ARE.L Regulatory News (ARE)

1 Aug 2007 07:01

Arena Leisure PLC01 August 2007 ARENA LEISURE PLC INTERIM RESULTS FOR SIX MONTHS ENDED 30 JUNE 2007 Arena Leisure Plc ('Arena'), the UK's largest operator of horseracing fixtures,today announces its interim results for the six months ended 30 June 2007. Financial highlights • Turnover of £25.3m (2006: £21.9m). • Profit before tax of £2.3m (2006: £2.2m). • Basic earnings per share of 0.65 pence (2006: 0.60 pence). • Interim dividend of 0.25 pence per share (2006: 0.25 pence per share). • Operating profit before start-up costs from racecourses of £4.0m (2006: £4.0m). • Share of operating loss from At The Races of £0.1m (2006: loss of £0.3m). Operational highlights • Attendances of 226,000 (2006: 216,000). • Corporate customers 21,500 (2006: 19,000). • Number of fixtures staged 177 (2006: 179). • Average attendance per fixture 1,274 (2006: 1,206). • Creation of a new catering operation within Arena to direct, manage and operate all catering activities across its portfolio of racecourses. Development highlights • Doncaster Racecourse on schedule to stage a trial event in August 2007 and to be officially re-opened by HRH the Princess Royal on 12 September 2007, the first day of the Ladbrokes St Leger Festival. • Planning permission granted for a combined 120-bedroom hotel and 34-unit residential development at Doncaster Racecourse. • Planning approval received from Wolverhampton City Council for Wolverhampton Racecourse to expand the current hotel and incorporate a casino to create the UK's first 'racino'. • Wolverhampton City Council recommended to receive a 'small' casino licence by the Casino Advisory Panel. • Reserved matters application (detailed planning permission) submitted for the hotel development at Lingfield Park. Raymond Mould, Arena's Chairman, said today: "The first half of 2007 proved a very challenging operating environment,particularly in terms of the prolonged adverse weather conditions experiencedthroughout May and June, which resulted in profits significantly below ourexpectations. Nevertheless, our average attendance in the first half grew by5.6% which compares favourably to the racing industry as a whole where averageattendance grew by only 1.6%. The weather situation in July was, if anything,worse still. "At this stage, the full year market estimate remains an achievable, if nowsomewhat more difficult, target. Important to this will be the successfulstaging of the Ladbrokes St Leger Festival in September following the re-openingof the redeveloped Doncaster Racecourse by HRH the Princess Royal on 12September 2007. "The Board is delighted that planning permission was received at DoncasterRacecourse for a combined 120-bedroom hotel and 34-unit residential development,the Company's new catering business was successfully launched and, yesterday,the first hurdle in securing planning permission at Wolverhampton Racecourse wasachieved. With developments now in the pipeline at a number of our racecoursesthat will help diversify our income streams, the Board continues to look forwardto the future with confidence. "This confidence is reflected in the declaration of an interim dividend of 0.25pence per share that will be paid on 21 September 2007 to shareholders on theregister at the close of business on 10 August 2007." For further information please contact: Mark Elliott, Chief ExecutiveArena Leisure Plc Tel: 020-7495-2277 e-mail: contact@arenaleisureplc.com Olly Scott / Victoria GeogheganBell Pottinger Corporate & Financial Tel: 020-7861-3232 www.arenaleisureplc.com Chairman's Statement At the operating level, 2007 has proved a very challenging year due, inprincipal, to the adverse weather conditions experienced throughout May andJune. Nevertheless, Arena generated profit before tax of £2.3m (2006: £2.2m) andhas maintained the interim dividend at 0.25 pence per share, in line with ourstated dividend policy. Our development programme continues to progress well, including: • The launch of a new catering operation to service our seven racecourses; • Receipt of planning permission at Doncaster Racecourse for a combined 120-bedroom hotel and 34-unit residential development; • Receipt of planning permission from Wolverhampton City Council for Wolverhampton Racecourse to expand its hotel and incorporate a casino; • The City of Wolverhampton being recommended to receive a 'small' casino licence; • The submission of the reserved matters application (detailed planning permission) for the hotel development at Lingfield Park; and • The redevelopment of Doncaster Racecourse remaining on schedule to stage the Ladbrokes St Leger Festival in September 2007. Financial Turnover in the period was up 15.6% at £25.3m (2006: £21.9m), profit before taxincreased by 6.0% to £2.3m (2006: £2.2m), and earnings per share increased by8.3% to 