REG - Brighton Pier Group - Interim Results
25/09/2023 07:00
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RNS Number : 4394N Brighton Pier Group PLC (The) 25 September 2023
25 September 2023
The Brighton Pier Group PLC
(the "Company" or the "Group")
Unaudited interim results for the 6 months ended 25 June 2023
The Brighton Pier Group today announces its unaudited results for the 6 months
ended 25 June 2023. Total revenues for the Group were £16.2 million (2022:
£17.3 million), following a challenging second quarter as previously
announced by the Group. The majority of this sales decline was from the Bars
division which faced tough comparable numbers, following exceptionally strong
trading from a post-pandemic surge in demand in the first half of 2022.
Ongoing inflationary pressures, in particular to food, beverage and staff
costs have had a significant impact on the Group's operating margins in the
first half of 2023, resulting in lower earnings than in the previous year.
Financial highlights
• Total revenue in the period was £16.2 million (2022: £17.3
million).
• Group EBITDA* was £1.4 million (2022: £3.0 million).
• Group gross margin was 86% (2022: 87%).
• Loss before tax (excluding highlighted items) was £(1.0)
million (2022: profit of £0.7 million).
• Adjusted EPS was (1.7)p (2022: 0.9p).
• Net cash flow from operations was £3.2 million (2022: £4.4
million).
• Net debt was £4.7 million (25 December 2022: £7.1
million).
* EBITDA is detailed in Note 7 to the financial statements.
Principal developments
• Brighton Palace Pier sales performance was up 2% versus
2022, but down £(0.2) million on EBITDA at £0.5 million (2022: £0.7
million).
• The Bars division suffered from a contraction in consumers'
disposable incomes resulting from the challenging macroeconomic environment,
with sales down across the estate.
• The Golf division saw lower footfall across the estate in
June and higher costs but with the exception of June, trading has been
consistent, with the division generating £1.4 million of EBITDA (2022: £1.9
million).
• Lightwater Valley added new dinosaur-themed attractions for
2023. Admissions were down versus the prior year primarily due to wet weather,
but the park achieved a new weekend record number of visitors during the
Coronation of King Charles III in May.
Outlook
• As reported in the 25 July 2023 trading update, the weekend
train strikes, exacerbated by exceptionally poor weather in July and August,
and the temporary restriction of access following a fire at a major hotel
opposite the entrance to the Pier towards the end of July, resulted in sales
and earnings being lower than expected.
• These factors continued to affect trading in the 12-week
period ending 17 September 2023 resulting in total sales of £12.3 million,
down £(0.3) million versus the previous year (2022: £12.6 million).
• Whilst the board has been encouraged to see improved trading
in the first 3 weeks of September, macroeconomic challenges continue to impact
the business. This, together with the weaker than expected summer trading
period, has led the Board to conclude that operating profit for the current
financial year is likely to be below current expectations.
• The Group's outlook in the short-to-medium term remains
cautious.
Anne Ackord, Chief Executive Officer, said:
"As highlighted in our last trading update, the Group is navigating a
challenging environment, with persistent high inflation and cautious spending
by consumers negatively impacting trading. When combined with the ongoing cost
pressures, this has resulted in the Group recording lower than expected sales
and earnings in the first half of 2023.
Trading in the 12 weeks to 17 September 2023 has been further impacted by
events outside of our control. The regular weekend train strikes in particular
have reduced visitor numbers on the Pier by 18% versus comparable weeks in
2022. Combined with the unseasonably wet weather and the hotel fire that
disrupted sales on the Pier for the final two weeks of July (two of the top
ten trading weeks of the year), trading has been unusually difficult.
The Group continues to be cash generative and has a robust balance sheet,
making it well placed to weather the macroeconomic challenges and execute its
longer-term growth strategy.
I believe as a result there is significant upside opportunity for the Group in
a more typical year".
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
Cavendish 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 outdoor attraction in England with over
4.6 million visitors in 2022.
· 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 Family 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's strategy remains focused on capitalising on the potential of its
diversified portfolio of leisure and family entertainment assets in the UK.
However, the Group is navigating a uniquely challenging trading environment,
with persistently high inflation leading to a decline in consumer confidence
and discretionary spend. This, combined with significant ongoing cost
increases, has led to lower sales and earnings in the 6 months ended 25 June
2023 (2022: 6 months ended 26 June 2022).
Operational review
The first 13-week period to the end of March 2023 saw the Group trading in
line with expectations. A comparatively mild winter resulted in strong initial
demand at the Pier, but this was offset by the wettest March in over 40 years.
