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Newbury Racecourse Plc (NYR)

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Monday 11 June, 2018

Newbury Racecourse Plc

AGM Statement

11th June 2018

NEWBURY RACECOURSE PLC
(“the Racecourse” or “the Company”)

AGM Statement

At the Annual General Meeting to be held at Newbury Racecourse today, the Chairman, Dominic Burke, will make the following statement:

As stated in the latest Annual Financial Statements, the financial results for 2017 saw us making further steady progress against our long term strategy of redevelopment and growth. We saw improvements in trading performance across a number of areas of the business, with like for like growth in racing revenues of 1%, another excellent year for the Rocking Horse Nursery with growth in revenues of 30% and revenue from The Lodge hotel operation increasing by 76% in its first full year of trading. The Conference and Events business had a more difficult trading year with turnover down 26%, in our view, a result of both wider market conditions and the inevitable short term impact of the construction works on the appearance of the venue.

Current trading

Our 2017/18 jump season was packed full of memorable performances, including Native River’s winning reappearance in the Denman Chase on Betfair Super Saturday which preceded his Cheltenham Gold Cup victory. We also saw the return of Altior the same day before he too went onto Cheltenham Festival success and the day itself was packed full of Festival clues with a highly competitive Betfair Hurdle won by Kalashnikov. The 2018 flat season got underway with Dubai Duty Free Spring Trials Weekend and some striking performances which highlighted Classic credentials. Those included Derby contender, The Young Rascal and Lah Ti Dah. Most recently, we hosted the £750,000 Al Shaqab Lockinge Day, which was attended by over 11,000 racegoers and it was a great thrill to see the brilliant, Aiden O’Brien-trained, Rhodedendron win the Group 1 Al Shaqab Lockinge Stakes, eleven years since the last filly won the race.

Following on from the success of our music events in 2017, we are delighted with the line-up for our summer 2018 Party in the Paddock racedays. On Weatherbys Super Sprint Day in July we will be hosting Craig David and we are delighted to have recently announced the brand new £100,000 JLT Cup to boost the already strong card. Betfred Ladies Day in August features the always competitive Hungerford Stakes with popular DJ band, Rudimental, performing live after racing. Tickets sales are currently strong for both events.

We continue to focus on growing our non-racing businesses, which remains challenging whilst the development is ongoing, but we are pleased to report that Conference and Events business on the books to date is currently 22 per cent ahead of this time last year.

Our on-site hotel, The Lodge, is delivering year on year growth in occupancy levels, with year to date revenues currently 22 per cent ahead of this time last year, although we expect it will take another six to twelve months for the hotel to reach steady state trading.

The Rocking Horse Nursery continues to trade strongly, with average occupancy having increased by 6 per cent year on year, resulting in revenue growth of 17 per cent in the year to date.

The Redevelopment

Our own “Heartspace” development continues to progress well. The current phase of works which includes re-modelling the main parade ring and improvements to the customer areas behind the stands, is due to be completed by the end of 2018. The refurbishment of the Berkshire Stand and improvements to the wider infrastructure continue and our customers are starting to see the benefits of these works which will enhance the visitor experience for all, whilst generating improved financial returns for the wider business in the longer term.

In August we were granted planning consent for the upgrading of the Pall Mall stand, a much needed investment in this aged building which occupies a prime location opposite the winning post and will, when completed, provide some of the most prestigious hospitality space on the racecourse. The total cost of this project is an estimated £5.17m, taking our total projected redevelopment investment to an estimated £21.0m.

The David Wilson Homes residential development is now more than halfway through, with c.870 homes out of the total 1,480 now built. Demand for new homes on the site remains strong and sales and reservations remain in line with expectations. The Central Area, which comprises some three hundred and sixty apartments, is almost complete and the Eastern Area development is well underway, comprising a 750 unit mix of traditional homes and apartments, with approximately 30 homes already occupied. This final phase of development is expected to take until late 2021 to complete.

Outlook

In 2017 we made steady progress, in line with our long term plans and we remain firmly focused on driving forward our strategy, to ensure that the racecourse continues to offer both world class racing and world class facilities, to support the long term growth and profitability of the wider business. 

The recent announcement by the Department for Digital, Culture, Media and Sport confirming that the maximum stake for Fixed Odds Betting Terminals (“FOBTs”) will be capped at £2, if sanctioned by Parliament in 2019, is predicted to have a significant impact upon betting shop profitability and as a result there could be a material reduction in betting shops.  The implications of such changes on the horse racing industry are difficult to predict at this early stage, but it could adversely affect sponsorship from bookmakers, prize money from the Horserace Levy Betting Board and revenues from media rights.

As stated in the 2017 financial statements, the additional investment by the company in Phase Two of the redevelopment and the current uncertainty around the impact of the government review on FOBTs, means the Board have decided that any return to paying dividends or returning capital to shareholders must be deferred until completion of the racecourse development and the final payment is received from David Wilson Homes. Therefore, it is not anticipated that any dividend or return of capital to shareholders, if made, will now occur before 2022 at the earliest, following repayment of the Compton Beauchamp Estates loan and the final longstop date in the residential property development contract between the company and David Wilson Homes.

We are looking forward to a busy summer of racing and the remainder of what is set to be another transformational year for Newbury Racecourse.

For further information please contact:

Newbury Racecourse plc
Julian Thick, Chief Executive
Tel: 01635 40015

Harriet Collins, Interim Head of Communications
Hudson Sandler
Charlie Jack
Tel: 020 7796 4133


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