Arena hit as spectators rein in spending

DONCASTER Racecourse owner Arena Leisure said that its performance for the full year will be below market expectations as public attendances drop and businesses rein in corporate spending.

Arena, which operates seven racecourses and hosts a quarter of the UK’s annual horseracing fixtures, said as a result of “the current economic conditions” there had been a reduction in the spend of customers on- course compared to the previous year.

The group said it had experienced “a marked decrease in the sale of private and corporate hospitality packages” which had had an impact on profitability.

In the nine months to September 30 2008, Arena hosted 275 fixtures with total attendance of 531,000 – an increase on 440,000 it attracted in 2007.

In a interim management statement for the period from July 1 to October 15 2008 the group, which operates the Doncaster, Southwell and Worcester racecourses, said attendances on a like-for-like basis were down on 2007 levels, although ahead of the UK horse racing industry as a whole.

Doncaster racecourse – which reopened in August 2007 – hosted 25 meetings in 2008 with attendance of 173,000 compared to 74,000 the previous year.

Four successful days racing were delivered at the 2008 St Leger Festival in September with attendance over the four days of 59,000 – a decrease on the previous years figures of 66,000 .

During the period Arena sold 45,600 private and corporate hospitality packages compared to a figure of 51,300 in 2007.

The group said the 2008 St Leger festival delivered 10,000 hospitality packages compared to 13,000 sold in 2007 – which the group said highlighted the decrease in income stream during 2008.

Arena said early indications from the first weeks of Wolverhampton Racecourse’s Autumn-Winter series of 44 Friday and Saturday fixtures show that attendance and revenues are down on expected levels.

The group said that in the light of the economic crisis it was acting to protect profitability by ensuring its operating cost base is aligned with the reduced level of attendances and the operating synergies arising from bringing its catering operation in-house are being actively exploited.

In particular, a specific plan to “materially reduce operating costs at Doncaster Racecourse is in progress.”

The group said it had restructured its sales organisation with the appointment of three new sales managers and the implementation of new procedures to boost turnover.

The catering business is continuing to perform well, however the group said that as catering performance is linked to customer demand and overall attendance levels it has been impacted accordingly.

The group says it remains on course to generate a record level of profit from its catering operations in 2008.

The group said At The Races – a digital TV channel – in which Arena owns a 45.85% stake, continues to perform in line with expectations.

Mark Elliott, chief executive, said: “The board is of the opinion that trading conditions over the final quarter of the year will remain challenging and that the current disappointing attendance and spending trends are likely
to continue. As a result, despite the measures being taken to protect profitability, the board now expects that Arena’s performance for the full year will be significantly below current market expectations.

“Arena continues to build on its strong operating credentials in order to remain well placed for when trading conditions improve and continues to make progress on its development strategy. The board remains confident of Arena’s long term prospects.”