The high-margin Golf division continued to perform well during this period.
The Bars division saw some softness in trading but was behind 2022 primarily
due to exceptional trading following the surge in demand seen post-pandemic.
Lightwater Valley was closed during this time.
In the latter 13-week period, which typically represents approximately 60% of
sales in the 6 month period, trading suffered across the Group as previously
announced, with continued wet weather in April leading to lower admissions on
the Pier and at Lightwater Valley across the key Easter period. Rail
disruption also affected footfall to the Pier and some Bars sites.
Cost increases during this period were particularly severe, with significant
increases to food prices contributing to lower gross margins at the Pier and
Lightwater Valley, which were both down 3% versus 2022. Wage increases,
meanwhile, resulted in lower operating margins across the Group.
Financial review and KPIs
Total Group revenue for the period was £16.2 million (2022: £17.3 million).
Revenue split by division:
• Pier
division
£7.5 million (2022: £7.3 million)
• Golf
division
£3.2 million (2022: £3.4 million)
• Bars
division
£4.1 million (2022: £5.1 million)
• Lightwater
Valley
£1.4 million (2022: £1.5 million)
Total Group EBITDA for the period was £1.4 million (2022: £3.0 million).
EBITDA split by division:
• Pier
division
£0.5 million (2022: £0.7 million)
• Golf
division
£1.4 million (2022: £1.9 million)
• Bars
division
£0.4 million (2022: £1.1 million)
• Lightwater
Valley
£(0.3) million (2022: £(0.1) million)
• Group overhead
costs
£(0.6) million (2022: £(0.6) million)
Group gross margin for the period was 86% (2022: 87%).
Highlighted items totalling £3.0 million of charges (2022: £nil) were
recognised during the period. These charges reflect:
• £1.1 million - impairment of goodwill in Lightwater Valley;
and
• £1.9 million - impairment charges to property, plant and
equipment and right-of-use assets in the Bars division.
Group loss on ordinary activities before tax (excluding highlighted items) was
£(1.0) million (2022: profit of £0.7 million).
Group loss on ordinary activities after tax was £(3.6) million (2022: profit
of £0.4 million).
In summary, for the 6 month period ended 25 June 2023:
•
Revenue:
£16.2 million (2022: £17.3 million)
• Operating (loss)/profit:
£(3.2) million (2022: £1.3 million)
• Group EBITDA:
£1.4 million (2022: £3.0 million)
• Operating (loss)/profit excluding highlighted items*:
£(0.3) million (2022:
£1.3 million)
• (Loss)/profit before tax excluding highlighted items*:
£(1.0) million (2022:
£0.7 million)
• (Loss)/profit before tax:
£(3.9) million (2022: £0.7 million)
• (Loss)/profit for the
period:
£(3.6) million (2022: £0.4 million)
• Net debt at the end of the period:
£4.7
million (25 Dec 2022: £7.1 million)
• Basic (losses)/earnings per share excluding highlighted
items*: (1.7)p
(2022: 0.9p)
• Basic (losses)/earnings per share:
(9.6)p (2022: 1.1p)
• Diluted (losses)/earnings per share excluding highlighted
items*: (1.7)p
(2022: 0.9p)
• Diluted (losses)/earnings per share:
(9.6)p (2022: 1.1p)
* Highlighted items are detailed in Note 4 to the financial statements.
Cash flow and balance sheet
The Group generated net cash flow from operations of £3.2 million (2022:
£4.4 million), after interest and tax payments, all of which was available
for investment or the repayment of debt.
Capital expenditure in the period totalled £0.4 million (2022: £0.6 million)
across the Group.
During the period, the Group made net debt repayments of £0.4 million (2022:
£2.8 million), which includes the final repayment of the Group's Coronavirus
Business Interruption Loans (totalling £5.0 million).
Total bank debt at the end of the period was £10.9 million (25 December 2022:
£11.3 million). With the Group's Coronavirus Business Interruption Loans now
fully repaid, remaining debt relates to the term loan.
At the period end, cash and cash equivalents were £6.2 million (25 December
2022: £4.2 million).
Consequently, net debt at the period end stood at £4.7 million (25 December
2022: £7.1 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 £7.2 million as at the period
end.
Details of the Group's banking covenants can be found on page 90 of the
December 2022 Annual Report.
