Propel Newsletter Archive Page

Brighton Pier Group reports ‘encouraging’ summer but warns full year sales and earnings could be ‘lower than previously expected’: Brighton Pier Group has reported an “encouraging” summer but warned its full year sales and earnings for 2024 could be “lower than previously expected”. The company said in a trading update: “As reported in the 26 July 2024 trading update, adverse weather conditions in the early months of the year resulted in sales and earnings at the pier being lower than previously expected. Trading in the busier summer months was more encouraging, with like-for-like sales of £11.5m for the group in the 12-week period ending 15 September 2024, only £0.2m or 2% behind the equivalent weeks in 2023 (2023: £11.7m). Total sales at the pier for this period were £6.3m (2023: £6.0m), boosted by the successful introduction of the £1 admission fee for non-residents. Despite the performance of the summer trading period, the pier-led sales and earnings deficit to original expectations from the earlier months of the year has not been recovered, and the board’s current expectation is that this shortfall will persist through the remainder of the current financial year. As a consequence, the group’s outlook remains one of caution in the short-to-medium term. The board believes that if trading continues in line with the last few months, full year sales and earnings will be lower than previously expected for 2024.” Chief executive Anne Ackford said: “As previously reported, the group experienced disappointing trading conditions during the first half of the year. While a warmer weather spell during August and the successful implementation of a £1 admission charge on the pier for non-residents offered some respite, the overall demand across the estate has remained subdued as consumers continue to closely manage discretionary spend. Looking forward, the group is focusing on disciplined cost management, which will put us in the strongest possible position to capitalise once economic conditions have improved. We are also actively looking into longer term options that will reduce the pier’s reliance on good weather.” It comes as the group reported that for the six-month period ended 23 June 2024, on a like-for-like basis (excluding the impact of the three closed or disposed sites in the bars division) total revenues for the group were £13.9m (2023: £14.9m). As previously reported by the group, the majority of this £1m year-on-year shortfall arose from the pier, where adverse weather conditions led to lower footfall throughout the period. The remaining three divisions traded broadly in line with expectations. Total like-for-like revenue in the period was £13.9m (2023: £14.9m). Total revenue in the period was £13.9m (2023: £16.2m). Group Ebitda was £0.4m (2023: £1.4m). Profit before tax was £0.2 million (2023: loss of £3.9m). Net cash flow from operations was £1.1mi (2023: £3.2m). Net debt was £7.6m (24 December 2023: £7.4). Brighton Palace Pier sales of £6.4m were down £1.1m versus last year (2023: £7.5m), due to wet and windy weather throughout the first half of the year that forced rolling closures of higher-margin rides, and a general downturn in domestic tourism in Brighton. The bars division continues to operate in a challenging trading environment but has in large parts successfully mitigated the severity of the trading challenges through the closure and disposal of three loss-making sites in early 2024. As a result, on a like-for-like basis total sales of £2.6m (2023: £2.8million) were down only £0.2m versus 2023. The golf division delivered a consistent trading performance, with total sales of £3.2 in line with the previous year (2023: £3.2m). Lightwater Valley saw a 26% increase in visitor numbers during the period, which was driven primarily by successful marketing campaigns that targeted key dates. Sales of £1.7m were 16% ahead of last year (2023: £1.4m), with lower average admissions prices through targeted promotional offers partially offsetting the impact of the resulting larger number of visitors.

Signs that modern slavery victims were being forced to work at a McDonald’s branch were missed for years: Signs that modern slavery victims were being forced to work at a McDonald’s branch were missed for years, the BBC has found. A gang forced 16 victims to work at either the fast-food restaurant or a bread factory while well-established signs of slavery were missed. McDonald’s UK said it had improved systems for spotting “potential risks”, while the British Retail Consortium said its members would learn from the case. Six members of a family-run human trafficking network from the Czech Republic have been convicted in two criminal trials, which were delayed by the covid pandemic. Nine victims were forced to work at the McDonald’s branch in Caxton, Cambridgeshire. The victims, who were all vulnerable, earned at least the legal minimum wage, but nearly all of their pay was stolen by the gang. The exploitation ended in October 2019 after victims contacted police in the Czech Republic, who then tipped off their British counterparts. Warning signs missed for at least four years include victims’ wages were paid into bank accounts in other people’s names – at the McDonald’s, at least four victims’ wages were being paid into one account, controlled by the gang, and victims working extreme hours at the McDonald’s – up to 100 a week, with one victim working a 30-hour shift. “It really concerns me that so many red flags were missed, and that maybe the companies didn’t do enough to protect vulnerable workers,” said Dame Sara Thornton, the former independent anti-slavery commissioner.

Bank of England warning for businesses owned or backed by private equity: Businesses owned or backed by private equity are “more vulnerable to default than all other” large businesses, the Bank of England has warned. Companies involved with private equity are at greater risk of being unable to meet all their debts compared to corporates that primarily borrow from mainstream lenders such as banks, according to a report published on the Bank’s research website. The warning was underpinned by data gathered by Bank researchers who mapped out the scale of private equity-backed firms in the UK economy. It showed that more than two million people are working for a business engaged with PE funds and that these companies are liable for 15% of all UK corporate debt, reports The Times. The researchers said that companies backed by PE are more likely to be at risk of breaching their debt obligations as they tend to generate lower earnings and returns in proportion to their interest expenses. Just over one in five of these companies were at risk of default last year — down from one in four in 2022 — compared with around 11% of listed companies and 14% of all other businesses. The researchers said: “A larger proportion of PE-backed corporates simultaneously breach key thresholds for [debt sustainability] metrics than in the respective samples for all other corporates and listed corporates.” About a third of all jobs at PE-backed corporates are in London, the Bank of England said, by far the area with the greatest density of PE-reliant employment in the UK.