lease liabilities (703) (703)
Profit/(loss) before tax 3,062 4,161 3,048 1,632 11,903 (4,556) 7,347
Income tax (1,590) (1,590)
Profit/(loss) after tax 3,062 4,161 3,048 1,632 11,903 (6,146) 5,757
EBITDA (excluding highlighted items) 3,062 4,161 3,048 1,632 11,903 (1,091) 10,812
EBITDA 3,062 4,161 3,048 1,632 11,903 (1,091) 10,812
NOTES to the INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3. SEGMENTAL INFORMATION (continued)
52-week period ended Brighton Golf Bars Lightwater Valley* Total segments Head office costs 2021 consolidated total
27 June 2021 Palace Pier
restated
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue 9,673 2,385 1,277 206 13,541 - 13,541
Cost of sales (1,381) (28) (353) (19) (1,781) - (1,781)
Gross profit 8,292 2,357 924 187 11,760 - 11,760
Gross profit % 86% 99% 72% 91% 87% - 87%
Administrative expenses:
Other administrative expenses (excluding depreciation and amortisation) (7,313) (2,003) (2,023) (79) (11,418) (934) (12,352)
Other income:
Insurance income - 2,500 2,500 - 5,000 - 5,000
Local authority grant income 44 275 374 - 693 - 693
Divisional earnings/(loss) 1,023 3,129 1,775 108 6,035 (934) 5,101
Highlighted items 2,746 2,746
Depreciation and amortisation (excluding depreciation of right-of-use assets) (1,298) (1,298)
Depreciation of right-of-use assets (1,435) (1,435)
Net finance cost (excluding interest on lease liabilities) (321) (321)
Net finance costs arising on lease liabilities (646) (646)
Profit/(loss) before tax 1,023 3,129 1,775 108 6,035 (1,888) 4,147
Income tax - - - - - 81 81
Profit/(loss) after tax 1,023 3,129 1,775 108 6,035 (1,807) 4,228
EBITDA (excluding highlighted items) 1,023 3,129 1,775 108 6,035 (934) 5,101
EBITDA 1,023 3,129 1,775 108 6,035 (1,360) 4,675
*Results for Lightwater Valley reflect the period from acquisition on 17 June
2021 to 27 June 2021.
NOTES to the INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4. HIGHLIGHTED ITEMS
52 weeks to 52 weeks to
26 June 27 June
2022 2021
£'000 £'000
Acquisition and pre-opening costs
Acquisition costs - 254
Restructuring costs - 66
Impairment, closure and legal costs
Impairment of goodwill 643 -
Reversal of impairment of property, plant and equipment (424) -
Reversal of impairment of right-of-use assets (489) -
Charge on recognition of in-substance fixed rent 371 -
Gain on derecognition of lease liabilities for continuing sites using:
- IFRS 9 derecognition criteria (242) (590)
- IFRS 16 practical expedient (38) (744)
Gain on derecognition of lease liabilities for disposed sites (669) (1,838)
Other disposal costs - 106
Total (848) (2,746)
The above items have been highlighted in order to provide users of the
financial statements visibility of non-comparable costs included in the
Consolidated Statement of Comprehensive Income for this period.
The Group performed its annual impairment test in June 2022 (2021: June). The
Group considers the relationship between the trading performance of each CGU
and their book value when reviewing for indicators of impairment. Based on
management's review of the expected performance of the core estate, an
impairment of £643,000 (2021: nil) was identified in the Rushden site.
Conversely, with the removal of the final remaining COVID restrictions in the
period, the trading outlook in other sites is more favourable than in prior
reviews, resulting in a reversal of impairments applied to property, plant and
equipment of £424,000 (2021: nil) and right-of-use assets of £489,000 (2021:
nil). These reverse impairments that were applied as part of management's 2020
impairment review. Further details are provided in Note 8.
