(Sharecast News) – Brighton Pier Group tumbled as it warned on profits after a “more difficult” second quarter, citing the cost-of-living crisis.
In its results in April, the company had said that trading in the first quarter, although below the equivalent exceptional period in 2022, was in line with market expectations. However, it said on Tuesday that the second quarter has proved more difficult.
Sales are still behind 2022, with the current macroeconomic environment leading to a widespread decline in disposable incomes and consumer confidence. Brighton Pier said total sales for the six months to 25 June are expected to be about £16.2m.
The company said ongoing inflationary pressures, in particular when it comes to food & drink and staff costs, have dented operating margins.
“The combined effect of these lower sales with the inflationary cost pressures are expected to result in earnings after tax below market expectations,” it said.
In July, trading was hit by unseasonably poor weather, train strikes and most significantly, the impact of the fire at a major hotel opposite the entrance to the Pier, which resulted in about a week of disruption.
Chief executive Anne Ackord said: “The group is navigating a challenging trading environment, with persistent high inflation and reduced footfall continuing to affect disposable incomes across many of the group’s trading sites. When combined with the ongoing cost pressures we face it has led to lower-than-expected sales and earnings in the first half of 2023.
“While we still have many of the key summer weeks to come, recent trading in July has been impacted by a number of events outside of our control namely weekend train strikes, stormy weather and the hotel fire across the road from the pier which has disrupted sales. We will still attempt to capitalise on the forthcoming school holiday period of August, traditionally the busiest and most profitable period in our year.
“With current economic trends set to continue in the short to medium term the outlook must continue to be one of caution.”
At 1400 BST, the shares were down 26% at 42p.