30 September 2024

The Brighton Pier Group PLC

(the "Company" or the "Group")

Unaudited interim results for the 6 month period ended 23 June 2024

The Brighton Pier Group PLC today announces its unaudited results for the 6 month period ended 23 June 2024. On a like-for-like basis (excluding the impact of the three closed or disposed sites in the Bars division) total revenues for the Group were £13.9 million (2023: £14.9 million). As previously reported by the Group, the majority of this £1.0 million year-on-year shortfall arose from the Pier, where adverse weather conditions led to lower footfall throughout the period. The remaining three divisions traded broadly in line with  expectations.

Financial highlights

•        Total like-for-like revenue in the period was £13.9 million (2023: £14.9 million).

•        Total revenue in the period was £13.9 million (2023: £16.2 million).

•        Group EBITDA* was £0.4 million (2023: £1.4 million).

•        Group gross margin held at 86% (2023: 86%).

•        Profit/(loss) before tax was £0.2 million (2023: £(3.9) million)

•        Basic earnings/(losses) per share were 0.4p (2023: (9.6)p).

•        Net cash flow from operations was £1.1 million (2023: £3.2 million).

•        Net debt was £7.6 million (24 December 2023: £7.4 million).

* EBITDA is detailed in Note 7 to the financial statements.

Principal developments

•        Brighton Palace Pier sales of £6.4 million were down £1.1 million versus last year (2023: £7.5 million), due to wet and windy weather throughout the first half of the year that forced rolling closures of higher-margin rides, and a general downturn in domestic tourism in Brighton, leading to significantly fewer visitors onto the pier.

•        The Bars division continues to operate in a challenging trading environment but has in large part successfully mitigated the severity of the trading challenges through the closure and disposal of three loss-making sites in early 2024. As a result, on a like-for-like basis total sales of £2.6 million (2023: £2.8 million) were down only £0.2 million versus 2023.

•        The Golf division delivered a consistent trading performance, with total sales of £3.2 million in line with the previous year (2023: £3.2 million).

•        Lightwater Valley saw a 26% increase in visitor numbers during the period, which was driven primarily by successful marketing campaigns that targeted key dates. Sales of £1.7 million were 16% ahead of last year (2023: £1.4 million), with lower average admissions prices through targeted promotional offers partially offsetting the impact of the resulting larger number of visitors.

Outlook

•        As reported in the 26 July 2024 trading update, adverse weather conditions in the early months of the year resulted in sales and earnings at the pier being lower than previously expected.

•        Trading in the busier summer months was more encouraging, with like-for-like sales of £11.5 million for the Group in the 12-week period ending 15 September 2024, only £0.2 million or 2% behind the equivalent weeks in 2023 (2023: £11.7 million).

•        Total sales at the pier for this period were £6.3 million (2023: £6.0 million), boosted by the successful introduction of the £1 admission fee for non-residents.

•        Despite the performance of the summer trading period, the pier-led sales and earnings deficit to original expectations from the earlier months of the year has not been recovered, and the Board's current expectation is that this shortfall will persist through the remainder of the current financial year.

•        As a consequence, the Group's outlook remains one of caution in the short-to-medium term. The Board believes that if trading continues in line with the last few months, full year sales and earnings will be lower than previously expected for 2024.

Anne Ackord, Chief Executive Officer, said:

"As previously reported, the Group experienced disappointing trading conditions during the first half of the year.

While a warmer weather spell during August and the successful implementation of a £1 admission charge on the pier for non-residents offered some respite, the overall demand across the estate has remained subdued as consumers continue to closely manage discretionary spend.

Looking forward, the Group is focusing on disciplined cost management, which will put us in the strongest possible position to capitalise once economic conditions have improved. We are also actively looking into  longer term options that will reduce the Pier's reliance on good weather."

All Company announcements and news are available at www.brightonpiergroup.com

Enquiries:

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 nineteen funfair rides, together with a variety of on-site hospitality and catering facilities.

·      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 5 sites under a variety of concepts comprising Embargo República, Lola Lo, Le Fez, and Lowlander. The Group's bars target a customer base of students' midweek and over-21s 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.