During the pandemic, the Group reached agreements with many of its landlords
to temporarily replace fixed rents repayable with a combination of fixed rents
and variable turnover rents, with the turnover element benchmarked to
pre-pandemic trading. At the time the agreements were made, there was
considerable uncertainty about whether the sites, particularly in the Bars
division, would be able to reopen and recover to pre-pandemic trading levels.
In line with accounting standards, lease liabilities were adjusted to reflect
only the fixed rent element of the lease agreements. Amounts derecognised were
included within highlighted items.
At June 2022, management reviewed the lease arrangements in place across the
Group in conjunction with the forecast performance at each leased site. With
most sites once again trading at or above pre-pandemic levels, management
assessed that the payment of turnover rent at some sites in the Bars division
was sufficiently certain as to make them in-substance fixed payments. In
accordance with IFRS 16, rent payments totalling £371,000 (2021: nil) have
been added back to the lease liability on the balance sheet, with the
corresponding entry being recognised within highlighted items in the Statement
of Comprehensive Income for the period ended 26 June 2022 in order to ensure
consistency with the treatment of previously derecognised liabilities in prior
periods.
The onset of the COVID pandemic prompted the IASB to issue a practical
expedient to provide relief for lessees from lease modification accounting for
rent concessions related to COVID. The practical expedient allows entities to
recognise the value of any agreed rent concessions in the Statement of
Comprehensive Income rather than adjusting the underlying right-of-use asset
and lease liability. The Group has recognised total credits of £38,000 (2021:
£744,000) within highlighted items in the Statement of Comprehensive Income
for the period ended 26 June 2022.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4. HIGHLIGHTED ITEMS (continued)
The practical expedient can only be used for rent concessions covering the
period to 30 June 2022. In some instances, the Group has agreed temporary
lease variations that extend beyond this date. These variations amount, in
substance, to forgiveness of rent payable without materially changing the
present value of total cash outflows over the life of the lease. In such
circumstances, the Group de-recognises the appropriate portion of its total
liability in accordance with the provisions of IFRS 9: Financial Instruments.
The value of these extended waivers is recognised in the Statement of
Comprehensive Income. The Group has recognised total credits of £242,000
(2021: £590,000) within highlighted items in the Statement of Comprehensive
Income during the period ended 26 June 2022.
Lease liabilities of £669,000 were extinguished during the period as a result
of the disposal of the Reading Smash site. The right-of-use asset relating to
this site was impaired to nil during the period ended 28 June 2020 and was
included in highlighted items for that period.
Period ended 27 June 2021
Acquisition costs of £254,000 relate to the Group's acquisition of Lightwater
Valley on 17 June 2021.
Restructuring costs of £66,000 incurred during the period ended 27 June 2021
relate to expenses incurred during a corporate simplification project
regarding entities in the Group's Bars division.
Gains on derecognition of lease liabilities occurred in relation to continuing
sites as result of renegotiated lease terms with landlords in the Bars and
Golf divisions. Of the amounts derecognised, £744,000 was derecognised using
the IFRS 16 COVID-19 practical expedient, with a further £590,000
derecognised as a result of applying the derecognition criteria laid out in
IFRS 9: Financial instruments.
Gains on derecognition of lease liabilities for disposed sites of £1,838,000
and other closure and legal costs of £106,000 arose as a result of the
disposal of leasehold sites in Bath, Wimbledon and Cambridge. The
corresponding right-of-use assets for these leasehold sites were impaired to
nil during the period ended 28 June 2020.
5. TAXATION
The tax charge has been calculated by reference to the expected effective
current and deferred tax rates for the 52-week period to the 26 June 2022
applied against the profit before tax for the period ended 26 June 2022. The
full year effective tax charge/(credit) on the underlying trading profit is
estimated to be £1.6 million (2021: £(0.1) million).
