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Fri 29th Sep 2017 - Update: Brighton Pier Group and Richoux Group results
Brighton Pier Group reports turnover passes £30m, creates new chief executive role as it plans further acquisitions: Brighton Pier Group, which has sector investor Luke Johnson as chairman, has reported revenue increased 39% to £31.3m for the year ending 25 June 2017 compared with £22.6m the previous year. The company, which owns and trades Brighton Palace Pier as well as 14 bars under its Eclectic division, saw group Editda before highlighted items rise to £5.2m compared with £2.3m the previous year. Pre-tax profit climbed 278% to £3.5m compared with £900,000 the year before. The company has appointed Anne Martin to the newly created role of chief executive of Brighton Pier Group. Johnson said: "Brighton Palace Pier is an iconic landmark and leisure attraction in Brighton, offering a wide variety of seaside entertainment including rides, amusement arcades, bars, a restaurant and other food and retail kiosks. I believe this acquisition capitalised on a significant opportunity for the group to acquire the freehold of a valuable asset, while at the same time broadening its business base. The enlarged group has also benefited from the extensive experience of the pier's management team, led by Anne Martin. Revenue generated has transformed the existing business during the current financial year, providing substantial free cash flow for use within the enlarged group and enabling the possibility of funding further acquisitions across the leisure and entertainment sector, as and when opportunities arise. During the first financial year of ownership, the pier business has traded in line with our expectations. The group continues to make good progress rationalising the bars division together with driving operational and financial improvements across the estate. During the 52-week period, we have disposed of six marginal sites and since the year end we have let part of our freehold site in Derby to a new restaurant owner. Whilst these actions have resulted in reduced sales and closure costs, Ebitda losses from these venues during the period equated to £0.2m, the elimination of which will benefit trading in the coming financial year. At the end of this financial period, the combined group improved profitability, doubling its basic adjusted earnings to 10.9p per share (4.2p per share for the same period last year). This financial success demonstrates what results the group can continue to accomplish through effort and application." The company stated: "Since the end of the financial year, trading on the pier during August and September has been mixed and did not match the strong trading performance of financial year 2016, owing to rain and strong winds. The management team at the pier has shown itself adept at generating revenue when the sun shines and saving costs when possible. In September 2016, we reported on the new soft play trial in the Glitter Bar, the new takeaway fish & chip shop on the pier head, and the launch of the new website. The success of the soft play trial gave us the confidence to launch the largest soft play area in Brighton, with the creation of 'Palace Play' in the Dome, totalling 231 square metres with a capacity for 140 children. A new café has also opened in the Dome, providing an area for parents and friends to relax whilst their children play. Both facilities opened in March 2017, enabling us to increase the price of the children's wristband and thus, contributing positively to trading at the pier. Palace Play also has the advantage of offering a leisure space all year round and an activity for local Brighton families and guests to enjoy in the winter months. The new takeaway fish and chip shop opened in June 2016 and has been a notable success, repaying its investment by the end of the first summer of trading. The new website has been a strong tool in driving online sales of wristbands and has helped to offset some of the negative effects caused by the disruption of train services over much of the summer. The quick and easy train service into Brighton from London is a major benefit to all businesses in Brighton, as well as the wider local population, and whilst there have recently been some improvements in the service, a resolution to these disputes would be welcomed to allow it to return to full service. In December, we launched our first Christmas market on the pier. Incorporating 20 stalls, it provided an incentive to visit the pier during its winter season. The additional footfall created by the market benefited the restaurants, arcades and rides during what would otherwise be a quiet period. The plan next year is to develop the market further and consider whether there may be similar events that could be added to the pier's calendar during the quieter off-peak season. The bars division has continued to focus on reducing operating costs, maintaining gross margins, reviewing the potential disposal of marginal and unprofitable sites (where the opportunity arises), minor refurbishments to three venues, and the launch of 'Smash', a new venue within the group's Reading Sakura site. Progress continued to be made in these areas during the period. Gross margin has improved by 200 basis points against the same period last year, despite cost increases, which have been filtering through from the weak pound. Focus has been on regular reviews of competitor pricing, targeting customers into more profitable products, and supplier support. Labour and controllable costs continue to be tightly managed, with unprofitable nights being closed and underperforming or marginal venues being disposed of. Six sites have been disposed of since June 2016. The street level bar of Reading Sakura was redeveloped and reopened at the end of May 2016 as Smash. The bar trades during post-work hours and in the evening with a menu that includes fresh-dough pizza and craft beer. In addition, the venue provides activity areas for customers to enjoy games of ping pong with friends and to watch major events on large screens. Work is now underway to open our second Smash in Wimbledon with the conversion of the existing Po Na Na venue; this will open on 30 September. In December 2016, we started a programme to install new EPOS, and now all sites have been fully installed. This upgrade provides integrated chip and pin, which massively reduces the risk of defalcation, as well as improved end of day routines that allow the