The
information contained within this announcement is deemed by the
Group to constitute inside information as stipulated under the
Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations
2019/310 ("MAR"). With the publication of this announcement via a
Regulatory Information Service, this inside information is now
considered to be in the public domain.
10 May 2024
NEWBURY RACECOURSE
PLC
(the "Racecourse" or the
"Company")
Preliminary results for the
12 months ended 31 December 2023
Newbury Racecourse plc, the racing,
entertainment and events business, today announces its preliminary
results for the twelve months ended 31 December 2023.
2023
Financial and Business Summary
· Revenue of £18.96m (2022: £17.42m), an increase of
9%.
· Consolidated group profit on ordinary activities before tax of
£0.72m (2022: £0.13m), including an exceptional profit of £0.7m
(2022: £0.01m), being the release of a
provision in connection with an obligation relating to the sale and
redevelopment of the racecourse.
· Consolidated group profit on ordinary activities after tax of
£0.72m (2022: profit of £0.07m).
· Raceday attendances of 130,000 (2022: 141,000). Twenty-eight
race meetings compared with thirty in 2022, due to three abandoned
race meetings as a result of adverse weather.
· 13%
increase in total prize money to £5.82m (2022: £5.17m) with a 14%
increase in executive contribution to £2.82m (2022: £2.47m), both
metrics unadjusted for the abandoned fixtures.
· £1.6m
joint investment in the Berkshire Stand's first floor facilities
alongside Levy Restaurants (the Company's catering partner) with a
further sum spent on the Hampshire Stand infrastructure.
· Investments made in upgrading the racecourse irrigation system
and the purchase of a lake adjoining racecourse land, as part of a
future planned scheme for the supply of water.
· £1.1m
extension to the on-site children's nursery, adding a sixth room to
increase capacity by over 18%.
· In
light of significant continued investment in facilities and prize
money, the board have decided that no dividend is being
proposed.
· The
Company's new Licenced Betting Office retail rights agreement with
Arena Leisure/Sky Sports Racing commenced on 1st April
2023, followed to include all other media rights for five years
from 1st January 2024.
· Two
races on Lockinge Stakes Day included within World Pool, the
collaboration between global totes and the Hong Kong Jockey
Club.
2024 Update
· The
Company announced another substantial increase in its prize money
commitment for 2024 to a record £7.0m (13% increase) with an
executive contribution of £3.5m (14% increase). This follows
previous record increases in 2023. Any future increases in prize
money will be dependent on the profitability of the underlying
business.
· Additional races committed by Hong Kong Jockey Club to World
Pool on Lockinge Stakes Day, alongside extending the relationship
with additional Hong Kong themed activity at the racecourse as part
of the event.
· Two
Party in the Paddock concerts confirmed for 20th July
(Sigala) and 17th August (Dizzee Rascal).
· Shaun
Hinds will join the Company on 3rd June 2024 as the new
Chief Executive succeeding Julian Thick who has left the business
after ten years' service.
Dominic Burke, Chairman of Newbury Racecourse plc
commented:
"I
am very pleased to announce revenue growth in the underlying
business. Despite losing three fixtures to adverse weather-related
abandonments, turnover grew by 9% demonstrating the value of our
new media rights agreement which commenced in April 2023. Both The
Lodge Hotel and our Conference & Events business grew revenues,
whilst the Rocking Horse Nursery continues to deliver revenue
increases justifying the board's decision to invest in extending
this facility with an additional room which opened during 2023.
Despite this overall revenue increase of 9%, our reported 2023
profit before tax (excluding exceptional profit) was marginally
above break-even, demonstrating the challenges the industry faces
from cost inflation, as well as the Company's decision to make a
significant investment into prize money. This additional prize
money and executive contribution commitment will also extend into
2024 with record amounts announced. Any future increases in prize
money will be dependent on the profitability of the underlying
business.
Our commitment to improving
racecourse facilities continued with a joint £1.6m investment in
the Hennessy Restaurant shared with our catering partner, Levy
Restaurants. This investment has been
made despite a very challenging racing environment, both at Newbury
and throughout rest of the UK, but the board believes in the
importance of providing high quality facilities for all of our
racegoers. We have also upgraded the
Hampshire Stand infrastructure, our irrigation system and purchased
the lake alongside the mile straight as we look to invest for the
future benefit of the business.
On
3rd June this year we welcome Shaun Hinds to the Company
as our new Chief Executive. Shaun joins with over 25 years of
experience in the events, hospitality and travel sectors
and succeeds Julian Thick who has left after ten years' service.
On behalf of the board, I would like to thank Julian for his
significant contribution to the business which he leaves in a
strong financial position and with a world-class racing facility.
We wish Julian well in the future.
Our
sincere thanks, as ever, to all sponsors, partners, owners,
trainers, stable staff, members, racegoers and all customers for
their ongoing support."
For further information please
contact:
Newbury Racecourse
plc
Tel: 01635 40015
Mark Leigh, Interim Chief
Executive
Allenby Capital
Limited
Tel: 0203 328 5656
Nick Naylor/Liz Kirchner (Corporate
Finance)
Hudson Sandler
Tel: 0207 796 4133
Charlie Jack
CHAIRMAN'S STATEMENT
Year ended 31 December
2023
2023 was a year of revenue growth
set against the challenges of cost inflation and the company's
commitment to prize money investment. Revenue grew by 9% to £18.96m
in 2023 (2022: £17.42m) although we were able to host only 28
fixtures, compared with 30 in 2022, due to adverse weather
abandonments. The Nursery extension opened in August with the
overall facility generating turnover of £1.93m (2022: £1.72m)
benefiting from the additional room. Our on-site accommodation, The
Lodge Hotel generated income of £0.86m (2022: £0.74m).
Operating Profit in the year was
£0.49m (2022: loss of £0.01m). Consolidated Profit before tax was
£0.72m (2022: £0.13m), including an exceptional profit of £0.7m
(2022: £0.01m).