Trading for the 12 weeks to the 17 September 2023
Total sales for the 12-week period to 17 September 2023 were £12.3 million,
down £(0.3) million versus the previous year (2022: £12.6 million). This
shortfall was primarily due to a significant reduction in footfall to the
Pier, which saw visitor numbers decrease by 18% compared to 2022.
Total sales for the Pier were £6.0 million, down £(0.5) million versus 2022
(2022: £6.5 million), due to a combination of one-off factors previously
noted.
Conversely, the poor weather resulted in stronger trading in the Golf
division, where sites are located inside larger shopping centres. Total sales
of £1.7 million were £0.2 million higher than the previous year (2022: £1.5
million).
Lightwater Valley traded ahead of 2022, with total sales of £2.7 million, up
£0.3 million (2022: £2.4 million). This was due to increased visitor numbers
to the park, which were 24% up on last year principally due to warm weather in
September and several different promotional offers that were made available to
guests. As a result of these offers, overall spend per head was lower than in
2022.
The Bars division continues to be impacted by the headwinds in the UK economy.
Its younger demographic has been more severely affected by price inflation,
resulting in lower spends and reduction in numbers of visits. Total sales were
£1.9 million, down £(0.3) million versus last year (2022: £2.2million).
Outlook and strategy
While current economic conditions continue to create an uncertain trading
environment, the disappointing trading seen over the key summer months has
largely been the result of circumstances beyond the Group's control, and while
the outlook for the short-to-medium term must remain one of caution, there are
nonetheless encouraging signs.
Trading in the Golf division remains robust and, going forwards, is expected
to continue to hold up well.
Lightwater Valley is still trading below the exceptional summer seen following
acquisition of the park by the Group in June 2021. However, visitor numbers in
summer 2023 were above the prior year equivalent. The Group will begin to
implement improvement processes to further increase revenues per visitor,
particularly in relation to food, beverage and retail. This will be combined
with structural changes that will enable the cost base to be optimised in
advance of the next peak trading period in summer 2024. The project to install
circa twenty pod-type units for rental is still in the early stages but is
expected to start once the planning variations are approved.
Similarly, spend per head at the Pier was ahead of last year and prior to the
issues experienced across the summer months, sales were tracking ahead of
2022. The Pier retains its iconic status, attracting millions of visitors
every year, and the Group urges those involved in the rail strikes to agree a
resolution so that the ongoing disruption does not continue into 2024.
In the Bars division, the combination of decline in consumer discretionary
income, coupled with ongoing train strikes targeted at Friday and Saturday
trading sessions, is likely to continue to bear down on sales and profits over
the remainder of the current financial year and potentially into 2024.
Inflationary cost pressures are expected to continue to present challenges
across the Group. Where price rises cannot be fully passed on, the Group will
instead implement cost-saving initiatives in order to preserve future cash
flows and earnings.
Poor weather over the summer disproportionately impacts the Group's trading
performance. The diverse experiences offered by the Group's four operating
divisions continue to prove attractive to our customers, and the Board
believes that the strength of these different offerings will drive the
business forwards over the longer term.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the 6 month period ended 25 June 2023
Unaudited Unaudited Audited
6 months ended 6 months ended 18 months ended
25 June 26 June 25 December
2023 2022 2022
Notes £'000 £'000 £'000
Revenue 16,204 17,332 58,905
Cost of sales (2,340) (2,238) (7,748)
Gross profit 13,864 15,094 51,157
Operating expenses - excluding highlighted items (14,143) (13,912) (42,373)
Highlighted items 4 (2,958) 44 451
Total operating expenses (17,101) (13,868) (41,922)
Other operating income 21 90 197
Operating (loss)/profit - excluding highlighted items (258) 1,272 8,981
Highlighted items 4 (2,958) 44 451
Operating (loss)/profit (3,216) 1,316 9,432
Finance income 68 - 24
Finance cost (782) (615) (1,817)
(Loss)/profit before tax - excluding highlighted items (972) 657 7,188
Highlighted items 4 (2,958) 44 451
(Loss)/profit on ordinary activities before taxation (3,930) 701 7,639
Tax credit/(charge) on ordinary activities 5 333 (281) (1,266)
(Loss)/profit for the period (3,597) 420 6,373
(Losses)/earnings per share - Basic 6 (9.6) 1.1 17.1
Adjusted (losses)/earnings per share - Basic* 6 (1.7) 0.9 16.4
(Losses)/earnings per share - Diluted 6 (9.6) 1.1 16.9
Adjusted (losses)/earnings per share - Diluted* 6 (1.7) 0.9 16.2
* Adjusted basic and diluted earnings per share are calculated based on the
profit for the period adjusted for highlighted items.