Operational review

The period opened with the closure of three sites in the Bars division - Manchester, Cambridge and Brighton. As of the date of this report, the disposal of Cambridge and Brighton have been completed, resulting in £2.2 million of non-cash gains relating to the derecognition of the associated lease liabilities. The disposal of Manchester, which will result in further non-cash gains of circa £2.4 million, is expected to conclude before the end of the year. These non-cash gains have been recognised as highlighted items in the Consolidated Statement of Comprehensive Income.

From the May 2024 bank holiday weekend, the pier introduced a £1 admissions charge (with an exemption for Brighton residents living in the BN postcode area). The charge was initially applied at weekends only through the month of June, then daily from July onwards. A press campaign communicating the Group's rationale for the introduction of the charge was launched in the weeks leading up to the May bank holiday weekend, the reception from which was highly positive. As of 15 September 2024, the total net revenue generated from charging for admissions was £0.6 million, with the average percentage of visitors paying since its introduction at 61%.

Revenue from conferences and events continue to be a growth area on the pier and divisional management are seeking ways to further enhance the offering for guests.

At Lightwater Valley, guests to the park were able to enjoy a variety of new rides and attractions for the 2024 season, including a new Jeep Safari ride, a revamped indoor soft play area, a Rocket rollercoaster and a variety of one-off special event weekends featuring popular children's mascots.

Financial review and KPIs

Total Group revenue for the period was £13.9 million (2023: £16.2 million).

Revenue split by division:

•        Pier division                                                                                                   £6.4 million      (2023: £7.5 million)

•        Golf division                                                                                                   £3.2 million      (2023: £3.2 million)

•        Bars division                                                                                                  £2.6 million     (2023: £4.1 million)

•        Lightwater Valley                                                                                          £1.7 million     (2023: £1.4 million)

Total Group EBITDA for the period was £0.4 million (2023: £1.4 million).

EBITDA split by division:

•        Pier division                                                                                                £(0.4) million      (2023: £0.5 million)

•        Golf division                                                                                                   £1.3 million      (2023: £1.4 million)

•        Bars division                                                                                                  £0.4 million      (2023: £0.4 million)

•        Lightwater Valley                                                                                       £(0.2) million   (2023: £(0.3) million)

•        Group overhead                                                                                        £(0.7) million   (2023: £(0.6) million)

Group gross margin was held at 86% (2023: 86%).

Highlighted items totalling £1.9 million of net gains/(charges) (2023: £(3.0) million) were recognised during the period. These reflect:

•        £2.2 million - derecognition of lease liabilities held for sale, upon disposal of the Cambridge and Brighton sites in the Bars division; and

•        £(0.3) million - site closure costs in relation to Cambridge, Brighton and Manchester in the Bars division.

Group profit/(loss) on ordinary activities before tax was £0.2 million (2023: £(3.9) million).

Group profit/(loss) on ordinary activities after tax was £0.2 million (2023: £(3.6) million).

In summary, for the 6 month period ended 23 June 2024:

•        Revenue                                                                                                      £13.9 million         (2023: £16.2 million)

•        Operating profit/(loss)                                                                                 £0.9 million         (2023: £(3.2) million)

•        Group EBITDA                                                                                                £0.4 million         (2023: £1.4 million)

•        Operating loss excluding highlighted items*                                        £(1.0) million         (2023: £(0.3) million)

•        Operating profit/(loss)                                                                                 £0.9 million         (2023: £(3.2) million)

•        Loss before tax excluding highlighted items*                                      £(1.7) million         (2023: £(1.0) million)

•        Profit/(loss) before tax                                                                                £0.2 million         (2023: £(3.9) million)

•        Profit/(loss) after tax for the period                                                         £0.2 million          (2023: £(3.6) million)

•        Net debt at the end of the period                                                             £7.6 million         (24 Dec 2023: £7.4 million)

•        Basic losses per share excluding highlighted items*                                       (4.4)p         (2023: (1.7)p)

•        Basic earnings/(losses) per share                                                                           0.4p         (2023: (9.6)p)

•        Diluted losses per share excluding highlighted items*                                   (4.4)p         (2023: (1.7)p)

•        Diluted earnings/(losses) per share                                                                      0.4p         (2023: (9.6)p)

* 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 £1.1 million (2023: £3.2 million), after interest and tax payments.