The 2023 racing programme was partly
interrupted by three abandonments on 17th January, 27th
October and 28th October due to adverse weather. Despite
this, over 130,000 racegoers (2022: 141,000) were welcomed to the
racecourse for our 28 fixtures. We
continued to demonstrate our support to the industry by making
further significant investment into prize money, with a 13%
increase to £5.82m (2022: £5.17m) as we also increased our
Executive Contribution to prizemoney by 14% to £2.82m (2022:
£2.47m), both metrics unadjusted for abandonments. In early 2024 we
announced further increases to these for the coming
year.
Once again, we played host to some
top-class racing during the year, enhancing our ability to attract
the very best horses across both codes and providing our racegoers
with some outstanding performances on the track. Highlights early
in the year included wins in the Betfair Hurdle for Aucunrisque and for Zanza in the Betfair Denman
Chase.
The start of the 2023 flat season
was held in late April, with Remarquee, Grand Alliance and
Isaac Shelby winning the
main races in the Dubai Duty Free Spring Trials. In May the Al
Shaqab Lockinge Stakes was won by Modern Games against a very strong
field. The Lockinge Stakes Day represented our first opportunity to
enter into the World Pool, which is the collaboration between
global totes and the Hong Kong Jockey Club, for the two key races
that day.
The first Party in the Paddock event
took place after the Weatherby's Super Sprint meeting, with a crowd
of almost 19,000 enjoying the return of Tom Jones who performed
after an excellent day's racing, which saw Relief Rally win the Super Sprint and
Commanche Falls win the
Bet365 Hackwood Stakes. Our second Party in the Paddock in August
saw Olly Murs perform at the BetVictor Hungerford meeting where
Witch Hunter was
victorious in the day's feature race.
Rounding off 2023, Datsalrightgino delighted crowds by
winning the Coral Gold Cup in December. Coral also sponsored the
2023 running of the Grade 1 Challow Novices Hurdle won by
Captain Teague.
Our commitment to improving
facilities at the racecourse continued in 2023 with a joint £1.6m
investment in the Hennessy Restaurant shared with our catering
operator Levy Restaurants, alongside other infrastructure
improvements to the Hampshire Stand. This investment has been made
despite a very challenging racing environment both at Newbury and
throughout rest of the UK, but we believe in the importance of
providing high quality facilities for all of our racegoers. We also
invested approx. £0.5m in an upgraded irrigation system and
purchased the lake on adjoining land alongside the start of the
mile straight, as part of a future planned scheme for the supply of
water. Outside of the racecourse itself, we have increased the
capacity in our Childrens Nursery by investing £1.1m in an
extension to improve the facilities provided by this important
activity.
In light of significant continued
investment in facilities and prize money, the board have decided
that no dividend is being proposed.
At the end of 2023 we were pleased
to announce the appointment of Shaun Hinds as the company's new
Chief Executive succeeding Julian Thick after ten years' service.
Shaun has over 25 years of experience in the events, hospitality
and travel sectors and joins the business on 3rd June
2024. On behalf of the board, I would like to thank Julian for his
significant contribution to the business since arriving in
2013. Julian led Newbury with real purpose and helped the
Racecourse navigate the considerable challenges of the
infrastructure redevelopment programme and the impact of
COVID. Under his direction we have built a world class racing
facility and he departs the racecourse in good financial health. We
welcome Shaun and wish Julian well in the future.
On behalf of the board, I would also
like to thank our staff for their continued hard work during the
year. In addition, I would also like to thank our sponsors for
their ongoing support as well as members, customers, owners,
trainers and all those associated with racing industry for their
continued support of Newbury Racecourse.
DOMINIC J BURKE
Chairman
9 May
2024
STRATEGIC REPORT
Year ended 31 December
2023
STRATEGY AND OBJECTIVES
The Board's strategy is for Newbury
Racecourse plc to provide a profitable and diversified business for
the benefit of all stakeholders. This will be delivered through
first class facilities including a modern market-leading
racecourse, hotel, children's nursery, hospitality, and events
businesses. Where commercially viable these will be supported by
investment in further innovative activities. One of the key aims of
this Strategic Report is to set out and appraise the business model
through which we deliver that strategy.
THE
BUSINESS MODEL
Newbury Racecourse plc is the parent
of a Group of companies which own Newbury Racecourse and engages in
racing, hospitality and associated food and beverage retail
activities. In addition, the Group operates a conference and events
business, a children's nursery, and an on-site hotel. Alongside its
trading activities, the Group also owns freehold property from
which it receives annual income and, until March 2022, benefitted
from the sale of residential properties on the site, as part of a
long-term development agreement with David Wilson Homes.
FINANCIAL & BUSINESS REVIEW
Consolidated group profit on
ordinary activities before tax in the year ended 31st December 2023
was £0.72m (2022: £0.13m) including an exceptional gain of £0.7m
(2022: £0.01m).
Total turnover increased by 9% to
£18.96m (2022: £17.42m). Racing revenues increased by 8% on the
prior year, mainly through an increase in media rights income,
despite three abandonments in the year (2022: One). Across our
other businesses, Conference & Events income increased by 19%
on last year, the Nursery saw a 12% increase from £1.72m to £1.93m
and the Lodge delivered revenue of £0.86m, an increase of £0.12m on
2022 which was the first full year of operation since reopening
following COVID restrictions.
Total costs increased by 10% to
£19.2m (2022: £17.4m). Gross profit increased to £2.69m (2022:
£2.64m) with the margin reducing from 15% to 14% due to the
inflationary costs increases across many areas as well as
additional contribution to prize money.
Overall operating profit before
interest was £0.5m (2022: Loss of £0.01m). Net Interest was a
receivable of £0.23m (2022: £0.14m) due short-term investments and
no loans outstanding. The tax charge of £nil (2022: £0.05m) relates
to the movement in deferred tax during the period.
Exceptional items in 2023 were a
credit of £0.7m (2022: £0.01m) being the release of a provision in
connection with an obligation relating to the land sale and
redevelopment of the racecourse. The prior year related to the fair
value movement on the David Wilson Homes ("DWH") debtor, based upon
the expected timing and value of future receipts. Following the
final receipt being received in 2022, the DWH debtor has now been
fully settled so will have no impact on future financial statement
reporting.
