Morning Note – 25 September 2023

Brighton Pier Group - Interim Results

Bright Pier Group’s (BPG) H1 results reflect the highly challenging operating environment, with revenue -9% YoY to £16.2m and Adj EBITDA of £1.4m (H1/22A £3.0m). This decline was driven by weaker consumer demand (falling disposable incomes and low consumer confidence), train strikes and poor weather. Trading in H2 has remained relatively subdued, and as such, we lower our FY23E Adj EBITDA forecasts to £4.2m (from £5.5m). Whilst disappointing, we note that the group remains cash generative and co

Cenkos: Brighton Pier Group Plc -- H1/23 Trading Update

Brighton Pier Group (BPG) has released a H1/23 update which confirms trading has been more subdued than previously expected, impacted by the weak macroeconomic environment, train strikes, poor weather, and disruption caused by fire at a hotel near to the pier, whilst cost pressures have also been more intense. We adjust our forecasts in response, with Adj PAT reducing from £1.0m to £0.5m. Whilst clearly disappointing, we note that all four of the group's divisions remain profitable at the EBITDA

Cenkos: Brighton Pier Group Plc -- A solid set of results

Brighton Pier Group (BPG) delivered a robust set of results for the 18-months to December 2022, with revenues of £58.9m up 19% on the same pre-Covid period, and Adj EBITDA of £13.9m beating our forecast (of £13.5m). Whilst economic conditions remain challenging, we believe BPG remains well-placed to navigate the current challenging economic conditions – the business is cash generative (net debt almost halved over the 18-months from £13.1m to £7.1m), whilst the diverse nature of BPG's leisure ass

Cenkos: Brighton Pier Group Plc -- 18-month trading update

Brighton Pier Group (BPG) has released a solid trading update for the 18-months to December 2022, with revenues of £58.9m being up 19% on the same pre-Covid period. Current trading is in-line with market expectations. We update our FY23E forecasts to align with the new December year-end, which results in a slight reduction in Adj EBITDA (-4% to £6.5m) to reflect the more challenging economic environment that this period now spans. Whilst profitability is currently being impacted by elevated cost

Cenkos: Consumer Q1/23

Key Observations Despite a second successive decline in CPI during the quarter, inflation remained at one of the highest levels in 40 years (10.5% in December) contributing to a winter of discontent, with each day in December facing some form of industrial action. The industrial action materially impacted the consumer sector and provided an insight into the simmering frustration around the decline in real wages of the UK population. There were multiple examples of consumer corporate failures d

Cenkos: Consumer Q3/22 Review

Third Quarter Key Observations  Escalating inflation continued to cut further into consumers' discretionary income, impacting demand across the consumer sector. The systemic rise in input costs significantly impacted companies' bottom lines, testing the resilience of even the strongest in the sector, as businesses balanced the long-term need to maintain relevance to their customer base (in terms of pricing & quality) whilst also seeking to navigate immediate economic challenges. The Gf

Cenkos: Brighton Pier Group Plc -- Strong results, challenging outlook

Brighton Pier Group (BPG) performed strongly during the 12 months to June 2022, which resulted in the company beating forecasts that had already been twice upgraded (FY22E Adj EBITDA of £6.5m originally forecast vs £10.8m ultimately achieved). All divisions performed well, with trading boosted by pent-up consumer demand and government support packages. The outlook appears more muted, however, driven by elevated inflation and the widely documented ‘cost-of-living crisis'; consequently, we lower o

Cenkos: Brighton Pier Group Plc -- FY22E results ahead of expectations

We had already upgraded our FY22E Adj EBITDA forecast twice this year, and in its full year trading update, Brighton Pier Group (BPG) announces that it has further outperformed expectations, with Adj EBITDA of £10.8m ahead of our £10.4m forecast. All divisions performed well, with LFL sales comfortably ahead of pre-Covid levels. Given the sharp deterioration in the UK (and global) economic outlook seen this calendar year, with inflation continuing to rise and consumers facing a ‘cost of living c

Cenkos: Brighton Pier Group Plc -- Trading in line with expectations

Brighton Pier Group (BPG) has released a trading update, confirming it continues to trade in line with market expectations for FY22E. We have already upgraded our numbers twice this year; the latest of which occurred in March 2022. Given the sharp deterioration in the UK (and global) economic outlook seen since then, with inflation continuing to rise and consumers facing a ‘cost of living crisis', we consider the fact that BPG continues to trade in line with expectations as an impressive achieve

Cenkos: Brighton Pier Group Plc -- Upgrading FY22E forecasts for a second time

Brighton Pier Group (BPG) has released very positive interim results, with group revenue up 33% on H1/19A (ie pre-Covid) to £22.8m (+178% YoY), Adj EBITDA of £7.9m (H1/20A £2.0m), and a £4.9m reduction in net debt over the six months. All divisions traded well, as the group capitalised on the rise in UK staycations and pent-up demand for leisure activities. Positive momentum has continued into H2/22E, meaning that BPG is trading ahead of expectations for the full year. Following our 85% upgrade

Cenkos: Brighton Pier Group Plc -- Trading “comfortably in line” for FY22E

Brighton Pier Group (BPG) has released an encouraging H1/22E trading update, with group revenue of £22.7m representing a 177% YoY increase, and up 31% versus the same (pre-Covid) period in 2019. All divisions traded well, including the Bars division (LFL revenue +27% vs 2019) which, despite current restrictions having an impact in December, had a robust finish to the year. The group continues to be solidly cash generative, enabling management to repay an expected £7.7m of bank debt by FY22E. Th

Cenkos: Brighton Pier Group Plc -- FY21A Annual Results

Despite the extremely challenging operating environment caused by the pandemic, Brighton Pier Group PLC (BPG) delivered a solid set of results for FY21A, with Adj EBITDA of £5.1m was largely in line with our recently upgraded forecasts (FY21E £5.2m). This was helped, in particular, by £5m BPG received in insurance proceeds, as well as robust trading for the Golf sites and Pier once they were allowed to open. BPG acquired Lightwater Valley theme park during the year for a highly attractive valuat

Cenkos: Brighton Pier Group Plc -- 85% upgrade to FY22E Adj EPS

Brighton Pier Group Plc (BPG) has traded remarkably well during the first 13 weeks of its financial year, with net sales up 44% versus the same period (pre-Covid) in 2019. BPG also successfully settled its business interruption insurance claims in full, meaning it will now receive £2m more in FY21E than we had forecasted (£5m in total). We update our FY21E forecasts to account for this, as well as materially upgrading our FY22E projections (Adj EPS raised 85% to 11.9p) to reflect the very positi

Cenkos: Brighton Pier Group Plc - Acquisition of Lightwater Valley Attractions

Brighton Pier Group (BPG) has announced a highly complementary acquisition of Lightwater Valley Attractions Ltd (‘Lightwater'), which owns and operates a leading family theme park in North Yorkshire, for up to £5.0m (c5x normalised EBITDA). We upgrade our forecasts to reflect this earnings enhancing deal (FY22E Adj EPS increased by 14% to 6.4p). With outlook appearing very positive for the group, and the shares trading on an undemanding FY22E Adj P/E of only 9.0x, we reaffirm our Buy rating.