Chairman's statement

The 52 weeks ended 27 June 2021 was Brighton Pier Group's second financial year impacted by the COVID-19 pandemic. Mandatory trading restrictions have had a particularly devastating impact to the travel, hospitality, entertainment and leisure sectors during this period.

The Group rose to meet these challenges, highlighting its particular strengths:

·       Firstly, the Group reaped the benefits of its diversified portfolio of businesses. Whilst the late-night bars were almost entirely closed throughout the whole 52-week financial period, the Pier and Golf divisions were able to reopen for trade during the key summer months of July to September 2020. The Pier benefitted from the Group's significant investment in its food and drink facilities during 2017. This £1.3m investment significantly increased outdoor seating capacity and enabled visitors to remain safely distanced.  This summer trading period contributed approximately £2 million of earnings to the Group.

·       Secondly, the Group's management team and staff reacted with speed to reduce the financial impact of the closures by working together with our suppliers, landlords and bank to reduce cash burn and to provide additional funding. We are grateful not just to our suppliers and landlords but also to our staff, who all took pay cuts while our venues were closed. The Group also benefitted from targeted government support with furlough (which enabled us to retain a large part of the workforce), rates relief, VAT reductions and the 'Eat out to Help out' scheme. With the backing of our bank and the Coronavirus Business Interruption Loan (CBIL) scheme, the Group raised £5 million of additional debt. This combination of strong and supportive management, staff, bank, suppliers, landlords and government help avoided any need for formal restructuring or new equity capital.

·       Thirdly, with further support from our bank, we purchased Lightwater Valley which is one of the UK's premier theme parks. Located in North Yorkshire, it owns 175 acres of landscaped parkland, numerous attractions and hospitality offerings making it a popular day out for families. This acquisition is an excellent example of how the Group can create a growth enterprise, operating across a wide variety of leisure and entertainment assets in the UK. I believe there are more opportunities available to the Group in this sector and we continue to assess attractive acquisition opportunities in family leisure and the broader leisure sector.

·       Lastly, the sensible decisions taken before the pandemic to put in place the right business interruption insurance in the Bars and Golf divisions. These policies were able to respond to the pandemic, resulting in payments totalling £5 million. Whilst these payments do not in any way cover all the losses incurred since the start of the pandemic; this insurance has provided important financial protection to the Group.

With the easing of restrictions during summer 2021, the Group's diversified offering has been in prime position to capitalise on pent up demand for leisure experiences. With the Pier and Golf divisions both open, the addition of Lightwater Valley for the full 13 weeks and the Bars finally open for 10 weeks, total sales for the 13-week period to the end of September 2021 were £15.9 million. This is 145% over the same period in 2020, and 44% ahead of the same (pre-Covid) period in 2019 (or 30% ahead of 2019 if benefit from the temporary VAT concession is excluded). This strong summer 2021 trading performance, coupled with the benefits from VAT and rates relief, indicates that this year could be an exceptional opportunity for the Group to recover some of its lost earnings if it is able to continue trading without further restrictions.

I hope that the regained fundamental freedoms enjoyed by so many over the summer can continue without the reimposition of restrictions in future. It remains my belief that the economic, cultural and social disruption of these interventions can cause significant harm to large sections of society - particularly the young and the vulnerable.

In the longer term, I believe Lightwater Valley provides a long-term growth opportunity for the Group to develop and expand the park. We have a strong team at The Brighton Pier Group and I believe we are well placed to take advantage of growth opportunities when they arise.

Directorate

There have been no changes in the Board during this financial period.

Dividend

The Board does not propose to pay any dividend in respect of the 2021 financial year.

Luke Johnson

Chairman

1 November 2021

Our business model

The Brighton Pier Group PLC (the 'Group') owns and trades Brighton Palace Pier, as well as eight premium bars nationwide, eight indoor mini-golf sites and the Lightwater Valley theme park, acquired on 17 June 2021.

