5th June 2019
NEWBURY RACECOURSE PLC
(“the Racecourse” or “the Company”)
At the Annual General Meeting to be held at Newbury Racecourse today, the Chairman, Dominic Burke, will make the following statement:
As stated in the latest Annual Financial Statements, the financial results for 2018 demonstrated growth in a number of key areas of the business. Total turnover grew by 8% to £19.29m in 2018 and operating profits (excluding exceptional profits) of £0.84m, were a 71% increase on the prior year. We saw improvements in trading performance across a number of areas of the business, including like for like growth in racing revenues of 7%, another excellent year for the Rocking Horse Nursery with growth in revenues of 10% and revenue from The Lodge hotel operation increasing by 20%. We also saw good recovery in the Conference and Events business with turnover up 22%.
Our 2018/19 jump season provided us with many memorable performances including Colin Tizzard’s first and second in the Ladbrokes Trophy with Sizing Tennessee and Elegant Escape. The aptly named, Champ, stole the show when winning the Grade 1 Betway Challow Hurdle at the end of December in the colours of JP McManus and going onto win at Aintree’s meeting. February’s Betfair Saturday was regrettably abandoned as a result of the equine influenza outbreak, but was an insured fixture so the financial loss was largely mitigated. We were delighted to host the retiring Noel Fehily at our finale meeting at the end of March which saw most of Lambourn descend on Newbury to wish him well. The 2019 flat season got underway with Dubai Duty Free Spring Trials Weekend and we saw competitive renewals of both the Watership Down Stud Greenham Stakes won by the Marcus Tregoning trained, Mohaather. Always a fascinating meeting, we hope to see many of the winners become stars of the future. Most recently, we hosted the £750,000 Al Shaqab Lockinge Day, which was attended by over 11,200 racegoers, a 5% increase on last year. For the first time the meeting incorporated Ladies Day, which was positively received. A fantastic card, with a wide open Lockinge, made for competitive viewing, with the Sir Michael Stoute trained, Mustashry, landing the spoils and narrowly beating the wonderful Laurens. Crystal Ocean’s back to back victories in the Al Rayyan and a fascinating two-year-old race which featured a first runner for US trainer Wesley Ward at the track. Betting turnover was up on the day and strong viewing figures of over 700,000 on ITV’s main channel is encouraging to see.
Trading prospects for the rest of 2019 look satisfactory to date. We are seeing very strong sales for our two confirmed Party in the Paddock events, Tom Jones in July and Madness in August. Our Conference and Events business has had a positive first quarter with business on the books up significantly on the prior year and growth across a number of key markets.
Our on-site hotel, The Lodge, is continuing to deliver year on year growth in occupancy levels, with year to date revenues currently 15% ahead of the same time last year.
The Rocking Horse Nursery continues to trade very well. We have seen significant growth in this part of the business for the last 3 years, but we do expect this growth to steady as the facility is now close to its operational capacity.
There are, however, trading headwinds to come, in particular the fallout from the FOBT situation and the impact of this on the UK betting landscape. The implications for the horse racing industry and for our business specifically, remain difficult to predict at this time, but it is very likely to have a material adverse impact on future contributions to prize money funding from the Horserace Betting Levy Board (HBLB) and the Company’s revenues from media rights. In spite of this, we intend to maintain our total prizemoney for 2019 at £5 million but, like many other racecourses, we will need to manage carefully our future prizemoney commitments, in light of this situation and the recent HBLB announcement.
The re?modelling of the main parade ring and improvements to the customer areas behind the stands are now completed and we are delighted with the results and the positive feedback from patrons. The phased refurbishment of the Berkshire Stand and improvements to the wider infrastructure have continued and have significantly enhanced the visitor experience which will as a consequence help us to deliver improved financial returns in the future. Upgrading of the Annual Members’ facilities will shortly be underway, including the refurbishment of the Carnarvon Room in the Berkshire Stand and the works to the Wine Cellar in the Hampshire Stand.
Having obtained planning consent in 2017 for a full re?development of the Pall Mall building, the Board revisited the strategy for this facility and the decision was taken to proceed with a reduced scheme, encompassing the Royal Box building only. This scheme will both restore the Royal Box, being our most prestigious facility, to its former glory and will also provide enhanced access, viewing and public facilities. Works to the Royal Box are expected to commence later this year.
The David Wilson Homes residential development is now more than halfway through, with c.930 homes out of the total 1,495 now built. Demand for new homes on the site remains positive and sales are broadly in line with expectations. The final phase to the east of the site is well underway, comprising a 750 unit mix of traditional homes and apartments and it is expected to take until late 2021 to complete.
We were deeply saddened by the death of one of our long standing non-executive directors, Laurie Todd, in August of last year. Laurie contributed a huge amount, in his 10 years on the board at Newbury, not least as Chair of the Audit Committee and he is sadly missed. We are pleased that Bryan Burrough has accepted our invitation to join the board as non-executive director and his experience means he is well placed to assume the role of chair of the Audit Committee, as Laurie’s successor.
We would also like to pay thanks to Brian Stewart-Brown who, after 20 years on the board, formally stands down today as non-executive director. Brian joined the board in 1999 and his significant commercial and racing expertise has been instrumental in driving forward the board’s strategy for growth and profitability – we thank him for his contribution and commitment to Newbury Racecourse.
As previously stated, given the additional investment in the racecourse and the current uncertainty around the financial impact of the FOBT situation, the Board have decided that any return to paying dividends or returning capital to shareholders is not now anticipated to occur before 2022 at the earliest, following repayment of the Compton Beauchamp Estates loan and the final longstop date in the residential property development contract between the Company and David Wilson Homes.
Our redevelopment will enable us to continue growing our well?diversified business activities and maximise the returns from our investments.
We are looking forward to an exciting summer of racing and the remainder of what is set to be another busy year for Newbury Racecourse.
For further information please contact:
Newbury Racecourse plc Tel: 01635 40015
Julian Thick, Chief Executive
Harriet Collins, Marcomms & Sponsorship Director
Hudson Sandler Tel: 020 7796 4133