“It was Pete Townshend who wrote ‘Down by the sea and sand, nothing ever goes as planned’ for The Who’s Brighton-based Quadrophenia rock opera and the management team of Brighton Pier plc have plenty of reasons to agree, after the impact of rail replacement works on the London-Brighton line and then the pandemic upon key parts of their business,” says AJ Bell investment director Russ Mould. “Yet there is finally some good news for the bars-to-golf and pier-to-theme parks group. A £5 million Business Interruption insurance claim has been paid out, while fun- and refreshment-seekers have started to return to its bars and sites in greater numbers as the economy begins to reopen in the wake of the multiple rounds of lockdown.
“Prime Yorkshire leisure site Lightwater Valley, acquired in the summer for £5 million, is already making a positive contribution and as a result sales are up by nearly 150% across the group as a whole compared to a year ago. Revenues from Brighton Pier, the portfolio of bars and the mini-golf sites are up not just against 2020’s pandemic-depressed levels, but against 2019 too.
“This suggests that those consumers who were fortunate enough to keep their jobs and avoid either unemployment or the furlough scheme have both savings and a desire to get out and about and spend that money, which bodes well for Brighton Pier plc and the British economy more generally.
“The key now for the Luke Johnson-backed company is whether this momentum can be maintained.
“The insurance claim is a one-off benefit that means the profit figures for the fiscal year to June 2021 will exceed expectations. The company has also been helped by rates relief and a reduction in VAT and what could have been an initial burst of relief from thirsty, hungry and fun-starved customers.
“The shares are at least trading above the levels reached in the wake of January 2019’s profit warning, when railway engineering work on the lines between London and the South Coast badly hit trading at Brighton’s Palace Pier and footfall at its Le Fez and Coalition late night bars was weak. That suggests investors are warming to the possibility of a rapid turnaround in the group’s fortunes after a torrid couple of years.”