Profit after tax was £0.72m (2022:
£0.07m).
The negative movement in cash
reserves of £1.81m in the period (2022: £1.88m) includes the major
investments in the Hampshire Stand, upgraded irrigation system and
children's nursery extension, as well as the purchase of the lake
adjoining our land. The company remains free of debt.
In light of significant continued investment in
facilities and prize money, the board have decided that no dividend
is being proposed.
Racing
In 2023 we were scheduled to host
three BHA fixtures in addition to the twenty-eight owned fixtures.
The accounts include a total of 28 days racing (2022: 30) with
three abandonments on 18th January, 27th
October, 28th October. Overall declared raceday
attendances in 2023 were 130,000 (2022: 141,000).
The Company's new Betting Office
retail rights agreement with Arena Leisure/Sky Sports Racing
commenced on 1st April 2023, which was followed by all
other media rights on 1st January 2024. Total media
related revenues of £5.82m, were up 13% compared with 2022. In the
year this accounted for 36% of our trading revenue which compares
with 35% in 2022.
May marked the ninth year of Al
Shaqab's sponsorship of Lockinge Day, Newbury's richest race
meeting, which was attended by 8,500 racegoers. This meeting has
established itself as the flagship event in our flat racing
calendar and the action on the track once again featured a string
of outstanding performances. The day also represented our first
collaboration alongside the Hong Kong Jockey Club with both the
Lockinge Stakes and London Gold Cup being World Pool races,
included within their commingling pool.
Our cornerstone jump meeting at the
start of December marked the second year of our revised partnership
with Entain featuring the Coral Gold Cup (formerly the Ladbrokes
Trophy). Attendances across the two-day meeting were just under
16,000.
We continued to make further
significant investment into prizemoney, with a 13% increase to
£5.82m (2022: £5.17m) and also increased our Executive Contribution
to prizemoney by 14% to £2.82m (2022: £2.47m).
We are grateful to have received
continued significant support from all of our key sponsors, with
particular thanks to Al Shaqab Racing, bet365, Betfair, BetVictor,
Dubai Duty Free, Coral, Goffs UK and Weatherby's for their
commitment in 2023.
Catering, Hospitality and Conference &
Events
Conference & Events revenues
were £0.31m (2022: £0.26m), resulting in an operating Gross
Operating Profit of £0.15m (2022: £0.18m). These figures exclude
the income that is attributable to our catering partner, but
overall, we are pleased with the progress now being made in this
sector following the previous decision in early 2022 to cease
proactive marketing. The restructured team is now focused entirely
on growing this part of the business.
2023 represented the second full
year with Levy Restaurants operating our catering business which
runs through to the end of 2031. The reported trading income of
£0.53m (2022: £0.62m) was impacted by abandonments and a
challenging environment within the hospitality sector.
The
Rocking Horse Nursery
The Rocking Horse Nursery traded
positively throughout 2023 with revenues of £1.93m, up 12% against
2022, supported by the opening of an additional room extension in
August. This business unit reported an operating profit of £0.61m
(2022: £0.57m).
The
Lodge
Having reopened in early 2022
following a 22-month closure, our on-site hotel continues to
perform strongly with revenues of £0.86m (2022: £0.74m). This
business unit reported an operating profit of £0.09m (2022:
£0.1m)
KEY PERFORMANCE
INDICATORS
The Group uses raceday attendance,
trading operating profit and cash generated from operating
activities, as the primary performance indicators. 2023 total
attendance was 130,000 (2022: 141,000). Operating profit is shown
within the profit and loss account on page 28 and cash generated
from operating activities is shown within the consolidated
statement of cashflows on page 32.
PRINCIPAL RISKS AND UNCERTAINTIES
Cashflow Risk
The main cash flow risks, under
normal trading circumstances, are the vulnerability of race
meetings to abandonment due to adverse weather conditions, animal
disease and fluctuating attendances particularly for the Party in
the Paddock events. The practice of covering the racetrack to
protect it from frost and investment in improved drainage, as well
as insuring key racedays, mitigates some of the raceday risk, which
was particularly beneficial for the Coral Gold Cup weekend. Regular
review of variable conferencing costs reduces the impact of a
decline in conference sales.
Short term cash flow risk is
mitigated by regular review of the expected timing of receipts and
by ensuring that the Group has committed contingencies in place in
order to manage its working capital and investment
requirements.
Credit Risk
The Group's principal financial
assets are trade and other receivables. The Group's credit risk is
primarily attributable to its trade receivables. The amounts in the
balance sheet are net of allowances for doubtful receivables.
Payment is required in advance for ticket, hospitality,
sponsorship, and conference and event sales, reducing the risk of
bad debt.
Liquidity Risk
In order to maintain liquidity to
ensure that sufficient funds are available for both ongoing
operations and the property redevelopment, the Group uses a mixture
of term debt and revolving credit facilities which are secured on
the property assets of the Group. The Board regularly review
the facilities available to the Group to ensure that there is
sufficient working capital available.
Price Risk
The Group operates within the
leisure sector and regularly benchmarks its prices to ensure that
it remains competitive, as well as having a dynamic pricing model
in place.
Cost Risk
The Group has had a historically
stable cost base. The key risks are unforeseen maintenance
liabilities, movement in utility costs and additional regulatory
costs for the racing business. A programme of regular maintenance
is in place to manage the risk of failure in the infrastructure,
while utility contracts are professionally managed. The Group is a
member of the Racecourse Association, a trade association which
actively seeks to manage increases in regulatory risk.
Interest Rate Risk
The Group previously managed its
exposure to interest rates through an appropriate mixture of
interest rate caps and swaps, although this is currently not
required.
GOING CONCERN
The Board has undertaken a full,
thorough and continual review of the Group's forecasts and
associated risks and sensitivities, over the next twelve months.
The extent of this review reflects the current economic climate as
well as the specific financial circumstances of the
Group.