Deferred tax liabilities have increased as a result of fixed asset timing
differences, the utilisation of all available carried forward losses from
prior periods and an increase in the tax rate used to calculate the liability.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
6. EARNINGS PER SHARE
The weighted average number of shares in the period was:
52 weeks to 52 weeks to
26 June 2022 27 June
2021
Thousands of shares Thousands of shares
Ordinary shares 37,286 37,286
Weighted average number of shares - basic 37,286 37,286
Dilutive effect on ordinary shares from share options 517 -
Weighted average number of shares - diluted 37,803 37,286
Basic and diluted earnings per share are calculated by dividing the profit for
the period into the weighted average number of shares for the year. In order
to provide a measure of underlying performance, management have chosen to
present an adjusted profit for the period, which excludes items that may
distort comparability. Such items arise from events or transactions that fall
within the ordinary activities of the Group but which management believes
should be separately identified to help explain underlying performance.
52 weeks to 52 weeks to
26 June
2022
27 June
2021
restated
Earnings per share from profit for the period
Basic (pence) 15.4 11.3
Diluted (pence) 15.2 11.3
Adjusted earnings per share from profit for the period
Basic (pence) 13.6 5.6
Diluted (pence) 13.4 5.6
7. RECONCILIATION TO EBITDA
Group profit before tax can be reconciled to Group EBITDA as follows:
52 weeks to 52 weeks to
26 June
2022
EBITDA Reconciliation 27 June 2021
restated
Profit before tax for the year 7,347 4,147
Add back:
Depreciation of property plant and equipment 1,506 1,218
Depreciation of right-of-use-assets 1,594 1,435
Amortisation 71 80
Net finance costs 1,142 967
Highlighted items (848) (2,746)
Group EBITDA excluding highlighted items 10,812 5,101
Remove highlighted items 848 2,746
Add back:
Gains arising on lease liability derecognition (949) (3,172)
Impairment of goodwill 643 -
Reversal of impairment of property, plant and equipment and right-of-use (913) -
assets
Charge on recognition of in-substance fixed rent 371 -
Group EBITDA 10,812 4,675
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
8. IMPAIRMENT REVIEW
The Group performed its annual impairment test in June 2022 (2021: June). The
Group considers the relationship between the trading performance of each cash
generating unit ('CGU') and their book value when reviewing for indicators of
impairment. Each of the Group's sites represents a separate CGU, which were
assessed individually for impairment. The carrying value of each CGU consists
of the net book value of goodwill (where applicable), property, plant and
equipment and right-of-use assets. Goodwill is allocated to the site on which
it arose.
The Group has enjoyed a strong trading performance in the 52 weeks to 26 June
2022, following the full removal of COVID-related restrictions on 19 July
2021. Following the easing of the effects of the pandemic, the first half of
2022 created new economic uncertainty, with multiple factors leading to
significant increases in global food and energy prices, which in turn have led
to rapid inflation, and a widely predicted cost-of-living crisis and impending
recession. Management believes the diversity of the Group's offerings and
strong balance sheet will offer some resilience in the short and medium-term
as these factors are tackled. Longer-term, the Board remains optimistic about
the outlook for the Group.
The multiple factors have however been treated by management as an indicator
for impairment, prompting a full review of the recoverable amount of all CGUs
within the Group.