2023 basic weighted average number of shares in issue was 37.29m (2022:
37.29m).
2023 diluted weighted average number of shares in issue was 37.57m (2022:
37.29m).
No other comprehensive income was earned during the period (2022: £nil).
INTERIM CONDENSED CONSOLIDATED BALANCE SHEET
At At At
25 June 26 June 25 December
2023 2022 2022
£'000 £'000 £'000
Non-current assets
Intangible assets 8,480 11,004 9,545
Property, plant & equipment 27,464 28,608 28,139
Right-of-use assets 22,878 24,153 25,223
Other receivables due in more than one year - 206 -
58,822 63,971 62,907
Current assets
Inventories 1,046 931 815
Trade and other receivables 3,288 1,967 1,835
Deferred tax assets 333 - -
Cash and cash equivalents 6,191 7,654 4,208
10,858 10,552 6,858
TOTAL ASSETS 69,680 74,523 69,765
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 (deficit)/earnings (2,700) 275 897
Equity attributable to equity shareholders of the parent 21,956 24,931 25,553
TOTAL EQUITY 21,956 24,931 25,553
LIABILITIES
Current liabilities
Trade and other payables 8,189 8,928 3,833
Other financial liabilities 485 1,371 11,327
Lease liabilities 2,154 1,842 1,808
Income tax payable 987 1,297 987
Provisions 119 - 119
11,934 13,438 18,074
Non-current liabilities
Other financial liabilities 10,400 11,271 -
Lease liabilities 24,617 24,359 25,365
Deferred tax liability 512 524 512
Other payables 261 - 261
35,790 36,154 26,138
TOTAL LIABILITIES 47,724 49,592 44,212
TOTAL EQUITY AND LIABILITIES 69,680 74,523 69,765
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
6 months to 6 months to 18 months to
25 June 26 June 25 December
2023 2022 2022
£'000 £'000 £'000
Operating activities
(Loss)/profit before tax (3,930) 701 7,639
Net finance costs 714 615 1,793
Amortisation of intangible assets 31 35 126
Depreciation of property, plant and equipment 750 751 2,372
Depreciation of right-of-use assets 866 897 2,453
Gain on derecognition of lease liabilities due to disposal - - (688)
Gain on derecognition of lease liabilities due to waivers & concessions - (145) (402)
Charge on recognition of in-substance fixed rent - 264 268
Impairment charge - goodwill 1,070 643 985
Impairment charge/(credit) - property, plant and equipment 303 (424) (424)
Impairment charge/(credit) - right-of-use assets 1,585 (489) (489)
(Decrease)/increase in provisions - (258) 119
Increase in inventories (231) (219) (84)
Increase/(decrease) in trade and other receivables (1,453) (714) 2,381
Increase/(decrease) in trade and other payables 4,229 3,361 (3,539)
Interest paid on borrowings (411) (247) (712)
Interest paid on lease liabilities (371) (368) (1,105)
Interest received 68 - 24
Income tax paid - (34) (32)
Net cash inflow from operating activities 3,220 4,369 10,685
Investing activities
Purchase of property, plant and equipment and intangible assets (415) (582) (1,296)
Proceeds from disposal of property, plant and equipment 95 - 18
Payment of deferred consideration to former Lightwater Valley Attractions - - (1,000)
Limited shareholders
Net cash outflow used in investing activities (320) (582) (2,278)
Financing activities
Repayment of borrowings (442) (2,805) (9,063)
Principal paid on lease liabilities (475) (584) (2,216)
Net cash outflow used in financing activities (917) (3,389) (11,279)
Net increase/(decrease) in cash and cash equivalents 1,983 398 (2,872)
Cash and cash equivalents at beginning of period 4,208 7,256 7,080
Cash and cash equivalents at end of period 6,191 7,654 4,208
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unaudited Issued share capital Share premium Other reserves Merger reserve Retained Total shareholders' equity
earnings/
(deficit)
£'000 £'000 £'000 £'000 £'000 £'000
At 25 December 2022 9,322 15,993 452 (1,111) 897 25,553
Loss for the period - - - - (3,597) (3,597)
At 25 June 2023 9,322 15,993 452 (1,111) (2,700) 21,956
Unaudited Issued share capital Share premium Other reserves Merger reserve Retained Total shareholders'
(deficit)/ equity
earnings
£'000 £'000 £'000 £'000 £'000 £'000
At 26 December 2021 9,322 15,993 452 (1,111) (145) 24,511
Profit for the period - - - - 420 420
At 26 June 2022 9,322 15,993 452 (1,111) 275 24,931
Audited Issued share capital Share premium Other reserves Merger reserve Retained Total shareholders' equity
(deficit)/
earnings
£'000 £'000 £'000 £'000 £'000 £'000
At 27 June 2021 9,322 15,993 452 (1,111) (5,476) 19,180
Profit for the period - - - - 6,373 6,373
At 25 December 2022 9,322 15,993 452 (1,111) 897 25,553
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 Family Adventure 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 6 month periods ended 25 June 2023 and 26
June 2022 does not constitute statutory accounts for the purposes of section
435 of the Companies Act 2006. The financial information for the 6 month
period ended 25 June 2023 has not been audited. The Group's latest audited
statutory financial statements were for the 18 month period ended 25 December
2022 and these have been filed with the Registrar of Companies.