The Board identified that the
Group's cash flow forecasts are sensitive to fluctuating revenue
streams from ticket sales, corporate hospitality, conference and
event income. A system of regular reviews of the forecasted
business has been implemented to ensure all variable costs are
flexed to match anticipated revenues. In addition, a number of race
meetings have been insured for adverse weather conditions (and
other factors such as animal disease and national mourning),
reducing the levels of risk carried by the Group.
The Board has reviewed the cash flow
and working capital requirements in detail. Following this review
the Board has concluded that it has reasonable expectation that the
Group has adequate resources in place to continue in operational
existence for the foreseeable future and has not identified a
material uncertainty in this regard. On this basis the going
concern basis has been adopted in preparing the financial
statements.
SECTION 172 STATEMENT
Section 172 of the Companies Act
2006 requires Directors to take into consideration the interests of
stakeholders and other matters in their decision making. The
Directors continue to have regard to the interests of the Company's
employees, members, partners, the horseracing community and other
stakeholders, the impact of its activities on the local community,
the environment and the Company's reputation for good business
conduct, when making decisions. The board identifies stakeholders
through its annual strategic review. As the business evolves the
board recognises that those with a direct interest and involvement
in the decisions of the company changes.
In this context, acting in good
faith and fairly, the Directors consider what is most likely to
promote the success of the Company and for these stakeholders in
the long term. For example:
· The
engagement of the business with the horseracing community and
stakeholders, such as the Racecourse Association and Thoroughbred
Group is routinely considered during the board's decision-making
process.
· The
Company has a frequent forum with local residents to ensure that
communication channels are open & accessible.
· The
Company continues to regularly engage with Annual members and
corporate box holders and to encourage feedback and improve the
service provided.
· The
Company encourages a supportive and inclusive working culture
within the business as set out in our 'Uniquely Newbury' employee
programme, alongside supporting personal development and promoting
wellness & mental health awareness.
· The
Company has set up a sub-group to adopt and implement a Diversity
& Inclusion policy across the business.
Key board decisions made during the
year in the interests of overall business success set out
below:
|
Significant
events/decisions
|
Key S172 matters
affected
|
Actions and
impact
|
|
Investment in racecourse
facilities
|
Customers, suppliers, employees,
shareholders, West Berkshire community
|
·
Following the catering partnership agreement with
Levy Restaurants signed in 2021, the company triggered extending
this to the end of 2031 by accepting the final phase of investment.
The initial phase included the redevelopment of the Berkshire Stand
facilities and in 2023. This extended to the Hampshire Stand and
the Hennessy Restaurant. This decision enabled the company to
continue to gain access to technology, innovation, human resources
and with the most effective commercial benefits.
· A
separate investment decision was made to upgrade the irrigation
system for the watering of the racetrack. Following a tender
process, a number of considerations were made to ensure minimal
impact on the infrastructure of the site and disruption to the
local community whilst the work took place.
· The
final significant investment in racecourse facilities was to extend
the children's nursery to add a sixth room in order to satisfy
additional demand within a specific age category. Financial
analysis was conducted to ensure the investment provided a suitable
return based on a valid set of assumptions driven by existing
experience. Competitive tenders were received with the work being
completed by the chosen contractor in late summer.
· In all
the above cases, the decisions made were considered to be in the
best interest of all key stakeholders.
|
|
Prize Money policy
|
Customers, employees, shareholders,
industry stakeholders.
|
·
Following a review in 2022 the board considered
the impact of increasing prize money in response to it's previous
position, relative to peer racecourses. Financial analysis of the
annual race programme was undertaken and the cost impact versus the
benefit of high-quality racing for all stakeholders. The board
decided that in order for the company to remain competitive and
attract the best horses that a further increase in prize money and
additional contribution would be the most appropriate approach.
This decision was considered to be in the best interests of racing
and racing related stakeholders and, ultimately,
shareholders.
|
|
Purchase of Manor Farm
Lake
|
Shareholders, West Berkshire
community
|
·
The opportunity arose to purchase the lake which
adjoins the racecourse boundary beside the mile straight. The board
made the decision to purchase this lake and surrounding access land
based on the number of positive benefits, alongside the
considerations needed given the responsibility involved with its
ownership. Following this exercise the purchase was completed in
late 2023 with compliance with regulations on-going.
|
During the period to 31 December
2023 the Company has sought to act in a way that upholds these
principals. The Directors believe that the application of Section
172 requirements can be demonstrated in relation to some of the key
decisions made and actions taken during 2023.
CORPORATE GOVERNANCE
The Company is committed to
maintaining the highest standards in corporate governance
throughout its operations and to ensure all of its practices are
conducted transparently, ethically and efficiently. The Company
believes scrutinising all aspects of its business and reflecting,
analysing and improving its procedures will result in the continued
success of the Company and deliver value to shareholders.
Therefore, and in accordance with the Aquis Growth Market Apex Rule
Book, (the "AQSE Rules"), the Company has chosen to comply with the
UK's Quoted Companies Alliance Corporate Governance Code 2018 (the
"QCA Code"). The Company is committed to the ten principles of
corporate governance as practiced by the AQSE market. These
principles are disclosed in the 'Corporate Governance Statement'
within this report.
|
CORPORATE AND SOCIAL RESPONSIBILITY
|
Employee Consultation
The Group places considerable value
on the involvement of its employees and has continued to keep them
informed on matters affecting them as employees and on the various
factors affecting the performance of the Group and the Company.
This is achieved through formal and informal meetings, and
distribution of the annual financial statements. Employee
representatives are consulted regularly on a wide range of matters
affecting their current and future interests with our 'Uniquely
Newbury' employee engagement programme at the forefront of these
initiatives.
Policy on Payments to Suppliers
Although no specific code is
followed, it is the Group's and Company's policy, unless otherwise
agreed with suppliers, to pay suppliers within 30 days of the
receipt of an invoice, subject to satisfactory performance by the
supplier. The amount owed to trade creditors at 31 December 2023 is
5% (2022: 7%) of the amounts invoiced by suppliers during the year.
This percentage, expressed as a proportion of the number of days in
the year, is 19 days (2022: 25 days).