Based on management's review of the expected performance of the core estate,
an impairment of £643,000 was identified in the Rushden site of the Golf
division (2021: nil). Conversely, with the removal of the final remaining
COVID restrictions in the period, the trading outlook in other sites is more
favourable than in prior reviews, resulting in a reversal of impairments
applied to property, plant and equipment of £424,000 (2021: nil) and
right-of-use assets of £489,000 (2021: nil). The original impairments were
applied as part of the June 2020 impairment review, when the uncertainty
caused by the COVID pandemic resulted in a highly cautious trading outlook for
the Group. The impairments and reversals of impairment that were recognised
following the June 2022 Group impairment review, along with their impact on
the carrying value of the Group's CGUs, are detailed in the table below:
Carrying value prior to June 2022 impairment review (Impairment)/ Carrying value carried forward after June 2022 impairment review
Reversal of impairment
£'000 £'000 £'000
Goodwill 10,257 (643) 9,614
Property, plant and equipment 28,094 424 28,518
Right-of-use assets 23,307 489 23,796
Total carrying value of CGUs 61,658 270 61,928
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
9. LEASE CONTRACT ACCOUNTING PRIOR PERIOD RESTATEMENT
In June 2022, the Group undertook a detailed review of its leasing contracts
and discovered that a signed lease extension for the premises at the
Manchester golf site had been unintentionally omitted during the Group's
initial adoption of IFRS 16 in 2019 due to the presence of a landlord break
clause in March 2023. As a consequence, this 10-year extension period (from
March 2023 to March 2033) had not been reflected in the measurement of the
right-of-use asset and associated lease liability. The effect of this
restatement, which is shown below, is primarily on the Balance Sheet, with an
increase to the right-of-use asset of £0.9 million, and a £1.0 million
increase to the associated lease liability as of 27 June 2021. The correction
to opening reserves of the remaining £0.1 million reflects the net impact on
the Statements of Comprehensive Income in prior periods and relates to the
higher depreciation and interest charges on the larger right-of-use asset and
lease liability respectively.
27 June 2021 Increase/ 27 June 2021 restated
(Decrease)
Balance Sheet (extract) £'000 £'000 £'000
Right-of-use assets 23,191 900 24,091
Lease liabilities (26,773) (1,001) (27,774)
Net assets 19,275 (101) 19,174
Retained deficit (5,381) (101) (5,482)
Total equity 19,275 (101) 19,174
28 June 2020 Increase/ 28 June 2020 restated
(Decrease)
Balance Sheet (extract) £'000 £'000 £'000
Right-of-use assets 17,283 921 18,204
Lease liabilities (22,933) (971) (23,904)
Net assets 14,996 (50) 14,946
Retained deficit (9,660) (50) (9,710)
Total equity 14,996 (50) 14,946
27 June 2021 Decrease 27 June 2021 restated
Statement of Comprehensive Income (extract) £'000 £'000 £'000
Operating expenses (12,318) (21) (12,339)
Operating profit 5,135 (21) 5,114
Net finance costs (937) (30) (967)
Profit on ordinary activities before taxation 4,198 (51) 4,147
Profit for the period 4,279 (51) 4,228
28 June 2020 Decrease 28 June 2020 restated
Statement of Comprehensive Income (extract) £'000 £'000 £'000
Operating expenses (28,446) (21) (28,467)
Operating loss (9,154) (21) (9,175)
Net finance costs (1,053) (29) (1,082)
Loss on ordinary activities before taxation (10,207) (50) (10,257)
Loss for the period (9,493) (50) (9,543)
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
10. INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPRESHENSIVE INCOME FOR THE 26 WEEK PERIOD ENDED 26 JUNE 2022
Unaudited Unaudited
26 weeks ended 26 weeks ended
26 June 27 June
2022 2021
£'000 £'000
Revenue 17,332 5,342
Cost of sales (2,238) (689)
Gross profit 15,094 4,653
Operating expenses - excluding highlighted items (13,912) (7,265)
Highlighted items 44 325
Total operating expenses (13,868) (6,940)
Other operating income 90 4,293
Operating profit - excluding highlighted items 1,272 1,681
Highlighted items 44 325
Operating profit 1,316 2,006
Finance income - 8
Finance cost (615) (497)
Profit before tax and highlighted items 657 1,192
Highlighted items 44 325
Profit on ordinary activities before taxation 701 1,517
Taxation on ordinary activities (281) 81
Profit for the period 420 1,598
Earnings per share - Basic 1.1 4.1
Adjusted earnings per share - Basic 1.1 3.7
Earnings per share - Diluted 0.9 4.1
Adjusted earnings per share - Diluted 0.9 3.7
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