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Newbury Racecourse Plc (NYR)

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Wednesday 19 September, 2012

Newbury Racecourse Plc

Development Agreement with David Wilson Homes


                                                              19 September 2012

                            NEWBURY RACECOURSE PLC                             

                      ("the Racecourse" or "the Company")                      

                 Development Agreement with David Wilson Homes                 

Newbury Racecourse plc, the racing, entertainment and events business is
pleased to announce that it has completed the joint venture Development
Agreement (the Agreement) with David Wilson Homes Limited ("DWH") regarding the
long term redevelopment of the racecourse.

The Agreement will see DWH purchase three areas of land at the racecourse known
as the Western, Central and Eastern sites on which c.1500 homes are to be
constructed over the course of the anticipated 10 year development programme.
This will bring considerable benefits to the local community, which , include
30% of the new homes being affordable and shared equity housing, substantial
investment in the local road network and bus and rail routes and a contribution
towards primary and secondary education, healthcare and adult social care.

Following the sale of the land to DWH the Company will begin a racecourse
development programme which will deliver new and refurbished trading facilities
and infrastructure so that the Racecourse retains its market leading position
in the UK horse racing industry.

Financial Benefits

As part of the Agreement:

  * DWH is committed to pay a minimum of £42.6 million over the course of the
    ten year programme with the majority of payments being received in the
    latter stages of the project
   
  * The Racecourse is expected to receive £33 million net of tax and all
    related costs over the course of the ten year programme
   
  * The Racecourse will receive an initial cash payment of £5.1 million
   
  * The Racecourse has the potential to receive additional payments in excess
    of the £33 million through further profit participation depending on the
    success of the residential development over the duration of the 10 year
    programme
   
Newbury Racecourse Customer Benefits Funded by DWH

  * A new bridge to access the residential sites will be constructed which will
    provide enhanced access to the racecourse
   
  * New parking facilities for visitors and enhanced road infrastructure
   
  * A new multifunctional facility which will provide stable staff
    accommodation
   
  * Refurbished stables
   
  * A new nursery which will replace the existing building, providing a high
    quality facility for the local community
   
Racecourse Refurbishment and Development

In order to ensure that the Company achieves its stated long term strategy of
developing the Racecourse as a profitable, leading racecourse, entertainment
and events business with racing at its core, the Board is reviewing a number of
options to refurbish the grandstands and associated visitor areas. The Board is
engaging with funding providers so that these works could, if appropriate, be
undertaken in advance of property receipts from DWH. Works under consideration
include:

  * Refurbishment of the Berkshire stand to improve its facilities for
    racegoers
   
  * A new weighing room providing a backdrop to the paddock thereby providing
    more retail space within the Berkshire stand
   
  * A new paddock, pre-parade ring and landscaping around the grandstands to
    create a greener and more attractive environment with enhanced viewing for
    both racing and year round events
   
  * Improved facilities for owners, trainers and members
   
  * New offices and entrances to the racecourse to facilitate the new parking
    arrangements and to create an improved arrival experience
   
These potential enhancement works at the racecourse remain under review. It is
estimated that, in their entirety, the cost of such works to be paid for by the
Company would be up to £12 million.

The Board is exploring options to work with external partners to deliver the
proposed hotel and the development of the golf facilities at the racecourse.

Timetable and Local Employment

It is anticipated that the planned DWH infrastructure works will start in 2012,
with housing sales from mid 2013. Subject to finance and the Board finalising
its plans, a significant proportion of the racecourse enhancement works would
take place in 2014 and 2015.

The construction of the residential apartments on the Central Site and the
proposed hotel will form a second phase from 2015 after the new bridge has been
built. The redevelopment will create a range of local employment opportunities
during the course of the construction period. To ensure control over the
construction programme and the quality of the planned redevelopment, the
project will be managed through a joint committee with members from DWH and the
Company chaired by a Newbury Racecourse representative.

Additionally, to ensure all local stakeholders have the opportunity to
contribute to the project and the new community, there will continue to be
regular meetings of the Newbury Racecourse Public Liaison Group.

Transaction Structure

DWH is committed to pay Newbury Racecourse a minimum £42.6 million, backed by
guarantee from parent company Barratt Developments plc, over the course of the
10 year development programme in respect of the Residential Development Sites
at the racecourse. Initially, the Racecourse will receive a payment of £5.1
million on completion of the contract and DWH will meet the costs of the DWH
infrastructure works over the coming years.

In respect of the Central and Western Sites, a full land title transfer to DWH
will occur on the date of the completion of the contract. The transfer of full
land title in respect of the Eastern Site to DWH is conditional on the exercise
of a put option, that allows the Racecourse to require DWH to purchase the land
at the Eastern Site at any stage after the sale of the Central and Western
Sites.