general manager to spend less time on back office duties and more time driving sales and improving the customer experience. The new software and hardware simplify the connectivity of new apps, improve speed of service and reduce annual maintenance costs. During the period, the Bars division undertook a rebuild of the Eclectic websites. These were all completed at the end of February, improving online bookings, mobile functionality and creating a single content management system for all the brands. At the end of January 2017, Manchester Lola Lo underwent an upgrade to develop and modernise its offering, with the addition of media screens, a dedicated 'Master Class' bar and changed seating areas. The new media screens enable Lola Lo to display major sporting and other events throughout the venue. A similar upgrade was completed to Cambridge Lola Lo at the end of April 2017. Since the year end, a further minor refit has taken place to convert the second floor of Reading Sakura to a Coalition, thus concluding a full upgrade to the whole site during the year. In the short to medium term, the group sees development opportunities for the pier business, including the potential to improve its catering and hospitality offering. An ambitious investment plan will be underway shortly to create more capacity within the Palm Court restaurant and in Victoria's Bar, both inside and outside. These changes are intended to improve the surroundings and provide more flexible space for conferences, functions, and weddings on the pier, as well as extra seating during the busy summer months. At the same time, we are also developing plans for Horatio's Bar, utilising the broader group's expertise of bar management. These exciting developments will start in October and November of this calendar year, and are anticipated to impact trading in the coming financial year, with an immediate benefit expected to be generated next summer. In terms of the bars division, the group will continue to focus on providing quality service and delivery in respect of the group's existing sites, whilst also continuing to undertake selective investment to improve the estate, dispose of the remaining two closed sites, and target developments and acquisitions when opportunities arise. The successful disposal of the six loss-making sites in this period, and the development to convert our Wimbledon site to a Smash will benefit trading in the coming financial year. The long-term strategy of the enlarged Group is to capitalise on the skills of both the bars and the pier divisions to create a growth company operating across a diverse portfolio of leisure and entertainment assets in the UK. The group will achieve this objective by way of organic revenue growth across the whole estate, together with the active pursuit of future potential strategic acquisitions of and entertainment destinations, thus enhancing the Group's portfolio to realise synergies by leveraging scale. It is the board's longer-term strategy to position the company as a consolidator within this sector."

Richoux Group reports turnover down 20% as it sees 'no consistent improvement' in trading: Richoux Group, the owner and operator of 17 restaurants under the Richoux, Villagio and the Friendly Phil’s brands, has reported turnover fell 20.2% to £5.65m for the 28 weeks to 9 July 2017 compared with £7.08m the previous year. The company, which said it had seen no "consistent improvement" in trading conditions, saw adjusted operating loss before pre-opening costs, impairment, reorganisation costs and onerous lease provision decrease to £0.73m (2016: £0.63m). Pre-opening costs for the period were £0.39m (2016: £0.09m). The net loss for the period was £1.12m (2016: £0.58m). The company had cash of £4.73m at the period end compared with £3.86m in December 2016. On 12 September, the group entered into a new ten-year lease for a new office in Tilehurst at a rent of £13,650 per annum. The company stated: "During the first half, we have focused on improving our restaurant teams, food and premises, as well as laying the foundations for significant improvements in our digital capabilities. We have modernised our Richoux restaurants while staying true to our traditional heritage, and have rebranded our Dean's Diners into our new Friendly Phil's format. We successfully disposed of three underperforming units during the period, and have disposed of a further two since the period end. The Group has six Richoux restaurants – in Knightsbridge, Mayfair, Piccadilly, Gloucester Arcade, Port Solent and Chislehurst. The Port Solent and Chislehurst restaurants were previously Villagio restaurants and were converted into Richoux restaurants in February and March 2017 respectively. The restaurant in St John's Wood closed in May 2017 when the restaurant lease ended. The restaurants in Gloucester Arcade, Knightsbridge and Piccadilly were refurbished in May, June and July 2017 respectively. The group currently has six Friendly Phil's restaurants, in Hempstead Valley, which opened in March 2017; Port Solent, which opened in April 2017; Chatham, which opened in May 2017; Braintree which opened in May 2017, Canterbury, which opened in May 2017; and Fareham, which opened in June 2017. These restaurants were previously Dean's Diner restaurants apart from Canterbury, which was a Zintino restaurant. The restaurant in Bicester was sold in January 2017, the lease for the restaurant in Orpington was surrendered in April 2017, the restaurant in Trowbridge was sold in September 2017 for £50,000 (before costs), and the lease for the restaurant in Yate was surrendered in September 2017 for a reverse premium of £99,808 (before costs). The group currently has four Villagio restaurants in Andover, Basildon, Hammersmith, and Chatham. The restaurant in High Wycombe was sold at the end of January 2017. The group also has one Italian restaurant trading as Zippers Bar, Restaurant and Grill in Chatham. Capital expenditure of £3.71m was incurred in the period; on the rebranding and refurbishment of the existing restaurants. Over the past six months we have continued to refresh our estate, and have focused on restaurant design, food and service quality. We have experienced some growth in trade of the rebranded restaurants but, in line with the industry, not at the level we had hoped for and we currently see no consistent improvement in trading conditions from those prevailing when we last reported in April this year."

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