The Group operates as four 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 was the fifth most popular free attraction in the UK prior to the pandemic, with over 4.9 million visitors in 2019, making it the UK's most visited landmark outside of London.

The Golf division (which trades as Paradise Island Adventure Golf) operates eight indoor mini-golf sites at high footfall retail and leisure centres. The business capitalises on the increasing convergence between retail and leisure, offering an accessible and traditional activity for the whole family. The sites are located in various towns and cities across the UK, each one offering two unique 18-hole mini-golf courses.

The bars trade under a variety of concepts including Embargo República, Lola Lo, Le Fez, Lowlander and Coalition. The Group's Bars division 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 based in key university cities and towns that provide a vibrant night-time economy and the demographics to support premium bars.

Lightwater Valley Attractions Limited, acquired during the period, owns and operates the Lightwater Valley Theme Park, a leading North Yorkshire attraction, which is focused on family days out and is set in 175 acres of landscaped parkland. The Park offers a variety of attractions with rides, amusements, crazy golf, children's outdoor and indoor play, entertainment shows, together with numerous food, drink and retail outlets. The Park also provides popular seasonal events including Halloween (Frightwater Valley) and Christmas (Alice in Winterland).

The strategy of the Group is to capitalise on the skills of the four 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, such as our recent acquisition of Lightwater Valley, thus enhancing the Group's portfolio and realising synergies by leveraging scale. It is the Board's longer-term strategy to position the Company as a consolidator within this sector.

Chief Executive Officer's report

This business review covers the trading results for the 52 weeks ended 27 June 2021 (2020: 52 weeks ended 28 June 2020). Both periods have, since spring 2020, been defined by the COVID-19 pandemic.

This trading period began during the first national lockdown, with nearly all of the Group's businesses closed. In July 2020, the restrictions of the first lockdown were eased such that the Group was able to partially reopen some of its businesses. The key challenge in terms of reopening was to resume usual business activities, having regard on the one hand for the newly imposed government restrictions to provide a safe environment for all staff and customers, whilst on the other hand continuing to entertain visitors in a way that would be as familiar and enjoyable as before the pandemic.

The Group was delighted when Brighton Palace Pier, six of the golf sites and two of the bars reopened on 4 July 2020, with the remaining two golf sites and soft play on the Pier reopening on 24 August 2020. This allowed the Group to trade for most of the summer period when footfall on the Pier is at its peak. This crucial earnings period benefited from the warm summer weather as well as additional support from the UK Government's 'Eat Out to Help Out' scheme, together with a reduction in VAT.

Whilst most of the late-night bars remained closed, trading for two open bars, the Pier and Golf divisions continued until the end of September 2020. Trading for open sites exceeded the Group's expectations at the time of reopening, with like-for-like sales at 81% of those during the same 13 weeks in 2019. Splitting this down by division, the Pier traded at 83%, the Golf division at 87% and the Bars division at 65% compared to the same weeks in the prior year.

This successful summer trading period contributed just under £2 million in EBITDA from the open businesses and was a reminder of the benefits the Group derived from its diversified acquisitions over the previous years.

By the end of September 2020, rising COVID-19 infections resulted in further restrictions, most notably a 10p.m. 'curfew', full table service only and mandatory mask wearing. This was then followed by the introduction of the regional 'Tier' system in October 2020, which resulted in the closure of both Scottish golf sites, together with sites in Manchester, Sheffield and Cheshire Oaks. The 10p.m. terminal hour ensured that the doors of all the Group's late-night bars remained firmly shut, with only Lowlander in the Bars division still able to trade. The second national lockdown was then imposed on 5 November for four weeks, with a brief reopening before Christmas but without the much anticipated relaxation of restrictions during the Christmas period itself.

All three divisions remained closed for the next three months. Focus once again turned to the wellbeing of our staff during the lockdown period. Regular communication was essential and managers would make regular online calls to keep staff informed and react to those needing support. We also published regular newsletters with a wealth of important information on health, support resources, competitions and even activities for employees' children to occupy their time. For those staff not on furlough the focus was on conserving cash and preparing for reopening. Being ready to reopen was now the principal focus of activity.

