RACECOURSE operator Arena Leisure has seen a decline in full-year pre-tax profits after attendances declined and meetings were disrupted by bad weather.
The company, which operates seven courses in the UK including Wolverhampton, Worcester and Doncaster, issued a profits warning in January after the ice and snow during the last five weeks of 2010 caused seven meetings to be abandoned.
It has also warned that 2011 is likely to remain tough with a significant reduction expected in the Levy yield.
“We expect another challenging year and, on that basis, we do not anticipate material overall growth in 2011,” it said in a results statement.
Combined with the challenging leisure market, revenues declined £1.2m last year from £65.2m to £64m. Pre-tax profits took a £500,000 hit, falling from £4.1m in 2009 to £3.6m last year.
Earnings per share were down from 1.16p to 1.02p and the company said it was maintaining its final dividend at 0.38p per share. However, Arena did manage to reduce its net borrowings, the figures declining by £6.5m to £39.8m.
Mark Elliott, Arena chief executive, said: “Arena has produced another solid performance this year. The group’s increasing diversity of income streams has helped reduce the impact of the on-going difficult trading conditions facing the wider racing industry.
“Arena continues to demonstrate operational excellence in its core business with industry-leading growth in average attendances at our racecourses.”
However, he warned 2011 was likely to remain challenging and that current trading was in line with expectations.
It said it would look to maximise revenue opportunities and was optimistic about the performance of its Lingfield Park Marriott Hotel and a new five-year media rights agreement.
“Arena remains extremely well positioned for growth into 2012 and beyond,” added Mr Elliott.
It said Wolverhampton Racecourse now had planning consent for a combined hotel and casino development that will extend the existing hotel from 54 to 170 bedrooms. This project is dependent on a small casino licence being granted by Wolverhampton City Council.
Tenders for this licence will be invited in August 2011, with the final award expected in summer 2012.
Arena will participate in the tender and it said its belief was that the mixed-use scheme of casino, racecourse and an extension to the existing hotel would provide an attractive offering for the all-weather course.
Doncaster Racecourse has planning consent for a 120-bedroom hotel and 34 residential units. This consent was recently extended until mid-2013. The board said it remained confident of the commercial viability of the scheme.