0.65 pence per share (2006: 0.60 pence per share). The increase in turnover principally arose from the creation of Arena's newcatering business which took over the majority of the Company's food andbeverage contracts in April in order to provide a superior product to ourcustomers and, ultimately, enhanced profits. The full turnover of the cateringactivities is included for the last three months of the period, compared to acommission receipt for both the first three months of 2007 and the whole of2006. This additional turnover amounts to £2.1m. Profit from the racecourses was down by 15.8% at £3.2m (2006: £3.8m), althoughthe 2007 figure in particular includes significant start-up costs. Excludingthese, the adjusted profit of £4.0m was in line with that achieved last year(2006: £4.0m). Arena's central overhead remained unchanged at £1.2m. ATR, whichis 47.5% owned by Arena, performed well at the operating level, although overallArena's share of its after tax loss increased to £0.3m (2006: £0.2m). The start-up costs in the period of around £0.8m (2006: £0.2m) arose principallyfrom the preparation for the re-opening of Doncaster Racecourse, but also thecreation of the new catering operation. During Doncaster's redevelopment, themajority of its fixtures are being staged elsewhere in the Group and will betransferred back once it re-opens. The set-up costs of the catering operationwill result in it contributing around a break-even position in terms ofadditional profits in 2007, following the payment of notional royalties to theracecourses that it serves. In both profit before tax and earnings per shareterms, these start-up costs are offset by a £0.8m interest credit (2006: £nil)arising from a further £4.1m of interest free loans received in connection withDoncaster's redevelopment. The latter contributes to a net interest credit forthe period of £0.7m, compared to a net charge in 2006 of £0.3m. Operating review Attendances in the period rose 4.6% to 226,000 (2006: 216,000). Within this, thenumber of corporate customers rose by 13.2% to 21,500 (2006: 19,000). Theseattendances arose from marginally fewer fixtures at 177 (2006: 179); the smallreduction being caused by a higher level of abandoned fixtures (2007: 6; 2006:3). Average attendance was therefore up 5.6% at 1,274 (2006: 1,206). The attendance figures, whilst higher than last year, fell short of both ourexpectations and where we had positioned the cost base of the business, directlyimpacting profitability. The shortfall is principally due to the impact of theadverse weather experienced in May and June, but also to the well documentedslow down in consumer spending. For the UK racing industry as a whole, totalattendances in the first six months rose by 1.9% and average attendances rose by1.6%, against which Arena's performance compares favourably. Arena's racecourses stage fixtures throughout the year. However, the summerfixtures attract the largest crowds, with June usually accounting for around 30%of attendances and around 42% of attendance related income in the first half ofthe year. The poor weather hit the anticipated attendances across all of ourcourses in these key months and culminated in both Southwell and WorcesterRacecourses disappearing under flood water in late June. At Southwell, our insurance policy provides both compensation for "businessinterruption" and for the buildings and equipment to be repaired and/or replacedwhere necessary. The extent of the damage to the all-weather surface, althoughstill being assessed, is far less than originally feared and it does not look asthough it will need to be replaced. Worcester Racecourse is a summer racing venue. The flooding that occurred inJune, and then again in July, will result in the loss of one fixture in June,five in July and probably two in August, none of which could be transferredelsewhere in the Group, losing Arena around £0.3m. The Racecourse is unlikely tobe usable until September at the earliest. Of the remaining four fixtures inSeptember and October, three are capable of being transferred to other Arenacourses in the event that Worcester remains unraceable. Windsor Racecourse has increased its average attendances by 19.8%, reflectingthe strength and nature of the product provided, although this venue is notimmune to significant shortfalls in attendance on evenings with heavy rainfall. The underperformances of Lingfield Park and Wolverhampton Racecourses this yearare not wholly attributable to the weather. At Wolverhampton, attendances werealso impacted by the slow down in consumer spending. At both, attempts were madeto increase the proportion of advance, on-line customer bookings with a view toincreasing cash flow, ensuring customer attendance and gaining valuablemarketing data. This initiative was encouraged by offering significant pricereductions