On 12 April 2021 Coalition, the Group's beachfront bar and restaurant site in Brighton reopened its outside terrace restaurant, 'La Plage'. On the same date the Pier opened its rides and its significant outside space with table service food and drink.

The Golf businesses and Lowlander in Covent Garden then opened on 17 May and the Pier re-opened its arcades, Palm Court restaurant and Horatio's Bar.

Finally, on 19 July 2021 after 16 months of closure, all the Group's late-night bars were able to re-open as almost all inside restrictions were relaxed.

During the closure period the Bars division disposed of three marginal sites: Smash in Wimbledon and PoNaNa in Bath were both assigned to new tenants, and a third lease for Fez in Cambridge expiring in late December 2020 was not renewed.

Acquisition of Lightwater Valley

On 17 June 2021, the Group was pleased to announce its acquisition of the entire share capital of Lightwater Valley Attractions Limited ('Lightwater Valley'). The consideration payable is £3.6 million with a further £1.2 million paid to clear Lightwater Valley's outstanding bank debt on the date of acquisition. The total cash outflow in relation to this transaction is therefore £4.8 million. The acquisition was funded from a £2.0 million extension to the Group's revolving credit facility and existing cash resources. The transaction was expected to be immediately earnings accretive post completion.

The consideration was satisfied by an initial completion payment of £3.8 million in cash (adjusted for working capital and on a debt-free cash-free basis), deferred consideration of £0.5 million and contingent consideration of up to £0.5 million, subject to Lightwater Valley achieving certain trading targets over the summer months. Both the deferred and contingent consideration were settled in full at the end of October 2021.

The Board believes that the extensive space at Lightwater Valley provides a long-term growth opportunity for the Group to develop and expand the park. This acquisition executes the Group's stated strategy to create a growth enterprise, operating across a wide variety of leisure and entertainment assets in the UK.

Business interruption claims

September 2020 brought positive news with the High Court judgment that the Group's 'Marsh resilience' insurance policies in the Bars and Golf divisions could respond to COVID-19 business interruption claims. The Group's policies had a maximum indemnity period of 24 months and were capped at £5.0 million for any one claim, split equally between the Bars and Golf division.

The Supreme Court ruling in January 2021 brought further clarification on a number of areas but did not change the fundamental position that the Group's 'Marsh' resilience' insurance policies were still capable of responding to COVID-19 claims.

During the period, the Group recognised as other income £5.0 million in relation to these claims. As at the period end payments on account of £3.0 million were received. Further claims for losses were submitted for the period to the end of May 2021, which significantly exceeded the caps on the policies. Based on these claims a further £1.1 million was paid in August 2021 and a payment of £0.9 million received in early October 2021. These final payments were in full and final settlement of our Business Interruption claims.

Other significant events that have taken place since the year end

At the end of September 2021, the Bars division surrendered its lease of its Reading Coalition site, the last of the four marginal sites to be disposed of in the Bars division. This disposal resulted in gains of approximately £530,000 arising from the derecognition of lease liabilities and cash outflows of £12,000. There are no reversionary risks or guarantees outstanding on the four disposed leases.

Full-year results for the 52 weeks to 27 June 2021

Profit before tax was significantly up on the prior period at £4.2 million (2020: loss of £(10.2) million), benefitting from the income from business interruption insurance, summer trading (especially at the Pier and Golf sites), government support by way of furlough, grants, rates and VAT reductions, as well as the one-off extinguishment of lease liabilities from the disposal of the three Bars division sites. The associated right of use assets at these sites were fully impaired during the prior period.

Profit after tax was £4.3 million (2020: loss of £(9.5) million).

