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.
|
| 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.
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CORPORATE AND SOCIAL RESPONSIBILITY
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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:
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M LEIGH Interim Chief Executive |
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) |
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| Profit before tax | | 719 | 126 |
|
| Tax (charge)/credit | | - | (52) |
|
| Profit after tax | | 719 | 74 |
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| |
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| Profit per share (basic and diluted) | | 21.47p | 2.21p |
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| All amounts derive from continuing operations
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Consolidated Statement of Comprehensive Income
Year ended 31 December 2023
| | |
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| | 2023 £'000 | 2022 £'000 |
| |||
| Profit for the financial year | | | |
|
| 719 | 74 |
| |||
| Remeasurement of the net defined benefit liability | | |
|
| (148) | 585 |
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| Deferred tax on actuarial (loss)/gain | | | |
|
| - | (176) |
| |||
| Other comprehensive (loss)/profit for the year | | | | | (148) | 409 |
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| Total recognised profit in the year | | | |
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| 571 | 483 |
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Consolidated Balance Sheet
As at 31 December 2023
| | | | | | | 2023 £'000 |
2022 £'000 |
| Fixed assets | | | | | |
| |
| Tangible assets | | | | | | 43,214 | 41,395 |
| Investments | | | | | | - | 117 |
| | | | | | | 43,214 | 41,512 |
| Current assets | | | | | |
| |
| Stocks | | | | | | 38 | 40 |
| Debtors | | | | | |
| |
| - due within one year | | | | | | 2,959 | 2,676 |
| - due after more than one year | | | | | | 3,545 | 3,533 |
| Short term deposits at bank | | | | | | 2,019 | 2,000 |
| Cash at bank and in hand | | | | | | 2,301 | 4,127 |
| | | | | | | 10,862 | 12,376 |
| Creditors: amounts falling due within one year | | | | | (4,101) | (3,787) | |
| Net current assets | | | | | | 6,761 | 8,589 |
| Total assets less current liabilities | | | | | | 49,975 | 50,101 |
| Creditors: amounts falling due after more than one year | | | | - | - | ||
| Provisions for liabilities | | | | | | (3,287) | (3,987) |
| Pension deficit | | | | | | - | - |
| Net assets | | | | | | 46,688 | 46,114 |
| Capital grants | | | | | |
| |
| Deferred capital grants | | | | | | 22 | 19 |
| Capital and reserves | | | | | |
| |
| Called up share capital | | | | | | 335 | 335 |
| Share premium account | | | | | | 10,202 | 10,202 |
| Revaluation reserve | | | | | | 75 | 75 |
| Equity reserve | | | | | | 143 | 143 |
| Profit and loss account surplus | | | | | | 35,911 | 35,340 |
| Shareholders' funds | | | | | | 46,666 | 46,095 |
| Net assets | | | | | | 46,688 | 46,114 |
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Consolidated Statement of Changes in Equity
As at 31 December 2023
| GROUP | Share Capital £'000 | Share Premium £'000 | Capital redemption Reserve £'000 | Revaluation reserve £'000 | Profit and loss account £'000 | Total £'000 |
| At 1 January 2023 | 335 | 10,202 | 143 | 75 | 35,340 | 46,095 |
| Profit for the year | - | - | - | - | 719 | 719 |
| Other comprehensive income | - | - | - | - | (148) | (148) |
| Total comprehensive income | - | - | - | - | 571 | 571 |
| Dividends Paid | | | | |
|
|
| At 31 December 2023 | 335 | 10,202 | 143 | 75 | 35,911 | 46,666 |
| GROUP | Share Capital £'000 | Share Premium £'000 | Capital redemption Reserve £'000 | Revaluation reserve £'000 | Profit and loss account £'000 | Total £'000 |
| At 1 January 2022 | 335 | 10,202 | 143 | 75 | 37,857 | 48,612 |
| Profit for the year | - | - | - | - | 74 | 74 |
| Other comprehensive income | - | - | - | - | 409 | 409 |
| Total comprehensive income | - | - | - | - | 483 | 483 |
| Dividends Paid | - | - | - | - | (3,000) | (3,000) |
| At 31 December 2022 | 335 | 10,202 | 143 | 75 | 35,340 | 46,095 |
Unrealised other reserves of £198,000 arose in Newbury Racecourse plc on disposal of the land south of the racecourse to Newbury Racecourse Enterprises Ltd in 2001.
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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: | | |
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| | | |
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| There were no Cost of sales exceptional items for 2023 (2022: £0.67m loss incurred by the Great Christmas Carnival). | ||||||||
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| Net Exceptional Items: | | |
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| |||
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| 2023 £'000 | 2022 £'000 |
| |||||
| Loss on disposal of fixed assets | - | (24) |
| |||||
| DWH debtor movement in fair value | - | 31 |
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| Release of property provision | 700 | - |
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| Total | 700 | 7 |
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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
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