Information that has been extracted from the 25 December 2022 accounts is from
the audited accounts included in the annual report, published in May 2023, 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) .
The interim condensed consolidated financial statements for the 6 months ended
25 June 2023 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 25 December 2022, 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 6 months ended 25 June 2023 are the same accounting policies applied to
the Group's financial statements for the 18 months ended 25 December 2022,
with the exception of income tax which has been calculated using the forecast
effective tax rate for the 12 months ending 31 December 2023 applied to the
loss before tax for the 6 months ending 25 June 2023. These policies were
disclosed in the 2022 Annual Report.
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 6 month period ended 25 June 2023, the Group changed its
measurement method of reported segment profit or loss, with depreciation
charges on property, plant and equipment and right-of-use assets, amortisation
charges on intangible assets and net finance costs arising on lease
liabilities now allocated between the relevant operating segments, having
previously been grouped within head office costs.
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.
6 month period ended 25 June 2023 Brighton Golf Bars Lightwater Total segments Head office costs June 2023 consolidated total
Palace Pier Valley
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue 7,507 3,147 4,105 1,445 16,204 - 16,204
Cost of sales (1,353) (57) (762) (168) (2,340) - (2,340)
Gross profit 6,154 3,090 3,343 1,277 13,864 - 13,864
Gross profit % 82% 98% 81% 88% 86% - 86%
Operating expenses (excluding depreciation and amortisation) (5,639) (1,678) (2,966) (1,574) (11,857) (639) (12,496)
Other income - - - - - 21 21
Divisional earnings/(loss) 515 1,412 377 (297) 2,007 (618) 1,389
Highlighted items - - (1,888) (1,070) (2,958) - (2,958)
Depreciation and amortisation (excluding right-of-use assets) (222) (219) (181) (159) (781) - (781)
Depreciation of right of use assets (3) (430) (363) (51) (847) (19) (866)
Operating profit/(loss) 290 763 (2,055) (1,577) (2,579) (637) (3,216)
Net finance cost (excluding interest on lease liabilities) - - - - - (343) (343)
Net finance cost arising on lease liabilities - (138) (143) (88) (369) (2) (371)
Profit/(loss) before tax 290 625 (2,198) (1,665) (2,948) (982) (3,930)
Income tax - - - - - 333 333
Profit/(loss) after tax 290 625 (2,198) (1,665) (2,948) (649) (3,597)
EBITDA 515 1,412 377 (297) 2,007 (618) 1,389
NOTES to the INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3. SEGMENTAL INFORMATION (continued)
6 month 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 7,341 3,407 5,113 1,471 17,332 - 17,332
Cost of sales (1,116) (50) (943) (129) (2,238) - (2,238)
Gross profit 6,225 3,357 4,170 1,342 15,094 - 15,094
Gross profit % 85% 99% 82% 91% 87% - 87%
Operating expenses (excluding depreciation and amortisation) (5,578) (1,482) (3,088) (1,499) (11,647) (582) (12,229)
Other income 6 35 49 - 90 - 90
Divisional earnings/(loss) 653 1,910 1,131 (157) 3,537 (582) 2,955
Highlighted items - (158) 202 - 44 - 44
Depreciation and amortisation (excluding right-of-use assets) (246) (219) (152) (169) (786) - (786)
Depreciation of right of use assets (5) (430) (400) (46) (881) (16) (897)
Operating profit/(loss) 402 1,103 781 (372) 1,914 (598) 1,316
Net finance cost (excluding interest on lease liabilities) - - - - - (247) (247)
Net finance cost arising on lease liabilities (1) (138) (135) (92) (366) (2) (368)
Profit/(loss) before tax 401 965 646 (464) 1,548 (847) 701
Income tax - - - - - (281) (281)
Profit/(loss) after tax 401 965 646 (464) 1,548 (1,128) 420
EBITDA 653 1,910 1,131 (157) 3,537 (582) 2,955
4. HIGHLIGHTED ITEMS
6 months to 6 months to
25 June 2023 26 June 2022
£'000 £'000
Impairment charge - goodwill 1,070 643
Impairment charge/(credit) - property, plant and equipment 303 (424)
Impairment charge/(credit) - right-of-use assets 1,585 (489)
Turnover rent charge - 107
Charge on recognition of in-substance fixed rent - 264
Gain on derecognition of lease liabilities using IFRS 9 derecognition criteria - (145)
Total 2,958 (44)
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4. HIGHLIGHTED ITEMS (continued)
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.