Revenue for the period was down at £13.5 million (2020: £22.6 million). This reflects the closure of most of the bars and the COVID-19 restrictions being much more widely spread across the period. The prior period also enjoyed the benefit of the full first half pre-COVID-19 trading.

Revenue split by division:

·              Pier division                           £9.7 million               (2020: £9.5 million)

·              Golf division                          £2.4 million               (2020: £4.3 million)

·              Bars division                          £1.3 million               (2020: £8.9 million)

·              Lightwater Valley*                £0.2 million                              (2020: Nil)

                * This represents only 10 days of ownership during the period.

Group gross margin for the period increased by 2% to 87 % (2020: 85%).

Group EBITDA (see Note 2 and 7) for the period was £4.7 million (2019: £2.5 million). This includes £5.0 million of business interruption insurance income, £0.7 million of COVID-related local authority grant income and £2.2 million of furlough income which has offset staff costs (see Note 5).

EBITDA split by division:

·              Pier division                          £1.0 million               (2020: £0.2 million)

·              Golf division                         £3.1 million               (2020: £1.9 million)

·              Bars division                         £1.8 million               (2020: £1.1 million)

·              Lightwater Valley                 £0.1 million                             (2020: £nil)

·              Group overhead                   £(0.9) million            (2020: £(0.8) million)

Group EBITDA excluding highlighted items (see Note 7) for the period was £5.1 million (2019: £2.5 million). This also includes the business interruption insurance income and COVID-related local authority grant income described above.

Divisional trading commentary

Pier division

·              Revenue - up 2% on the prior period at £9.7 million (2020: £9.5 million); this represents principally the success of the 13 weeks from July to September 2020 summer trading.

·              Like-for-like sales  - for the 13 weeks to the end of September 2020 at 81% of the same period last year.

·              Gross margin - up 2% at 86% (2020: 84%) margin and spend per head were both up, benefiting from the reduction in VAT and the 'Eat Out to Help Out' scheme which went some way to mitigate the impact of COVID-19 (see Note 5).

·              The Pier was fully open for only 19 weeks in the first half and 6 weeks in the second half of the period from mid- May to the end of June 2021.

Golf division 

·              Revenue - down 44% from the prior period at £2.4 million (2020: £4.3 million). Sales were bolstered by the new site at Plymouth Drake's Circus, which opened at the end of October 2019 in the prior period.

·              Gross margin - in line with last year at 99% (2020: 99%) this will fall going forward as we further diversify into other retail offers such as the bar and food offerings in Plymouth.

·              Like-for-likes sales - for open sites for the 13-week period to the end of the summer at 87% of the same period last year.

·              The reduction in revenue was caused by different opening rules in Scotland, together with 'Tier' rules in the Midlands and Northwest, which resulted in many of the Golf sites being closed for extended periods (in total the Golf division was only fully open for five weeks in the first half and six weeks in the second half).

·              EBITDA - includes £2.5 million of business interruption insurance income recognised during the period (2020: £nil).

Bars division 

·              Revenue - down 86% on the prior period at £1.3 million (2020: £8.9 million); with nearly all the Bars estate closed throughout the period, these sales came from the two food-led operations - Lowlander in Covent Garden and Coalition on the beach front in Brighton.

·              Lowlander - this central London venue has been impacted by the closure of theatres and non-essential retail, together with the loss of foreign tourists and many office staff working from home. However, launch of a take-away offer and a new 'Supper Club' were well received, especially appealing to its regular clientele, missing the unique offer the venue provides.

·              La Plage - July 2020 saw the launch of the new 'La Plage' restaurant on the beach terrace of Coalition in Brighton, which proved to be a great success through the 2020 summer period.

·              Gross margin - down 9% at 72% (2020: 81%) absence of the wet led late-night bars during the period resulted in a lower margin reflecting the food led operations that were open in this period.

·              EBITDA - includes £2.5 million of business interruption insurance income recognised during the period (2020: £nil).

Lightwater Valley

·              Revenue - £0.2 million which represents only 10 days of ownership.