Capital expenditure in the period totalled £0.6 million (2023: £0.4 million) across the Group.

Total bank debt at the end of the period was £11.4 million (24 December 2023: £11.4 million), split between a term loan of £6.9 million (24 December 2023: £6.9 million) and drawdowns on a £5.0 million revolving credit facility of £4.5 million (24 December 2023: £4.5 million).

At the period end, cash and cash equivalents were £3.8 million (24 December 2023: £4.0 million).

Consequently, net debt at the period end stood at £7.6 million (24 December 2023: £7.4 million). The Directors continue to take a cautious approach to net debt levels for the Group.

The Group currently has additional headroom on its revolving credit facility of £0.5 million, giving total cash availability to the Group of £4.3 million as at the period end.

Details of the Group's banking covenants can be found on page 90 of the December 2023 Annual Report.

Trading for the 12 weeks to the 15 September 2024

Total sales for the 12-week period to 15 September 2024 were £11.5 million, down £0.8 million versus the previous year (2023: £12.3 million). On a like-for-like basis, total sales were down £0.2 million or 2% versus 2023 (2023: £11.7 million). A warmer spell during August benefited trading at the pier and Lightwater Valley with the opposite effect for the Bars and Golf divisions. However, the majority of this period was characterised by a continuation of the inclement weather seen throughout the earlier months of the year, leading to softer overall trading for the Group.

Sales at the pier were boosted by the introduction of the £1 admission fee for non-residents, which generated total net sales for the 12-week period of £0.4 million. Total sales for the pier were £6.3 million, up £0.3 million versus 2023 (2023: £6.0 million).

Lightwater Valley traded broadly in line with 2023, where a stronger performance during key weeks in August was not sufficient to offset shortfalls during key weeks in July and September. Total sales were £2.6 million, down £0.1 million versus 2023 (2023: £2.7 million).

In the Golf division, total sales of £1.5 million were £0.2 million lower than the previous year (2023: £1.7 million), with fewer visitors across the estate particularly during August.

The wider issues in the late-night sector remain problematic for the Bars division. While total sales of £1.1 million were down £0.2 million versus last year on a like-for-like basis (2023: £1.3 million), the disposal of three loss-making sites in early 2024 improved overall profitability for the division.

Outlook and strategy

The Group continues to navigate a challenging trading environment. Payroll increases resulting from the uplift in National Minimum Wage, high energy and other input costs, unreliable summer weather and weakness in discretionary spending have collectively put significant pressure on all the Group's sites. In response, the Group has and is continuing to focus on reducing the operational cost base.

Consumer confidence may be further affected by uncertainty over upcoming UK taxation changes, which are due to be announced on 30 October 2024. While the Group is yet unable to accurately assess the impact of any potential changes, the outcome of these has the potential to impact both the Group and its customers in the coming year.

As ever, poor weather in the key summer months continues to have a disproportionate impact on the overall annual trading performance of the Group and is a key contributor to the disappointing results presented in this report. However, there is no guarantee of a reversion to more prolonged spells of warmer, dryer weather and as a consequence, the Group remains cautious in the short to medium term.

The implementation of the £1 admission charge at the end of May 2024 has the potential to generate significant benefits for the pier going forwards. The Group now has a database of local residents that applied for a Resident's Card (granting them continued free entry onto the pier throughout the year) that provides the opportunity for more targeted year-round marketing and special events. The Group intends to continue to charge for admission over the rest of this year and into 2025. Since this charge was only introduced from May 2024, and was only applied daily from July 2024, this should lead to like-for-like revenue upside in 2025.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the 6 month period ended 23 June 2024

INTERIM CONDENSED CONSOLIDATED BALANCE SHEET