Profits at the Palace Pier have been hit by the extensive railway upgrade taking place between Gatwick and Brighton.
The Brighton Pier Group – which owns the Palace Pier as well as bars and indoor mini-golf attractions – formally reported its half-year financial results this morning (Tuesday 26 March).
The company said in an announcement to the London Stock Exchange that rail disruption continued to affect the pier’s finances – and these account for almost half the group’s income.
But overall revenues rose from £16 million to £16.5 million in the company’s first half – the six months to Sunday 30 December.
Pre-tax profits fell though from £2.3 million to £1.7 million – and the company has already warned investors to expect lower profits for the full year to the end of June.
Brighton Pier Group chief executive Anne Ackord said: “Rail network disruptions to and from Brighton continues to affect the pier which is disappointing.
“However, once the engineering works are complete they will be of great benefit to future visitors travelling to the city and consequently to our Brighton businesses.
“The company’s pier, bars and golf businesses remain well invested, strongly cash generative and well positioned for future growth.”
The company said that revenue for the pier division was £7.9 million, up £100,000 from £7.8 million a year earlier.
It said: “The newly fitted bars and catering facilities combined have outperformed the prior year.”
Sales for the Palm Court restaurant and Horatio’s Bar rose 22 per cent, with earnings up by about £100,000 to £600,000.
The rise was partly the result of growth in the functions business and partly because Horatio’s Bar was trading again, having been closed for a refit in the first half of the year before.
The company said: “Sales across the rest of the pier (primarily from rides and arcades) was down 4 per cent versus the like period, hindered by poor weather and reduced numbers of visitors to Brighton resulting from weekend closures of the mainline railway from London.
“Given that the pier’s rides and arcades have higher margin than the bars and catering, the loss of revenue (excluding bars and catering) has negatively impacted earnings.”
In a more detailed section of the stock exchange announcement, the company said that the trading performance of the pier division “was negatively impacted by disappointing weather over the August bank holiday weekend that continued into the following months”.
The company added: “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 mainline 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.”
Excluding the Palm Court restaurant and Horatio’s Bar, earnings for the pier fell by about £500,000 to £1.2 million.
The London Stock Exchange announcement set out details of the pier group’s main trading divisions. It said: “The Brighton Pier Group PLC owns and trades Brighton Palace Pier as well as 12 premium bars nationwide and six indoor mini-golf sites.
“Brighton Palace Pier, which has once again been recognised as the fourth-most visited free tourist attraction in the country, offers a wide range of attractions including two arcades and 18 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.
“The bars trade under a variety of concepts including Embargo Republica, Lola Lo, PoNaNa, Le Fez, Lowlander, Smash (two ping-pong concept bars) and Coalition.
“The group’s bars division predominantly 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 commitment to exceptional service standards.
“The bars estate is nationwide, incorporating key university cities and towns that provide a vibrant night-time economy and the demographics to support premium bars.
“The golf division (Paradise Island Adventure Golf) operates six indoor mini-golf sites at high footfall retail and leisure centres.”
The company said that the outlook was in line with expectations as set out in the January trading update.
It added: “As expected, closures of the mainline railway from London to Brighton have continued into the second half of the current financial year, including a complete closure over the nine days of the February half term and further closures in March.
“The group has been informed that these closures will continue into April and May (the start of the pier’s peak trading period).
“However, once the railway upgrades have been completed, the group expects that the improved railway service, with fewer interruptions, will benefit businesses across Brighton and the trading performance of the pier.
“The board remains confident that normalised train services to and from Brighton (expected to resume towards the middle of May) … will underpin the company’s performance in the second half of the 2019 financial year and in the following financial year.”