Highlighted items consists of net gains of £2.7 million (2019: £8.1 million of costs) which were recognised during the period. This amount includes £3.2 million of gains arising from the derecognition of lease liabilities as a result of site disposals in the Bars division (PoNaNa in Bath, Fez in Cambridge and Smash in Wimbledon) and renegotiated lease terms with the Group's landlords. The disposal of these marginal sites will, in the long run, reduce overhead costs and improve the profitability of the Bars division. These gains are offset by £0.3 million of acquisition costs and £0.2 million of restructuring and legal costs. Prior year costs related to impairments of goodwill, right-of-use-assets and property, plant and equipment. (see Note 4 for further details).

Finance costs of £0.9 million (2020: £1.1 million) were incurred in the 52-week period, made up of:

·              Interest on borrowings           £0.3 million               (2020: £0.4 million)

·              Interest on leases                    £0.6 million               (2020: £0.7 million)

The interest on leases relates predominantly to property leases in the Bars and Golf divisions and arises from the application of IFRS 16 .

Operating profit was £5.1 million (2020: loss of £(9.2) million); this reflects the large impairment write-downs in the prior period and the benefits in the current period from the extinguishment of lease liabilities from the disposals in the Bars division (see Note 4 for further details). Operating profit also includes £5.0 million of insurance income and receipt of government grants, as outlined above and in Note 5.

Taxation on ordinary activities tax credit of £0.1 million (2020: tax credit £0.7 million); the Group has utilised losses from the prior year to offset all its taxable profits for the current period.

In summary, for the 52-week period ended 27 June 2021 (compared to the equivalent 52-week period ended 28 June 2020):

·             Revenue for the period                                                          £13.5 million              (2020: £22.6 million)

·             Profit/(loss) before tax                                                          £4.2 million                (2020: £(10.2) million)

·             Profit/(loss) after tax                                                             £4.3 million                (2020: £(9.5) million)

·             Basic and diluted earnings/(loss) per share                          11.5 pence                   (2020: (25.5) pence)

·             Group EBITDA excluding highlighted items                       £5.1 million                (2020: £2.5 million)

·             Group EBITDA including highlighted items                       £4.7 million                 (2020: £2.5 million)

·             Adjusted earnings/(loss) per share (basic and diluted)         5.7 pence                     (2020: (5.3) pence)

(see Note 6)

Financial review

Cash flow and balance sheet for the 52 weeks to 27 June 2021

Cash flow generated from operations (after interest and tax payments) available for investment was £4.9 million (2020: £0.6 million). This increase was principally driven by the £5.0 million insurance income booked during the period.

Deferred and contingent consideration

The Group has recognised £1.0 million of additional consideration payable in relation to its acquisition of Lightwater Valley. This includes £0.5 million of contingent consideration, payable if the park achieves certain trading targets by the end of September 2021. As at the period end, it was management's best estimate that these targets would be met and that the full amount would become payable. A further non-contingent payment of £0.5 million is also payable. Both deferred and contingent considerations were paid in full at the end of October 2021.

Property, plant and equipment

The Group invested £0.3 million in capital expenditure during the period (2020: £1.6 million). This spend relates to minor capital projects across all the divisions.

Shareholders will be aware that each year we undertake an annual substructure survey on the Pier. We can report that no additional maintenance issues were identified other than the usual budgeted maintenance requirements for the coming financial year.

