The Royal Albion Hotel fire was the most significant cause of lower revenues for the company that owns the Palace Pier, according to a trading update yesterday (Tuesday 25 July).
The Brighton Pier Group PLC also blamed train strikes and storms as the company said that revenues were about 7 per cent lower than for the same period last year.
As a result, the share price fell by more than a quarter yesterday – or 14⅟₂p – from 57p to 42⅟₂p, reducing the company’s value from £21.2 million to £15.8 million.
This was about half the value of the leisure and entertainment company a year ago when the share price was more than 80p.
The trading statement said: “On (Monday) 24 April 2023, the group announced its final results for the 18-month period ended December 2022.
“That announcement included an update on the group’s trading over the first quarter of this year which, although behind the equivalent exceptional period in 2022, was in line with market expectations.
“However, the second quarter has proved more difficult. Sales remain behind 2022, with the current macroeconomic environment leading to a widespread decline in disposable incomes and consumer confidence.
“Total sales for the six months ending (Sunday) 25 June 2023 are expected to be in the region of £16.2 million.
“Ongoing inflationary pressures, meanwhile, in particular, in relation to food and beverage and staff costs, have adversely affected the group’s operating margins in the current reporting period.
“The combined effect of these lower sales with the inflationary cost pressures are expected to result in earnings after tax below market expectations.”
According to The Times today: “Peter Renton, an analyst at house broker Cenkos, cut his estimate for full-year underlying earnings by £1 million to £5.5 million.”
The trading statement said: “The board notes that the group is currently in the middle of its busiest period in July and August.
“However, July 2023 trading has been impacted by unseasonably poor weather, train strikes and most significantly the impact of the fire at a major hotel opposite the entrance to the pier which resulted in some disruption for about a week.
“We are pleased to confirm that access to the pier is now back to normal.
“The summer months represent a significant opportunity for the group, with these two months historically contributing approximately 30 per cent of annual group sales, which in turn equate to a significant proportion of the earnings of the group for the year.
“The management team continue to mitigate the economic pressures faced wherever possible and all four of the group’s divisions will remain profitable for the full year despite the challenges.
“The board’s short to medium-term outlook remains cautious.”
As well as the pier, the PLC (public limited company) also owns bars, indoor mini-golf attractions and the Lightwater Valley theme park, in Yorkshire.
Chief executive Anne Ackord said: “The group is navigating a challenging trading environment, with persistent high inflation and reduced footfall continuing to affect disposable incomes across many of the group’s trading sites.
“When combined with the ongoing cost pressures we face, it has led to lower than expected sales and earnings in the first half of 2023.
“While we still have many of the key summer weeks to come, recent trading in July has been impacted by a number of events outside of our control namely weekend train strikes, stormy weather and the hotel fire across the road from the pier which has disrupted sales.
“We will still attempt to capitalise on the forthcoming school holiday period of August, traditionally the busiest and most profitable period in our year.
“With current economic trends set to continue in the short to medium term, the outlook must continue to be one of caution.”
I walked past at 4.30pm on 26/07/2023 all work had already stopped and all was on site is security. The height of the tourist season is here already struggling with bad weather( nothing to do with global warming its normal) but for some reason the council is quite happy to keep both sides of the main road closed. Surely a day or so of around the clock working would get the road opened. BUT NO SOMEONE JUST WANTS TO RUIN LOCAL BUSINESS .
The weather being grim is highly likely global warming. Safe demolition takes time. Stop moaning.
But you can still work 24/7 safely, meanwhile the council doesn’t worry about the pollution of everyone sitting in jams.
What tosh!
Closing that small segment of road is not going to stop people going on the Palace Pier!
Maybe they’re making excuses for paying bills and taxes the rest of us mere mortals have no choice in paying!
Totally agree
Palace pier, should appreciate that they are only pier in Brighton.
My mother used to enjoy west pier, which was better pier especially in 30’s & 40’s.
Like the Albion had a suspect fire, I was living behind Queens hotel in 1998, thought it was dodgy then, 25 years later it happens again.
Although the headline (“ Traders wipe £5m off Palace Pier business after Royal Albion Hotel fire”) is technically correct – traders did wipe £5m off the public value, and that did happen sequentially after the fire – to link the two is incorrect and disingenuous.
The story here is inflation: not only for the business, but more importantly for the public that visit. With a cost of living crisis we have less discretionary savings to spend and entertainment businesses will be the first to feel the pinch. It’s hardly surprising that their first half year results are poorer than expected.
Don’t forget the green council approach of discouraging tourists that drive, in the face of cancelled and disrupted trains. IF labor want to restore this they need to be more commercial, and dare I say even brave by cutting parking costs, reinstating parking spaces and advertising Brighton as a destination..
Or, hear me out here, have a cohesive and decent public transport system, local, country, and regional, as well as safe pedestrian, cycle, and wheelchair- and other mobility-accessible routes, so that people don’t need to get stuck in traffic and pay exorbitant parking charges to visit the pier?