TIDMPIER
RNS Number : 8334M
Brighton Pier Group PLC (The)
14 May 2020
14 May 2020
The Brighton Pier Group PLC
("Brighton Pier Group" or the "Group")
COVID-19 update
The Brighton Pier Group PLC owns and trades Brighton Palace
Pier, as well as twelve premium bars nationwide (including two
ping-pong concept bars) and eight indoor mini-golf sites.
Following the announcement of the Group's Interim results on 17
March 2020, the Group today provides a further update on the impact
of the coronavirus outbreak on trading, more detailed information
on the Government support being utilised and the steps the Group
has taken to protect the business for the longer term.
On 20 March 2020, the Prime Minister instructed all hospitality
and leisure venues to close from that evening and the Group
consequently closed to the public all its bars, golf venues and
Brighton Palace Pier. These closures are in support of the national
effort to maximise "social distancing" in order to control the
coronavirus pandemic and thereby ensure that the Group's customers,
staff and their families are kept safe.
The Group expects that these closures will materially impact its
financial results for the period ending 28 June 2020 and
potentially also the subsequent period if mandatory closures or
social distancing measures continue into the summer and beyond.
Given the unprecedented nature of the virus, it is not possible to
forecast the precise length of time that the Group's venues will
remain closed and so, whilst its focus first and foremost has been
to protect its customers and staff, the Group have also implemented
measures that significantly reduce costs and preserve cash until
trading resumes.
The Group can now report that all full and part-time staff
working in its businesses (and in respect of whom a payroll
submission had been made to HMRC on or before 19 March 2020) have
been retained. By 1 April 2020, of the 500 staff employed across
the Group, 485 were furloughed and 15 remained active; a further
five have been furloughed since. Those who remain active include
essential maintenance and security teams on the pier, together with
senior management across the Group's three divisions. All
management and staff have agreed to take pay cuts for the duration
of the closures and the Group is also obtaining grants from the
Government's 'Coronavirus Job Retention Scheme' (which the
Government have announced will continue to some extent until at
very least the end of October); these measures have significantly
reduced the net cash cost of the Group's payroll during the closure
period, whilst enabling the Group to retain its workforce.
Other mitigations include:
- 12 months rates free period across all Group venues from the Government's rates holiday scheme
- deferral of the March 2020 quarterly VAT payment to March 2021
using the Government's VAT scheme
- support from landlords to reduce the cash impact of the March 2020 quarter rent period
- support from many suppliers with whom standstill arrangements
have been agreed, reducing controllable costs during the closure
period to minimal amounts
- support from creditors, who have extended credit terms for
amounts outstanding at the date the Group's venues closed
- reduced capex spending to only essential capital repairs during the closure
Claims for losses arising from mandatory closure of the Group's
venues have been lodged with its insurers but the amount of any
pay-out is not yet certain.
The Group has obtained two new Coronavirus Business Interruption
Loans (of GBP5 million in aggregate) from their principal bank,
Barclays. Both term loans are for a period of 2 years and 9 months
and are in addition to Group's existing term debt and revolving
credit facility. Simplified covenants and a loan repayment holiday
on the existing facilities have been agreed to the end of June
2021, which accommodates the loss of revenues during the closures.
Formal documentation of these variations and new facilities is
being completed over the coming days, but the full proceeds from
the new term loans have already been received.
As announced in its interim results, the Group's net debt as at
29 December 2019 was GBP11.0 million (which equated to 2.0x its
EBITDA for the 12 months to that date). The Group continues to
adopt a conservative approach to debt and will focus on reducing
leverage below 1.5x by the end of FY 2022.
These actions to conserve and raise cash have been possible with
the considerable support of the Group's staff, landlords,
suppliers, bankers and the Government.
Looking beyond these mandatory closures towards a return to
normal trading, the Group is confident that its pier, bars and golf
businesses remain well invested, strongly cash generative and well
positioned for future growth.
Commenting, Anne Ackord, Chief Executive Officer, said:
"The United Kingdom and especially the leisure and hospitality
industry have had to endure significant challenges over the last
three months in its efforts to assist with fighting the coronavirus
pandemic.
I am very grateful for the continued support given to us by
Barclays, who have been at our side throughout these difficult
months and also to our many suppliers and landlords. It's important
for me to say how much we value these partnerships.
Most of all, I want to say a big thank you to all our staff at
every level of the business for the way they have responded to
these unprecedented events.
We are ready to progress with the safe re-opening of our
businesses, which must necessarily follow the steps set out in the
Government's 'Covid-19 recovery strategy'. Whilst the timing will
depend on a number of factors which remain uncertain, getting back
to work is now the focus."
Enquiries:
The Brighton Pier Group Tel: 020 7376 6300
Luke Johnson, Chairman Tel: 020 7016 0700
Anne Ackord, Chief Executive Officer Tel: 01273 609361
John Smith, Chief Financial Officer Tel: 020 7376 6300
Panmure Gordon (UK) Limited (Nominated Adviser Tel: 020 7886 2500
and Joint Broker)
Corporate Finance
Atholl Tweedie
Corporate Broking
Charles Leigh-Pemberton
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 ("MAR")
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END
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