Bank debt and cash

At the period end the Group had total bank debt of £20.4 million (2020: £16.8 million), and net debt (total bank debt less cash and cash equivalents) of £13.1 million (2020: £14.2 million) broken down as follows:

·      an outstanding principal term facility of £11.8 million (2020: £11.8 million)

- £0.1 million debt repayment was made in the period (2020: 1.5 million), offset by the amortisation of loan fees

- £0.4 million is due within the next twelve months to the end of June 2022 (2020: nil)

- Two payments totalling £0.5 million thereafter to the end of the term in December 2022

·      CBILS 1 facility of £1.8 million (2020: £1.8 million)

- Quarterly repayments of £0.45 million resuming in September 2021

- A total repayment of £1.8 million (2020: nil) is payable within the next twelve months

·      CBILS 2 facility of £3.2 million (2020: 3.2 million)

- Quarterly repayments of £0.46 million resuming in September 2021

- A total repayment of £1.8 million (2020: nil) is payable within the next twelve months

- The balance of £1.4 million to be repaid by the end of March 2023

·      The RCF facility was increased by £2.0 million to £3.75 million to fund the Lightwater Valley acquisition

- This facility then fell to £1.75 million at the end of October 2021

- As at the period end £3.6 million was drawn under this facility (2020: £1.75 million facility undrawn) which was fully repaid by the end of October 2021

·      Cash balances of £7.3 million (2020: £2.6 million)

During the 52-week period, the Group made net drawdowns of £3.5 million (2020: net repayments of 2.0 million), made up of :

·      £3.6 million drawdown on the RCF (2020 : £nil);

·      no repayments to the RCF (2020: £1.5 million);

·      £0.1 million of repayment to the principal term facility (2020: £1.5 million), and

·      no new funding from the CBILS 1 and 2 facilities (2020 : £5.0 million).

In addition, on 17 June 2021, the Group assumed £1.2 million of bank debt owed by Lightwater Valley. This was fully repaid by the Group immediately after the acquisition as required by the share purchase agreement.

Key performance indicators ('KPI's)

The loss of revenue from COVID-19 closures and trading restrictions has impacted all divisions. Most of the Bars division has been closed throughout the 52-week period. The Pier has only been fully open for 25 weeks and the Golf division due to 'Tier' rules in the Midlands and Northwest, has only been open fully for 11 weeks. This loss of trading has had a major impact on the Group's performance against its KPIs.

The Group's KPIs remain focused on the continued growth of the Group to drive revenues, EBITDA and earnings growth. Despite the prolonged closures, bolstered by £5.0 million of business interruption insurance and the opportunity to trade the Pier and Golf divisions over the key summer trading period, the business has remained cash generative.

·             Revenue for the period                                                            £13.5 million              (2020: £22.6 million)

·             Profit/(loss) before tax                                                            £4.2 million                 (2020: £(10.2) million)

·             Group EBITDA excluding highlighted items                         £5.1 million                 (2020: £2.5 million)

·             Group EBITDA including highlighted items                         £4.7 million                  (2020: £2.5 million)

Once reopened, the Group benefitted from the investments made in the two new golf site openings at Rushden Lakes in March 2019 and Plymouth Drake's Circus in October 2019, as well as the refurbished Putney 'Le Fez' in the Bars division which opened in November 2018. The Pier will also continue to benefit from the redevelopment of the Palm Court Restaurant and Horatio's Bar, boosting conference and events bookings.

A significant highlight for the year has been the acquisition of Lightwater Valley. The Board believes that the extensive space at Lightwater Valley provides a long-term growth opportunity for the Group to develop and expand the park. This acquisition executes on the Company's stated strategy to create a growth group, operating across a wide variety of leisure and entertainment assets in the UK.

Strategy of the combined Group, current trading and outlook for the coming period

Short to medium-term strategy and outlook

In the short to medium-term, our key aim has been to reopen our businesses as soon as circumstances allowed, and to focus on returning them to their trading levels pre-closure.

The first 13 weeks of the new financial year demonstrate a strong start. Due to the warmer weather, school vacations and the August bank holiday weekend, the summer period has historically contributed a significant proportion of the Group's annual sales and earnings. This year's key trading period has been boosted by pent-up demand and disposable incomes that have built up during lockdown, significant increases in domestic holidays, a temporarily reduced rate of VAT and rates relief by way of Government support and the addition of the newly acquired Lightwater Valley theme park. Collectively, these factors have provided a unique opportunity for the business to maximise revenue and earnings and to complete the integration of Lightwater Valley into the Group.

