UK leisure business Brighton Pier Group (LON: PIER) shares have surged over 23% Friday after it said earnings for FY 21 are expected to significantly exceed market expectations on the back of settled insurance claims.
Business Interruption Insurance claims totalling £5 million have been recently settled with Brighton Pier's insurers. Payments of £4.1 million have been received to date, with a remaining £0.9 million received yesterday.
The claims related to losses incurred during the pandemic hit year ending June 2021.
“Earnings for FY 21 are expected to be £2 million higher than market expectations on the back of the confirmation of these insurance receipts,” stated Brighton Pier Group,
Trading in the first 13 weeks of the financial year has also been strong for the company, with the summer weather, school vacations, and the August bank holiday weekend contributing significantly to the group's annual sales and earnings.
Trading has also been boosted by pent-up demand and disposable incomes built up during lockdown, significant increases in domestic holidays, a temporarily reduced VAT rate, and rates relief by way of Government support and the addition of the newly acquired Lightwater Valley theme park.
With all four of Brighton Pier's divisions mostly open throughout, the London-listed firm has reported total net sales for the 13 weeks of £15.9 million. This represents a 145% rise from the same period in 2020 and a 44% increase from the pre-Covid period in 2019.
Combined with trading from the newly acquired Lightwater Valley business, the results have exceeded the company's expectations.
As a result it expects revenue and earnings for the 52 weeks to 26 June 2022 to be “significantly ahead of market expectations.”
Anne Ackord, CEO of Brighton Pier Group, said: “The sales over this important 13-week trading period have been very strong across all divisions. I am particularly pleased at the contribution Lightwater Valley has made to the group's results and to see all our bars back open and performing so well after such a long period of closure.
“It is also good to be able to report a new record, with the final bank holiday week of this summer being the first time in the Pier's history that it has achieved gross sales in excess of £1 million over a single week.”
Brighton Pier Group shares are sitting at the 66p level, up 23.3% from Thursday's close and adding to the over 90% year-to-date gains.
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