6 month period ended 25 June 2023
The Group performed an impairment test in June 2023, resulting in total
impairments applied of £2,958,000, split between goodwill (£1,070,000),
property, plant and equipment (£303,000) and right-of-use assets
(£1,585,000). See Note 8 for further details.
6 month period ended 26 June 2022
The Group performed an impairment test in June 2022, resulting in an
impairment of £643,000 in the Rushden site, and 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 reversals were in respect
of impairments that were applied as part of management's 2020 impairment
review.
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 £264,000 were 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 6 month period ended 26 June 2022 in order to ensure consistency with
the treatment of previously derecognised liabilities in prior periods.Prior to
this assessment having been made, turnover rent recognised within highlighted
items totalled £107,000.
As a result of the COVID-19 pandemic, the Group agreed temporary lease
variations that amounted, in substance, to forgiveness of rent payable without
materially changing the present value of total cash outflows over the life of
the lease. Consequently, the Group de-recognised 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 recognised total credits of
£144,000 within highlighted items in the Statement of Comprehensive Income
during the period ended 26 June 2022.
5. TAXATION
The tax credit of £0.3 million (2022: charge of £0.3 million) has been
calculated by reference to the expected effective current and deferred tax
rates for the 12 month period to the 31 December 2023 applied against the loss
before tax for the period ended 25 June 2023. The full year effective tax
charge on the underlying trading profit is estimated to be £nil (18 months
ended 25 December 2022: £1.3 million).
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
6. (LOSSES)/EARNINGS PER SHARE
The weighted average number of shares in the period was:
6 months to 6 months to
25 June 2023 26 June 2022
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 286 -
Weighted average number of shares - diluted 37,572 37,286
Basic and diluted (losses)/earnings per share are calculated by dividing the
(loss)/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 (loss)/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.
6 months to 6 months to
25 June 2023 26 June 2022
(Losses)/earnings per share from (loss)/profit for the period
Basic (pence) (9.6) 1.1
Diluted (pence) (9.6) 1.1
Adjusted (losses)/earnings per share from (loss)/profit for the period
Basic (pence) (1.7) 0.9
Diluted (pence) (1.7) 0.9
7. RECONCILIATION TO EBITDA
Group (loss)/profit before tax for the period can be reconciled to Group
EBITDA as follows:
6 months to 6 months to 26 June 2022
25 June 2023
EBITDA Reconciliation
(Loss)/profit before tax for the period (3,930) 701
Add back:
Depreciation of property, plant and equipment 750 751
Depreciation of right-of-use-assets 866 897
Amortisation of intangible assets 31 35
Net finance costs 714 615
Highlighted items 2,958 (44)
Group EBITDA 1,389 2,955
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
8. IMPAIRMENT REVIEW
The Group performed an impairment test in June 2023, with continuing
inflationary pressures and decline in consumer confidence being considered by
management to be indicators of impairment, prompting a full review of the
recoverable amount of all CGUs within the Group. 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.
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.
Based on management's review of the expected performance of the core estate,
an impairment to goodwill of £1,070,000 was identified in Lightwater Valley
(2022: £nil). Further impairments were applied to property, plant and
equipment of £303,000 (2022: £nil) and right-of-use assets of £1,585,000
(2022: £nil) in the Bars division. The impairments that were recognised
following the June 2023 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 2023 impairment review Impairment Carrying value carried forward after June 2023 impairment review
£'000 £'000 £'000
Goodwill 9,272 (1,070) 8,202
Property, plant and equipment 27,767 (303) 27,464
Right-of-use assets 24,463 (1,585) 22,878
Total carrying value of CGUs 61,502 (2,958) 58,544
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