With many of the indoor and outdoor restrictions lifted, Brighton Palace Pier, the Group's mini golf sites and its food-led bars were able to re-open from 17 May 2021. Furthermore, the Group's acquisition of Lightwater Valley theme park completed on 17 June 2021, followed by the reopening of the Group's remaining late-night bars on 19 July 2021 for the first time in 16 months.

With all four divisions mostly opened throughout, the Group is pleased to report total net sales for the 13-week period to the end of September 2021 of £15.9 million. This is 145% over the same period in 2020, and 44% ahead of the same (pre-Covid) period in 2019 (or 30% ahead of 2019 if benefit from the temporary VAT concession is excluded).

Like-for-like sales at the Pier for the 13-week period to the end of September 2021 were up 47% on 2020 and up 14% on 2019; across the Golf sites they were up 119% on 2020 and 30% on 2019; and, in respect of the Bars (fully reopened from the last week in July for just ten weeks of the period) its sales were up 36% on 2019, with most venues closed in 2020. Combined with trading from the newly acquired Lightwater Valley business, these results significantly exceeded the Group's expectations at the beginning of the year, as announced in the Group's trading update on 8 October 2021.

As a result of the strong summer trading performance, benefits from VAT and rates relief and the impact of the acquisition of Lightwater Valley, the Board expects this financial year to be an exceptional opportunity for the Group. Looking forward to FY 2023 we expect to see trading returning to more normalised levels with VAT and other government support withdrawn.

Longer-term: new acquisitions and developments

The longer-term strategy of the enlarged Group continues to be 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 (many of which have been significantly impacted by the pandemic) that could enhance the Group's portfolio, realising synergies by leveraging scale. It is the Board's longer-term strategy to position the Group as a consolidator within this sector.

Consolidated statement of comprehensive income

For the 52-week period ended 27 June 2021

* 2021 basic weighted average number of shares in issue is 37.29 million (2020: 37.29 million).

No other comprehensive income was earned during the period (2020: £nil).

Consolidated balance sheet

As at 27 June 2021

These consolidated financial statements have been approved by the Board of Directors and signed on its behalf by: J.A.Smith, Director

1 November 2021                                                               Registered Company number: 08687172

Consolidated statement of cash flows

For the period ended 27 June 2021

Consolidated statement of changes in equity

For the period ended 27 June 2021

Notes to the consolidated financial statements

For the period ended 27 June 2021

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. As at 27 June 2021, the Group also operated 8 premium bars (2020:12) and 8 (2020:8) indoor adventure golf facilities trading in major towns and cities across the UK.

Announcement

This announcement was approved by the Board of Directors on 1 November 2021. The preliminary results for the period ended 27 June 2021 are based on the audited financial statements for the same period. The financial information for the period ended 27 June 2021 and the period ended 28 June 2020 does not constitute the company's statutory accounts for those periods. The auditors' reports on the accounts for 27 June 2021 and 28 June 2020 were unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

Basis of preparation

The Group financial statements have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006. The UK's departure from the European Union at 11pm on 31 December 2020 requires the Group to apply frozen IFRS standards as at the balance sheet date, in accordance with The International Accounting Standards and European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2019. The accounting policies which follow set out those policies which apply in preparing the financial statements for the period ended 27 June 2021. 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 (2021: 52-week period ended 27 June 2021; 2020: 52-week period ended 28 June 2020).  The notes to the consolidated financial statements are on this basis.

Going concern

All divisions of the Group were able to fully reopen during summer 2021. The Pier division opened for trade on 12 April 2021, with much of the Golf division reopening on 17 May 2021. Lockdown restrictions were fully lifted on 19 July 2021, allowing all sites in the Bars division to reopen. As discussed in the Strategic report, the Group enjoyed strong trading during the summer months across all divisions, including at the newly acquired Lightwater Valley theme park. In addition, the Group received its final payment of £2.0 million from its insurers in relation to its business interruption claims in the Bars and Golf divisions, bringing the total to the policies cap of £5.0 million.