to on-line bookings and resulted in a great deal of valuable customerinformation that is allowing highly targeted internet-based marketing campaigns,although, in the short term, this may have held back attendance figures. Newticket pricing strategies and new marketing initiatives have been introduced atboth courses to encourage a greater number and frequency of visits. A small scale cost reduction programme has been introduced to reflect thereality of the current situation, but one that recognises the Company's viewthat the shortfall in attendances below our expectations is a relatively shortterm issue. Arena's aim is to deliver consistent profit growth through the provision of aquality product, superior service and the greater utilisation of our assets. Inpursuit of this, our new in-house catering operation took over responsibilityfor the catering activities at six of our racecourses on 1 April 2007, withWorcester Racecourse currently remaining out-sourced. The transfer wassuccessful and a positive impact is already evident. Further improvements areanticipated and this will have the effect of increasing the long termprofitability of our racecourse operations. In addition, the 370-seat grandstandviewing restaurant at Wolverhampton Racecourse was extensively refurbished andre-opened as Horizons in April, having been closed since Christmas. Combinedwith the new catering arrangements, the customer experience has improvedtremendously. The introduction of an integrated ticketing and admission system has commencedand the roll-out of the system will continue during 2007. At The Races ATR continued to make progress in 2007, achieving a 9.0% increase in turnover to£7.3m (2006: £6.7m). As a consequence, Arena's share of ATR's adjusted operatingloss reduced by 67.0% to £0.1m (2006: £0.3m). This growth in turnover occurred across all areas, including sponsorship,advertising and international distribution. The revenue from the reciprocalprovision of racing content between the US and the UK and Ireland has startedmore slowly than was hoped. Nevertheless, this is a long term arrangement andATR is in negotiations to widen both the availability of its product in the USmarket and the customer ability to wager on it. During 2007, the ATR television channel remained the UK and Ireland's mostwatched, dedicated horseracing channel, now with over 1.50m individual viewersper month (2006: 1.45m). Importantly, these customers have been watching forlonger and at more lucrative times. The latter is attributable to ATR's focus onmaximising the number of ad breaks and ensuring their positioning as close torace 'off times' as possible, thereby encouraging viewers to stay through the adbreaks, helping to increase advertising revenues. attheraces.com has also nowgrown to be the UK's largest horseracing website with over 500,000 unique users(2006: 400,000), making it also one of the UK's most visited sports bettingwebsites. Early in 2007 the Court of Appeal found in favour of the BHB with regard to anissue relating to pre-race data and, shortly thereafter, ATR and the BHB agreeda settlement. The resulting cost was largely provided for in ATR's 2006accounts, although a small residual amount has been charged this year. ATR has a strong relationship with the Irish racing industry, having theexclusive rights to broadcast racing from all 27 Irish racecourses through to2009. Earlier this year, and in conjunction with SIS, these rights were securedfor the period 2009 to 2013. This was an important 'win' for ATR, ensuring longterm access to a very important content source and reflecting the strength ofthe ATR proposition to the owners of racing media rights. In the second half, some major seasonal aspects of the business such as RoyalAscot will, as in 2006, be replaced by income from increased sponsorship andcommercial advertising activities. There will also be some significant overheadcost reductions, arising in particular from existing and renegotiatedinfrastructure contracts. As a consequence, ATR should outperform the first halfand it remains on course to generate a small operating profit for 2007 as awhole (2006: loss of £0.3m and 2005: loss of £1.0m). Developments Significant progress has been made in developing Arena's property portfolio toinclude such additional earnings enhancing and complementary activities ashotels, a casino and conference facilities. This will help diversify Arena'sincome streams and make its assets work harder for the long term benefit of itsshareholders. The redevelopment of Doncaster Racecourse is drawing to a close. Although ourcontractor has advised us that the severe adverse weather in the area in Junecaused delays to what was always a very tight schedule, we remain on target tostage a trial event in August and for HRH the Princess Royal to officiallyre-open the Racecourse