Business Relationships
The Directors recognise the need to
foster the company's business relationships with suppliers,
customers and others. To that effect, the Company have policies and
procedures in place, by which principal decisions taken by the
company during the financial year were followed.
Employees who have a
disability
Applications for employment by
persons with a disability are always fully considered, bearing in
mind the abilities of the applicant concerned. In the event of
members of staff becoming disabled every effort is made to ensure
that their employment with the Group continues and the appropriate
training is arranged. It is the policy of the Group and the
Company that the training, career development and promotion of
disabled persons should, as far as possible, be identical to that
of other employees.
Charitable Donations
During the year the Group made
charitable contributions totalling £5,800 to national charities
(2022: £3,500).
This report was approved by the
board and signed on its behalf by:
|
M LEIGH
Interim Chief Executive
9 MAY 2024
|
Consolidated Profit and Loss Account
Year ended 31 December
2023
|
|
|
2023
£'000
|
2022
£'000
|
|
|
Turnover
|
|
18,958
|
17,422
|
|
|
Cost of sales - other
|
|
(16,270)
|
(14,108)
|
|
|
Cost of sales -
exceptional
|
|
-
|
(674)
|
|
|
Gross profit
|
|
2,688
|
2,640
|
|
|
Administrative expenses
|
|
(2,899)
|
(2,659)
|
|
|
Net exceptional items
|
|
700
|
7
|
|
|
Operating profit/(loss)
|
|
489
|
(12)
|
|
|
Interest receivable and similar
income
|
|
230
|
190
|
|
|
Interest payable and similar
charges
|
|
-
|
(52)
|
|
|
Profit before tax
|
|
719
|
126
|
|
|
Tax (charge)/credit
|
|
-
|
(52)
|
|
|
Profit after tax
|
|
719
|
74
|
|
|
|
|
|
|
|
|
Profit per share (basic and
diluted)
|
|
21.47p
|
2.21p
|
|
|
All amounts derive from continuing
operations
|
|
|
Consolidated Cash Flow Statement
Year ended 31 December
2023
|
|
|
|
|
|
|
2023 £'000
|
2022
£'000
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
Profit for the financial
year
|
|
|
|
|
|
719
|
74
|
|
Adjustments for:
|
|
|
|
|
|
|
|
|
Exceptional items
|
|
|
|
|
|
(700)
|
(7)
|
|
Investment Write off
|
|
|
|
|
|
117
|
-
|
|
Amortisation of capital
grants
|
|
|
|
|
|
(3)
|
(17)
|
|
Depreciation charges
|
|
|
|
|
|
1,459
|
1,322
|
|
Interest payable
|
|
|
|
|
|
-
|
52
|
|
Interest receivable
|
|
|
|
|
|
(230)
|
(190)
|
|
Tax charge
|
|
|
|
|
|
-
|
52
|
|
Decrease/(increase) in
stocks
|
|
|
|
|
|
2
|
(18)
|
|
(Increase) in debtors
|
|
|
|
|
|
(249)
|
(553)
|
|
(Decrease)/increase in
creditors
|
|
|
|
|
|
(305)
|
645
|
|
Corporation tax received
|
|
|
|
|
|
-
|
-
|
|
Other associated property
receipts
|
|
|
|
|
|
51
|
148
|
|
Pension top up payments
|
|
|
|
|
|
(142)
|
(138)
|
|
Net
cash inflow from operating activities
|
|
|
|
|
719
|
1,370
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
Interest received
|
|
|
|
|
30
|
-
|
|
Loan repayments received
|
|
|
|
|
103
|
9
|
|
Purchase of fixed assets
|
|
|
|
|
|
(2,659)
|
(1,737)
|
|
Purchase of short term
investments
|
|
|
|
|
|
(19)
|
(2,000)
|
|
Receipts from exceptional sale of
fixed assets
|
|
|
|
|
-
|
10,706
|
|
Net
cash (outflow)/inflow from investing activities
|
|
|
|
|
(2,545)
|
6,978
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
Repayment of CBEL Loan
|
|
|
|
|
|
-
|
(2,712)
|
|
Repayment of bank loan
|
|
|
|
|
|
-
|
(4,500)
|
|
Interest paid
|
|
|
|
|
|
-
|
(18)
|
|
Dividends paid
|
|
|
|
|
|
-
|
(3,000)
|
|
Net
cash (outflow) from financing activities
|
|
|
|
|
|
-
|
(10,230)
|
|
|
|
|
|
|
|
|
|
|
Net
(decrease) in cash in the year
|
|
|
|
|
|
(1,826)
|
(1,882)
|
|
|
|
|
|
|
|
|
|
|
Cash as at 1 January 2023
Cash as at 31 December 2023
|
|
|
|
|
|
4,127
2,301
|
6,009
4,127
|
Notes to the Financial Statements
Year ended 31 December
2023
1.
GENERAL
INFORMATION
Newbury Racecourse plc (the
"Company") is a public company incorporated, domiciled and
registered in England in the UK. The registered number is 00080774
and the registered address is The Racecourse, Newbury, Berkshire,
RG14 7NZ.
2.
ACCOUNTING
POLICIES
2.1
Basis of preparation of financial
statements
The Group and company financial
statements have been prepared under the historical cost convention
unless otherwise specified within these accounting policies and in
accordance with Financial Reporting Standard 102, "the Financial
Reporting Standard applicable in the UK and the Republic of
Ireland" (FRS 102) and the Companies Act 2006.
The Company has taken advantage of
the exemption allowed under section 408 of the Companies Act 2006
and has not presented its own Profit and Loss Account in these
financial statements.
The Parent Company is included in
the consolidated financial statements and is considered to be a
qualifying entity under FRS 102 paragraphs 1.8 to 1.12. The
following exemptions available under FRS 102 in respect of certain
disclosures for the Parent company financial statements have been
applied:
· No
separate Parent Company Cash Flow Statement with related notes is
included
The accounting policies set out
below have, unless otherwise stated, been applied consistently to
all periods presented in these financial statements. Judgements
made by the directors, in the application of these accounting
policies that have significant effect on the financial statements
are discussed in note 3.