As at the September 2021 period end, the Group held cash and cash equivalents of £12.9 million. The Directors believe that forecast trading, along with existing cash reserves, will continue to fund the Group's cash requirements through FY2022 and FY2023.

The Directors and management of the business have reviewed the Group's detailed forecast cash flows for the forthcoming twelve months from the date of the approval of the financial statements and consider that the Group will have sufficient cash resources available to meet its liabilities as they fall due. These cash flow forecasts and re-forecasts are prepared regularly as part of the business planning process. These have been subjected to scenario modelling and sensitivity analysis which the Directors consider to be sufficiently robust.

As part of this assessment, the Directors modelled a scenario in which infection rates increase over the early winter period into Christmas, resulting in a three-month lockdown for the period from January 2022 to March 2022.

This scenario assumes that:

-               all the Bars division sites are closed from January 2022 to March 2022;

-               all the Golf division sites are closed from January 2022 to March 2022;

-               Lightwater Valley is closed as normal from January 2020 to March 2022;

-               the Pier continues to trade during this traditionally quite period but with a return of social distancing measures;

-               the Group receives no government assistance by way of furlough, further rates relief or grants;

-               the Group is unable to mitigate costs other than direct operating costs and hourly paid staff, and

-              the Group makes repayments of £7.6 million in FY 2022 to the revolving credit facility and term loans.

In this scenario, EBITDA (being a proxy for cash generated) would fall by £2.4 million, however the total cash available to the Group (being cash at bank and amounts available to draw down from its revolving credit facility) does not fall below £4.2 million. The Group also continues to comply with all banking covenants throughout the modelled period and continues to make all its scheduled repayments of bank debt. Furthermore, based on the Group's experience from previous lockdowns, the business is confident it would be able to significantly mitigate the financial impact of the lockdowns modelled in the above scenario, by further reducing operating costs, halting all capital spending projects and taking advantage of further government support, if available.

The Directors and management believe that the likelihood of any such further lockdowns occurring is remote. The success of the double vaccination programme, and the planned roll out of booster vaccinations for the over fifties should continue to protect the UK through the winter months. Furthermore, the government have made it clear that it currently has no wish to reintroduce a lock down strategy.

The Directors therefore expect the Group to continue to meet its day-to-day working capital requirements from the cash flows generated by its trading activities, loan facilities with its bank as well as cash resources available to it throughout the four divisions, should this be required. Accordingly, these financial statements have been prepared on a going concern basis.

The Group's principle five year term loan, together with its revolving credit facility are due for renewal in December 2022. The Group's current intention is to renew the £11 million debt outstanding with a further five year facility, with annual repayments expected to be similar to the original term loan of circa £1.5 million per annum. In addition, the Group aims to agree a further RCF facility of circa £2 million to provide supporting working capital funding for future investments.

The first of the Group's Coronavirus Business Interruption Loans (£1.8 million loan)  is scheduled to be fully repaid by the end of June 2022. The second CBIL (£3.2 million) is scheduled to be fully repaid by the end of March 2023. The £3.6 million drawn on its revolving credit facility to fund the acquisition of Lightwater Valley was fully repaid in October 2021.

Based on trading through the busy summer period, including from the newly acquired Lightwater Valley, the £5 million proceeds from business interruption insurance, the Group has £12.9 million of cash and cash equivalents available to it at the end of September 2021. The Group is confident that it will continue to be able to  pay back its scheduled repayments as they fall due.

Management believes that when the renewal of the Group's term loan and revolving credit facility arises in December 2022, the Group will continue to be an attractive proposition for most lenders, given the relatively low leverage of the Group, its strong earnings potential and the asset backed security that can be provided from the freehold value inherent in the Pier and long-term nature of the Lightwater Valley Lease (lease ends in January 2097).