The Company has the potential over the duration of the development to receive
additional land payments in excess of the minimum and up to a threshold of £
48.0 million. If and when the threshold has been achieved and paid to the
Company then DWH's operating margin relating to the development of the
Residential Development Sites will be allowed to rise to the higher level of
the cap and collar mechanism set out in the Development Contract. After DWH has
received its higher capped level of DWH operating margin for its development
services, then the Company will be entitled to 50 per cent of the development
profits generated by the development (with DWH receiving the remaining 50 per
cent) determined in accordance with the Development Contract. Whilst it is
anticipated that property sales will start in mid 2013, the majority of
payments received by the Company will come during the latter stages of the
project.

The Board expects to be required to make payments for corporation tax due in
respect of chargeable gains relating to the sale of the land and also payments
to Network Rail linked to the construction of the new bridge and the easement
over the railway. It is estimated that these costs will total £15m over the
life of the project.

Racecourse Refurbishment and Development

As noted above, the potential expenditure on the Racecourse Refurbishment and
Development remains under assessment and review by the Board to ensure
acceptable returns for shareholders from any such investments that may be made
in support of Company's strategy. It is estimated that the cost of all such
works to be paid for by the Company would be up to £12 million if implemented
in their entirety.

Dividend

The Company remains focused on redeveloping the Racecourse and transforming it
into a successful leisure, entertainment and events business with the
racecourse as its core asset. It remains the Board's stated strategy to return
capital to Shareholders in a tax efficient manner, either as dividends or as
capital payments, as the development of the Residential Development Sites
generates cash receipts for the Company in excess of its requirements.

It is unlikely that any significant dividend will be declared or any
significant return of capital effected from profits arising from Newbury
Racecourse's property-related activities in the early phases of the planned
redevelopment.

The Board intends to recommence paying dividends (arising from profits
attributable to the Company's non-property activities) as soon as appropriate
and as the Company's trading activities improve.

Commenting on the Agreement Dominic Burke, Chairman of Newbury Racecourse,
said:

"We are delighted to have completed this Agreement with David Wilson Homes. It
is a key stage in our long term strategy of releasing value from our land
assets to develop the facilities and infrastructure of the racecourse.

It will ensure the success of the Racecourse as a profitable year round racing,
entertainment and events business with racing at its core, whilst providing
longer term returns for our shareholders, securing the future of racing at
Newbury and the important role it plays in the UK racing industry and the local
Berkshire community."

Commenting on the Agreement Paul Crispin, Managing Director of David Wilson
Homes Southern, said:

"Today we are announcing a partnership that will deliver one of the most
exciting housing developments to take place in the UK in recent years. We will
be creating up to 1,450 first class homes, whose style and design are focussed
on complementing the outstanding and historic setting of Newbury Racecourse,
while providing a unique new community for residents. We are delighted that
this partnership will enable the Racecourse to develop its infrastructure and
facilities alongside our development."

For further information, please contact:

Newbury Racecourse plc                      Tel: 01635 40015                   
                                                                               
Sarah Hordern                                                                  
                                                                               
Joint Managing Director                                                        
                                                                               
Hudson Sandler                              Tel: 020 7796 4133                 
                                                                               
Michael Sandler / Charlie Jack / Katie                                         
Matthews                                                                       

Notes to Editors

Newbury Racecourse plc is a leading racing, entertainment and events business.
The grounds started hosting racing fixtures in 1805 and have evolved to become
one of the UK's leading racecourses hosting world renowned fixtures including
the Hennessy Gold Cup.

The Company (or 'the Racecourse') has grown its core racing offer to include
conferencing and events and hosting large scale music concerts with leading
international acts whose performances take place on the racecourse.

In 2012 the Racecourse completed a joint venture development agreement with
David Wilson Homes Limited to undertake an exciting long-term redevelopment of
the grounds. The agreement saw David Wilson Homes purchase three areas of land
at the racecourse on which up to c.1500 homes are to be constructed over the
course of an anticipated 10 year timetable. In conjunction with the agreement
there will be a comprehensive development programme which will deliver new and
refurbished racing facilities and infrastructure to ensure the Racecourse
retains its pre-eminent position within the UK horse racing industry.

As part of the development, the Racecourse rebranded itself as The Racecourse
Newbury. The rebrand forms part of the future of the Racecourse's evolving
offering as a year round entertainment and events destination at the heart of
the Berkshire community.

The Racecourse is listed on the PLUS Stock Exchange.

Further information can be found at www.newbury-racecourse.co.uk

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