on 12 September for the start of the Ladbrokes St LegerFestival. Further catering facilities, including a food court and champagne and seafoodrestaurant, have been introduced that were not part of the original developmentprogramme. In addition to the cost of these additional income generatingopportunities, further costs will arise both from items that were initiallypriced as 'provisional sums' in the contract and as a result of time lost due tothe adverse weather. The final amount will not be determined until constructionhas completed, although it is currently estimated at around £34.5m. In March 2007, detailed planning permission was granted for a combined120-bedroom hotel and 34-unit residential development at Doncaster Racecourse.The hotel will operate closely with the Racecourse and help transform it into aworld-class leisure, business and racing venue. At this stage, the originalestimate of the net cost of the combined development following the sale of theresidential properties remains in the region of £11m and the hotel is currentlyscheduled to open in the first quarter of 2009. Last year, Lingfield Park Racecourse received detailed permission for theconversion of a leisure club into residential accommodation and outline planningpermission for significant improvements to the Racecourse itself, including a116-bedroom hotel. In July 2007, a reserved matters application was submittedfor the Racecourse improvements. Extensive consultation has been undertaken andwe are optimistic that the application will be positively received, which shouldallow the development to be completed by the third quarter in 2009. Theestimated net cost of the developments is in the region of £25m. I am delighted that Wolverhampton City Council yesterday resolved to grantplanning permission for our proposed development at Wolverhampton Racecourse.This proposal includes an expansion of the hotel from 54 to 170-bedrooms, theconstruction of a new conference, exhibition and banqueting suite, a new leisurefacility including a swimming pool, and the incorporation of a casino within theRacecourse, thereby creating the UK's first 'racino'. As a result of theRacecourse's Green Belt designation, the application will now be referred to theGovernment Office for the West Midlands ('GOWM'). Acting on behalf of theSecretary of State, GOWM will decide whether to call the application in forconsideration and determination by the Department of Communities and LocalGovernment Minister, or leave the Council to determine the application. It ishoped that GOWM will advise in the next month or two that the Secretary of Statedoes not wish to intervene, and that the Council will be able to issue fullplanning permission shortly thereafter. The estimated cost of the project isaround £23m. In January, the City of Wolverhampton was recommended as a location for a'small' casino by the Casino Advisory Panel. The Panel commented that: "if thecasino happens to end up at the racecourse it would add to its uniqueness andprovide an interesting and unusual social impact test". The Panel'srecommendations require the endorsement of Parliament and this has been delayedby the issues surrounding the 'regional' casino. We are nevertheless reassuredby the Secretary of State for Culture, Media and Sport's written statement inJuly 2007 that: "there was a clear consensus across all parties that the eightlarge and eight small casinos should be awarded to the authorities identified bythe Panel". Wolverhampton City Council has been asked to confirm its continueddesire to license a new casino and we are optimistic that this will beforthcoming and that Parliament will give its approval after the summer recess.Should the City's application be successful, we hope that WolverhamptonRacecourse will be chosen as the best site for the casino. The integrated natureof the proposal, together with the jobs that would be both safeguarded andindeed created, would make a casino at Wolverhampton Racecourse a very excitingaddition to the City. During the period, we have also continued to review our development options atboth Windsor and Folkestone Racecourses. Employees The Company's employees have worked extremely hard in challenging circumstances.I am grateful to them all for the dedication they have shown and I know that Ican rely on this remaining the case as the business continues to progress. Auditors KPMG Audit plc will take over as auditor to the Arena Group. I would like tothank BDO Stoy Hayward for the service they have provided to the Company and itsshareholders. Dividend In accordance with our stated dividend policy, we have declared an interimdividend of 0.25 pence per share (2006: 0.25 pence per share) that will be paidon 21 September 2007 to shareholders on the register at the close of business on10 August 2007. Outlook Where we have raced