2.2
Basis of
consolidation
The consolidated financial
statements incorporate the financial statements of the Company and
its subsidiaries Newbury Racecourse Enterprises Limited and Newbury
Racecourse Management Limited.
2.3
Going
concern
The group and company were, as in
the prior year, cash flow positive at the operating level and has
continued to invest in its fixed asset infrastructure. However, the
cash position during 2023 meant that the company paid no dividends
to shareholders and as at the balance sheet date was free of debt.
The Board has undertaken a full, thorough and continual review of
the Group's forecasts and associated risks and sensitivities, over,
not less than, the next twelve months. The extent of this review
reflects the current economic climate as well as the specific
financial circumstances of the Group.
The Board identified that the
Group's cash flow forecasts are sensitive to fluctuating revenue
streams from ticket sales, corporate hospitality, conference and
event income. A system of regular reviews of the forecasted
business has been implemented to ensure all variable costs are
flexed to match anticipated revenues. In addition, a number of race
meetings have been insured for adverse weather conditions (and
other factors such as animal disease and national mourning),
reducing the levels of risk carried by the Group.
The Board has reviewed the cash flow
and working capital requirements in detail. Following this review,
the Board has concluded that it has reasonable expectation that the
Group has adequate resources in place to continue in operational
existence for the foreseeable future and has not identified a
material uncertainty in this regard. On this basis the going
concern basis has been adopted in preparing the financial
statements.
2.4
Revenue
recognition
Services rendered, raceday income
including admissions, catering arrangement & hospitality
revenues, sponsorship and media related licence fee income is
recognised on the relevant raceday. Income from the arrangement
with outsourced caterers, and other activities where the company is
considered the agent rather than the principal, is recognised at
the agreed share rate on profits or losses generated from such
operation. Annual membership income and box rental is recognised
over the period to which they relate.
Other income streams are also
recognised over the period to which they relate, for example,
conference income is recognised on the day of the conference, the
Lodge Hotel income is recognised over the duration of the guests
stay and nursery income is recognised as the child attends the
nursery.
All income relating to prizemoney
such as HBLB grants and Owner's entry stakes are allocated as
revenue.
Sale of goods: revenue is recognised
for the sale of food and liquor when the transaction
occurs.
Turnover is stated net of VAT (where
applicable) and is recognised when the significant risks and
rewards are considered to have been transferred to the
buyer.
Property receipts are recognised in
accordance with the substance of the transaction being that of an
exceptional sale of land to David Wilson Homes. The minimum
guaranteed sum, as set out in the agreement with David Wilson
Homes, is recognised at the point of sale. In accordance with
FRS102, at each reporting date, the sum receivable, which is
included in Other Debtors, is re estimated based upon currently
projected land value with the difference between this value and the
discounted net present value recorded in the profit and loss
account.
2.5
Other investments
Investments in subsidiaries are
measured at cost less accumulated impairment.
Investments in unlisted Group
shares, whose market value can be reliably determined, are
remeasured to market value at each balance sheet date. Gains and
losses on remeasurement are recognised in the Consolidated Profit
and Loss Account for the period. Where market value cannot be
reliably determined, such investments are stated at historic cost
less impairment.
2.6
Investment income
Dividends and other investment
income receivable are included in the Profit and Loss Account
inclusive of withholding tax but exclusive of other
taxes.
2.7
Lease assets receivable
Lease assets receivable relates to
freeholds that the Group has acquired from David Wilson Homes. The
freeholds concerned relate to residential apartment buildings
constructed as part of the overall residential development.
Individual apartments in the development were sold by David Wilson
Homes to purchasers under long term leases, typically of 125 years.
Under the terms of their long-term leases, lessees are required to
pay 'ground rent' to the freehold owner for the duration of their
lease. As the majority of the risks and rewards, for much of the
life of the property, lie with the lessee, the Group does not
recognise a fixed asset in relation to the freehold to the extent
attributable to the lease.
These are initially recognised at
fair value which is calculated based on the net present value of
future cashflows arising from the ground rents receivable over the
lease term. This also represents the market value of the freehold
agreed at the time of the underlying transaction. These amounts are
included in the balance sheet as debtors less than and greater than
one year. Ground rent receipts relating to the period, are applied
against the net receivable balance. The amounts arising from the
unwinding of discounted cashflows are included in interest
receivable.
2.8
Tangible fixed assets
Tangible fixed assets are stated at
cost or valuation, net of depreciation and any provision for
impairment.
Land is not depreciated.
Depreciation on other assets is charged so as to allocate the cost
of assets less their residual value over their estimated useful
lives, using the straight line method.
Depreciation is provided on the
following basis:
Freehold buildings and outdoor
fixtures
2% - 5% straight line
Tractors and motor
vehicles
5% - 10% straight line
Fixtures, fittings and
equipment
2% - 25% straight line
The assets' residual values, useful
lives and depreciation methods are reviewed, and adjusted
prospectively if appropriate, or if there is an indication of a
significant change since the last reporting date.
Gains and losses on disposals are
determined by comparing the proceeds with the carrying amount and
are recognised in the Consolidated Profit and Loss
Account.
2.9
Impairment
of assets
Financial assets (including trade and other
debtors)
A financial asset not carried at
fair value through profit or loss is assessed at each reporting
date to determine whether there is objective evidence that it is
impaired. A financial asset is impaired if objective evidence
indicates that a loss event has occurred after the initial
recognition of the asset, and that the loss event had a negative
effect on the estimated future cash flows of that asset that can be
estimated reliably.
An impairment loss in respect of a
financial asset measured at amortised cost is calculated as the
difference between its carrying amount and the present value of the
estimated future cash flows discounted at the asset's original
effective interest rate. For financial instruments measured at cost
less impairment an impairment is calculated as the difference
between its carrying amount and the best estimate of the amount
that the Company would receive for the asset if it were to be sold
at the reporting date. Interest on the impaired asset continues to
be recognised through the unwinding of the discount. Impairment
losses are recognised in profit or loss. When a subsequent event
causes the amount of impairment loss to decrease, the decrease in
impairment loss is reversed through profit or loss.
