The owner of the Palace Pier has blamed the poor train service from London to Brighton for a drop in profits in the current financial year.
The Brighton Pier Group, which owns leisure attractions around the country, said that it expected an 18 per cent shortfall in forecast profits in the 12 months to the end of June.
This could equal up to half a million pounds, given that the company made a pre-tax profit of £2.3 million last year on revenues of £31.7 million. This was up from £1.9 million profit a year earlier on revenues of £31.3 million.
The value of the company dropped by almost half, with the share price plummeting to 35p when the stock market opened. The shares closed yesterday at 63p, the lowest for a year. A year ago each share was worth more than £1.
The company, run by entrepreneur Luke Johnson, shared the news in a formal announcement to the London Stock Exchange this morning (Thursday 10 January).
It said: “As previously reported, the trading performance of the company’s pier division during the period has been negatively impacted by disappointing weather over the August bank holiday weekend that continued into the following month.
“Additionally, weekend railway services to and from Brighton have been disrupted by a major programme of engineering works, resulting in recurrent line closures (with replacement bus services) on the main line from London between the stations at Three Bridges and Brighton.
“This has significantly impacted the number of visitors into Brighton and on to the pier. As such, earnings from the pier have also been lower than expected for the period.
“The company has been informed that these line closures will continue into the second half of the current financial year, including a complete closure over the nine days of February half term and further closures in March, April and May (the start of the pier’s peak trading period).
“However, once the railway upgrades have been completed, the company expects that the improved railway service with fewer interruptions will benefit businesses across Brighton and the trading performance of the pier.”
Mr Johnson has made headlines recently but after the discovery of a financial black hole at one of his other companies, Patisserie Valerie, which has branches in Brighton and Hove.
Brighton Pier Group chief executive Anne Ackord said: “While I am disappointed at the rail network disruptions currently affecting the pier, once they are complete, this will be of great benefit to future visitors travelling to the city and consequently to our Brighton businesses.
“Despite these challenges the company’s pier, bars and golf businesses remain well invested, strongly cash generative and well positioned for future growth.”
The Brighton Pier Group issued its profit warning in a trading update for the six months to the end of December.
It also said: “The board now anticipates that, as a result of the reasons outlined above, profit before tax for the current financial year will be in the region of 18 per cent lower than current consensus expectations.”