The company that owns the Palace Pier recorded a pre-tax loss of £1 million for the first half of the year, compared with a £700,000 profit for the same period last year.
Total revenue fell from £17.3 million to £16.2 million, according to the Brighton Pier Group’s half-year results to Sunday 25 June.
The company blamed wet weather and train strikes as it announced its unaudited interim results for the first six months of the year to the London Stock Exchange this morning.
Since the end of June, the fire at the Royal Albion Hotel, opposite the Palace Pier, has further dented revenues, partly because of the closure of the seafront road, the company said.
But the September sunshine brought a three-week boost this month for a business that booms when the weather is better.
The Brighton Pier Group said that the second quarter – April, May and June – had been “challenging”.
The company said: “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.”
Chief executive Anne Ackord 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 (Sunday) 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 per cent 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.”
The company’s stock exchange announcement said that net debt had fallen to £4.7 million from £7.1 million on Sunday 25 December 2022.
And group EBITDA (earnings before interest, taxes, depreciation and amortisation) was £1.4 million, down from £3 million.
The Palace Pier’s sales performance was up 2 per cent, compared with the same period a year ago, but EBITDA was down £200,000 to £500,000.
In a section of the announcement headed “Outlook”, the company said: “As reported in the Tuesday 25 July 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 (Sunday) 17 September, resulting in total sales of £12.3 million, down £300,000 versus the previous year (2022: £12.6 million).
“While the board has been encouraged to see improved trading in the first three 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.”
Loath what has become to that pier. Once a beautiful pier with Iron arches all along it leading you to that beautiful theatre and now all that just stands there is an old dilapidated fun fair with rides that have been there for decades. Horribly plastic gladding on all of the buildings for low maintenance. It has become nothing more than a cash cow for making the owners lots of money without out much put back into it. A chavs heaven
At over £6 a pint for not very good selection of draught beer – what type of idiot is going to buy drinks in there when they can get them in several nearby spoons at half that price or even get some in tesco or the co op and sit on the beach
Footfall down as a result of the Greens reducing parking spaces and charging huge fees and deliberately causing congestion. Wait till VG3! Word gets around – Brighton doesn’t welcome visitors!
Absolutely right!
Wet weather and train strikes. And overpriced tat, but the CFO is hardly going to cite that as a cause.
In the scheme of things very few visitors to the city arrive by car so the number of parking spaces and charges are simply not an issue.
Most visitors arrive and depart via train.