2.10
Impairment of fixed assets
Assets that are subject to
depreciation are assessed at each balance sheet date to determine
whether there is any indication that the assets are impaired. Where
there is any indication that an asset may be impaired, the carrying
value of the asset (or cash generating unit to which the asset has
been allocated) is tested for impairment. An impairment loss is
recognised for the amount by which the asset's carrying amount
exceeds its recoverable amount. The recoverable amount is the
higher of an asset's (or CGU's) fair value less costs to sell and
value in use. For the purposes of assessing impairment, assets are
grouped at the lowest levels for which there are separately
identifiable cash flows (CGUs). Non-financial assets that have
previously been impaired are reviewed at each balance sheet date to
assess whether there is any indication that the impairment losses
recognised in prior periods may no longer exist or may have
decreased.
2.11
Stocks
Stocks are valued at the lower of
cost and net realisable value. Provision is made for
obsolete, slow moving or defective items where
appropriate.
2.12
Repairs and
renewals
Expenditure on repairs and renewals
and costs of temporary facilities during construction works are
written off against profits in the year in which they are
incurred.
2.13
Cash and cash equivalents
Cash is represented by cash in hand
and cash equivalents, being short term highly liquid investments
that are readily convertible to known amounts of cash and that are
subject to an insignificant risk of changes in value.
2.14
Provisions for
liabilities
Provisions are made where an event
has taken place that gives the Group a legal or constructive
obligation that probably requires settlement by a transfer of
economic benefit, and a reliable estimate can be made of the amount
of the obligation.
Provisions are charged as an expense
to the Consolidated Profit and Loss Account in the year that the
Group becomes aware of the obligation and are measured at the best
estimate at the Balance Sheet date of the expenditure required to
settle the obligation, taking into account relevant risks and
uncertainties.
When payments are eventually made,
they are charged to the provision carried in the Balance
Sheet.
2.15
Dividends
Where dividends are declared,
appropriately authorised (and hence no longer at the discretion of
the Group) after the balance sheet date but before the relevant
financial statements are authorised for issue, dividends are not
recognised as a liability at the balance sheet date because they do
not meet the criteria of a present obligation in FRS102.
2.16
Current and deferred
taxation
The tax expense for the year
comprises current and deferred tax. Tax is recognised in the
Consolidated Profit and Loss Account, except that a charge
attributable to an item of income and expense recognised as other
comprehensive income or to an item recognised directly in equity is
also recognised in other comprehensive income or directly in equity
respectively.
The current income tax charge is
calculated on the basis of tax rates and laws that have been
enacted or substantively enacted by the balance sheet date in the
countries where the Company and the Group operate and generate
income.
Deferred tax is provided on timing
differences which arise from the inclusion of income and expenses
in tax assessments in periods different from those in which they
are recognised in the financial statements. The following timing
differences are not provided for: differences between accumulated
depreciation and tax allowances for the cost of a fixed asset if
and when all conditions for retaining the tax allowances have been
met; and differences relating to investments in subsidiaries, to
the extent that it is not probable that they will reverse in the
foreseeable future and the reporting entity is able to control the
reversal of the timing difference. Deferred tax is not
recognised on permanent differences arising because certain types
of income or expense are non-taxable or are disallowable for tax or
because certain tax charges or allowances are greater or smaller
than the corresponding income or expense.
Deferred tax is provided in respect
of the additional tax that will be paid or avoided on differences
between the amount at which an asset or liability is recognised in
a business combination and the corresponding amount that can be
deducted or assessed for tax.
Deferred tax is measured at the tax
rate that is expected to apply to the reversal of the related
difference, using tax rates enacted or substantively enacted at the
balance sheet date. For non-depreciable assets that are measured
using the revaluation model, or investment property that is
measured at fair value, deferred tax is provided at the rates and
allowances applicable to the sale of the asset/property. Deferred
tax balances are not discounted.
Unrelieved tax losses and other
deferred tax assets are recognised only to the extent that is it
probable that they will be recovered against the reversal of
deferred tax liabilities or other future taxable
profits.
Deferred tax assets and deferred tax
liabilities are offset when the entity has a legally enforceable
right to set off current tax assets against current tax
liabilities, and when the deferred tax assets and deferred tax
liabilities relate to income taxes levied by the same taxation
authority on the same taxable entity.
2.17
Grants
Capital grants received are
accounted for as deferred grants on the Balance Sheet and credited
to the Profit and Loss Account over the estimated economic lives of
the asset to which they relate. Capital grants are in deferred
capital grants on the Balance Sheet as the associated works have
been performed and it is not in any way repayable.
2.18
Pensions
Defined contribution plans and other long term employee
benefits
A defined contribution plan is a
post-employment benefit plan under which the company pays fixed
contributions into a separate entity and will have no legal or
constructive obligation to pay further amounts. Obligations for
contributions to defined contribution pension plans are recognised
as an expense in the profit and loss account in the periods during
which services are rendered by employees.
Defined benefit plans
A defined benefit plan is a
post-employment benefit plan other than a defined contribution
plan. The entity's net obligation in respect of defined benefit
plans is calculated by estimating the amount of future benefit that
employees have earned in return for their service in the current
and prior periods; that benefit is discounted to determine its
present value. The fair value of any plan assets is deducted.
The entity determines the net interest expense (income) on the net
defined benefit liability (asset) for the period by applying the
discount rate as determined at the beginning of the annual period
to the net defined benefit liability (asset) taking account of
changes arising as a result of contributions and benefit
payments.
The discount rate is the yield at
the balance sheet date on AA credit rated bonds denominated in the
currency of, and having maturity dates approximating to the terms
of the entity's obligations. A valuation is performed
annually by a qualified actuary using the projected unit credit
method. The entity recognises net defined benefit plan assets
to the extent that it is able to recover the surplus either through
reduced contributions in the future or through refunds from the
plan.
Changes in the net defined benefit
liability arising from employee service rendered during the period,
net interest on net defined benefit liability, and the cost of plan
introductions, benefit changes, curtailments and settlements during
the period are recognised in profit or loss.
