18 Nov 2011 12:55
ARENA LEISURE PLC
INTERIM MANAGEMENT STATEMENT
Arena Leisure Plc ('Arena' or the 'Group'), the UK's leading operator of horseracing fixtures which owns and operates seven racecourses in the UK comprising Doncaster, Royal Windsor, Lingfield Park, Wolverhampton, Folkestone, Southwell and Worcester, today announces its Interim Management Statement for the period from 1 January 2011 to 17 November 2011. Financial data in this announcement relates to the ten month period from 1 January 2011 to 31 October 2011 (the 'period') unless otherwise stated.
Trading Update
During the period, Arena staged 289 fixtures (2010: 285) with the anticipated total number of fixtures for the full year remaining at 353 (2010: 353). Total attendance in the period, across Arena's seven racecourses, was 6% higher at 607,000 (2010: 574,000) and the average attendance of 2,100 was 4% higher (2010: 2,014). The attendance over the four days of the Ladbrokes St Leger festival at Doncaster Racecourse in September was 57,000 (2010: 60,000), the same level as in 2009, with overall spend per head across admission and catering 7% higher. The crowd for the St Leger itself was 27,000 (2010: 30,000). Hospitality business has continued its good progression as we are able to attract new and retain existing customers. Total hospitality attendance in the period increased by 12% to 45,000 (2010: 40,300). Catering profitability continues to improve, aided by increased spend per head.
Income from media rights to Licensed Betting Offices has proved more resilient than in the early part of the year where incomes were impacted by reduced field sizes. In order to encourage additional runners in the remainder of this year we are further supplementing prize money across the winter all-weather programme.
This will be mitigated by increased profit from Arena's share in At The Races ('ATR') as a result of the restructuring of ATR companies which will allow the recognition and future distribution of dividends to Arena at an enhanced rate. ATR's business continues to trade well with growth from both its UK based business and its international media distribution joint venture, GBI Racing.
Development Projects
There have been no material changes in status of the Group's development projects.
Industry Funding
The Levy Board recently announced the basis of the Levy Scheme for 2012/13 with an estimated yield of £72.4m which compares to the estimated yield from the 2011/12 scheme of £71.4m. In a new arrangement, the 2012/13 yield has been substantially guaranteed by the major high street bookmakers and hence there is a reduced exposure to shortfalls in the actual yield, as has often been the case in recent years. The other terms remain similar to the current scheme. The Levy Board expects to set slightly increased distributions for 2012 at £65.1m (2011: £60.1m). The fixture list for 2012 was published this week and Arena's racecourses expect to stage 345 fixtures (2011: 353 scheduled) from a UK racing list of 1,456 fixtures (2011: 1,480), a 24% share (2011: 24%). The exact funding distribution for this fixture list is yet to be announced and we will therefore update the market in due course on any material changes.
Offer Period
On 23 June 2011 the Company entered an offer period following the announcement that it was reviewing possible options to increase value for its shareholders, which included a possible offer for the Company. The Company remains in offer discussions and at this time there can be no certainty that an offer will be made for the Company or as to the terms on which any offer may be made.
Outlook
The last quarter of 2010 is a moderate comparative as a result of the freezing weather and snow and the Group remains on target to meet management's full year expectations. Announcements on the Levy Scheme for 2012/13 have provided more certainty over funding for the coming 12 months and we will update the market on the fixture funding impact in due course.
In 2012, Arena will show good progress in the continued development of our core non-racing income streams. The catering business will deliver its first major external contracts at two Olympic venues and we expect growth from hotel and events incomes. These, combined with media distribution royalties through both ATR and the new agreement with SIS, will ensure that the Group continues to perform well in what we expect will be similarly difficult trading conditions.
18 November 2011
Enquiries:
Arena Leisure Plc Tel: 020 7632 2080
Mark Elliott, Chief Executive
Tony Harris, Finance Director
College Hill Tel: 020 7457 2020
Justine Warren
Matthew Smallwood
Forward-looking statements
This report may contain certain statements about the future outlook for Arena. Although we believe our expectations are based on reasonable assumptions, any statements about future outlook maybe influenced by factors that could cause actual outcomes and results to be materially different.
www.arenaleisureplc.com