Remeasurement of the net defined
benefit liability/asset is recognised in other comprehensive income
in the period in which it occurs. A defined benefit pension surplus
is recognised only to the extent that the entity has an economic
right, by reference to the terms and conditions of the plan and
relevant statutory requirements, to realise the asset over the
course of the expected life of the plan or when the plan is
settled.
2.19 Borrowing and
loan issue costs
Interest bearing bank loans and
overdrafts are recorded at the proceeds received, net of direct
issue costs. Finance charges, including premiums payable on
settlement or redemption and direct issue costs are accounted for
on an accrual basis in the profit and loss account using the
effective interest method and are added to the carrying amount of
the instrument to the extent that they are not settled in the
period which they arise. Debt issue costs are initially recognised
as a reduction in the proceeds of the associated capital
instrument.
2.20
Financial
instruments
Trade and other debtors / creditors
Trade and other debtors are
recognised initially at transaction price plus attributable
transaction costs. Trade and other creditors are recognised
initially at transaction price less attributable transaction costs.
Subsequent to initial recognition they are measured at amortised
cost using the effective interest method, less any impairment
losses in the case of trade debtors. If the arrangement
constitutes a financing transaction, for example if payment is
deferred beyond normal business terms, then it is measured at the
present value of future payments discounted at a market rate of
instrument for a similar debt instrument.
Interest bearing borrowings classified as basic financial
instruments
Interest bearing borrowings are
recognised initially at the present value of future payments
discounted at a market rate of interest. Subsequent to initial
recognition, interest bearing borrowings are stated at amortised
cost using the effective interest method, less any impairment
losses.
Fair value measurement
Assets and liabilities that are
measured at fair value are classified by level of fair value
hierarchy as follows:
Level 1 - quoted prices (unadjusted)
in active markets for identical assets or liabilities.
Level 2 - inputs other than quoted
prices included within level 1 that are observable for the asset or
liability, either directly or indirectly.
Level 3 - inputs for the asset or
liability that are not based on observable market data.
2.21
Exceptional
items
The directors exercise their
judgement in classification of certain items as exceptional and
outside the Group's underlying results. The determination of
whether items should be separately disclosed as an exceptional item
or other adjustment requires judgement on its materiality, nature
and incidence.
3. CRITICAL ACCOUNTING JUDGEMENTS AND
KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Group's
accounting policies, which are described in note 2, the directors
are required to make judgements, estimates and assumptions about
the carrying amounts of assets and liabilities that are not readily
apparent from other sources. The estimates and associated
assumptions are based on historical experience and other factors
that are considered to be relevant. Actual results may differ from
these estimates. The estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the
revision affects only that period, or in the period of the revision
and future periods if the revision affects both current and future
periods.
The following are the critical
judgements and key sources of estimation uncertainty that the
directors have made in the process of applying the Group's
accounting policies and that have the most significant effect on
the amounts recognised in the financial statements.
Impairment of assets
Determining whether assets are
impaired requires an estimation of the value in use of the cash
generating units to which assets have been allocated. The value in
use calculation requires the entity to estimate the future cash
flows expected to arise from the cash generating unit and a
suitable discount rate in order to calculate present value. The
carrying amount of tangible fixed assets and investment property at
the Balance Sheet date was £41.5 million. No indication of
impairment has been identified in 2023 (2022: none
identified).
Residual values and useful economic lives
The Group's tangible fixed assets are
reviewed, whenever there is a relevant change in circumstances or
after relevant review, in order to assess whether the residual
values and useful economic lives, based on management estimates,
continue to be appropriate for calculating depreciation in the
period. There was no change in residual values or useful economic
lives during 2023.
4. EXCEPTIONAL ITEMS
|
Cost of Sales - Exceptional Items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
There were no Cost of sales
exceptional items for 2023 (2022: £0.67m loss incurred by the Great
Christmas Carnival).
|
|
|
|
|
|
|
|
|
Net
Exceptional Items:
|
|
|
|
|
|
|
|
2023
£'000
|
2022
£'000
|
|
|
Loss on disposal of fixed
assets
|
-
|
(24)
|
|
|
DWH debtor movement in fair
value
|
-
|
31
|
|
|
Release of property
provision
|
700
|
-
|
|
|
Total
|
700
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5. PROFIT PER SHARE
Basic and diluted profit per share
is calculated by dividing the profit attributable to ordinary
shareholders for the year ended 31 December 2023 of £719,000 (2022:
£74,000) by the weighted average number of ordinary shares during
the year of 3,348,326 (2022: 3,348,326).
NOTES
The financial information set out
above does not constitute the Company's statutory accounts for the
years ended 31 December 2023 or 2022 but is derived from those
accounts. Statutory accounts for 2022 have been delivered to the
Registrar of Companies and those for 2023 will be delivered
following the Company's annual general meeting.
The information included in this
announcement is taken from the audited financial statements which
are expected to be dispatched to the members shortly and will be
available at www.newburyracecourse.co.uk. The audit report for the
year ended 31 December 2023 and for the year ended 31 December 2022
was unqualified and did not include a reference to any matters to
which the auditor drew attention by way of emphasis, without
qualifying their report or qualified, including if the audit report
contained a statement under section 498(2) (accounting records or
returns inadequate or accounts or directors' remuneration report
not agreeing with records and returns) or section 498(3) (failure
to obtain necessary information and explanations).
This announcement is based on the
Company's financial statements, which are prepared in accordance
with United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards and applicable law), including FRS 102
"The Financial Reporting Standard applicable in the UK and Republic
of Ireland and with those parts of the Companies Act 2006 that are
applicable to companies reporting under UK GAAP.
Neither an audit nor a review
provides assurance on the maintenance and integrity of the website,
including controls used to achieve this, and in particular whether
any changes may have occurred to the financial information since
first published. These matters are the responsibility of the
directors, but no control procedures can provide absolute assurance
in this area.
Legislation in the United Kingdom
governing the preparation and dissemination of financial
information differs from legislation in other
jurisdictions.
This preliminary statement was
approved by the Board of Directors on 9 May 2024