in July and the weather has been favourable, attendanceshave continued to show a like-for-like increase on last year. However,attendances remain affected by the continuing heavy rainfall which has alsoalready caused a further eight abandoned fixtures in the second half (2006:nil), principally arising from flooding at Worcester, although one weekendfixture was lost at Windsor. Measures have been taken to reduce our cost baseand increase the focus on sales and marketing activities. At this stage, thefull year market estimate remains an achievable, if now somewhat more difficult,target. Important to achieving this will be the successful staging of theLadbrokes St Leger Festival in September following the re-opening of theredeveloped Doncaster Racecourse by HRH the Princess Royal on 12 September 2007. The long term position of the Company is very positive and the Board isconvinced that the Company's strategy remains robust. The Board is delightedthat the first hurdle in securing planning permission at WolverhamptonRacecourse has been achieved and, with developments now in the pipeline at anumber of our racecourses that will help diversify our income streams, continuesto look forward to the future with confidence. Raymond MouldChairman 1 August 2007 Consolidated Income Statement Six months Six months Year ended ended ended 30 June 2007 30 June 2006 31 December 2006 Unaudited Unaudited Audited £'000 £'000 £'000 Turnover 25,320 21,912 45,259Cost of sales (18,092) (14,966) (30,033) ---------- --------- ----------Gross profit 7,228 6,946 15,226Other operating income - - 133Administrative costs (5,275) (4,300) (9,031) ---------- --------- ----------Profit from operations 1,953 2,646 6,328Share of post tax results ofjoint venture (338) (218) (812)Reversal of provision againstinvestment in associate - - 100 ---------- --------- ----------Profit before interest andtaxation 1,615 2,428 5,616 ---------- --------- ----------Finance expense (288) (368) (848)Finance income 148 106 353Other finance gain 822 - 696 ---------- --------- ----------Net finance income/(expense) 682 (262) 201 ---------- --------- ----------Profit before taxation 2,297 2,166 5,817Taxation - - - ---------- --------- ----------Profit for the year 2,297 2,166 5,817 ---------- --------- ---------- Attributable to:Minority interest (52) (12) (33)Equity shareholders of theparent company 2,349 2,178 5,850 ---------- --------- ---------- 2,297 2,166 5,817 ---------- --------- ---------- Earnings per share: Continuing operations Pence Pence Pence ---------- --------- ----------Basic earnings per share 0.65 0.60 1.61Diluted earnings per share 0.64 0.60 1.60 Dividend per ordinary shareProposed for the period 0.25 0.25 0.51 Consolidated Balance Sheet At At At 30 June 30 June 31 December 2007 2006 2006 Unaudited Unaudited Audited £'000 £'000 £'000 Non-current assetsProperty, plant and equipment 102,806 76,001 86,054Intangible assets 5,596 5,596 5,596 --------- --------- ---------Investment in joint venture (3,936) (3,004) (3,598)Goodwill in respect of joint venture 1,580 1,580 1,580Loans to joint venture 5,055 3,639 3,976 --------- --------- --------- 2,699 2,215 1,958Investment in associate - - 100 --------- --------- ---------Total non-current assets 111,101 83,812 93,708 --------- --------- --------- Current assetsInventories 226 34 17Trade and other receivables 9,544 5,994 6,454Other financial assets - - 58Cash and cash equivalents 161 - 50 --------- --------- ---------Total current assets 9,931 6,028 6,579 --------- --------- --------- Total assets 121,032 89,840 100,287 --------- --------- --------- Current liabilitiesBank overdraft (2,248) (1,872) (2,920)Trade and other payables (16,968) (9,941) (11,664)Other financial liabilities (136) (315) (135)Corporation tax liability - - - --------- --------- ---------Total current liabilities (19,352) (12,128) (14,719) --------- --------- --------- Non-current liabilitiesFinancial liabilities (33,053) (13,423) (18,641)Accruals and deferred income (2,957) (2,780) (2,655) --------- --------- ---------Total non-current liabilities (36,010) (16,203) (21,296) --------- --------- --------- Total liabilities (55,362) (28,331) (36,015) --------- --------- --------- Total net assets 65,670 61,509 64,272 --------- --------- --------- EquityShare capital 18,210 18,210 18,210Share premium 223 223 223Merger reserve 5,417 5,417 5,417Retained earnings 41,905 37,671 40,455 --------- --------- --------- Equity attributable to shareholders of theparent company 65,755 61,521 64,305Minority interest (85) (12) (33) --------- --------- ---------Total equity 65,670 61,509 64,272 --------- --------- --------- Consolidated Cash Flow Statement Six months Six months Year ended ended ended 30 June 2007 30 June 2006 31 December 2006 Unaudited Unaudited Audited £'000 £'000 £'000Operating activitiesProfit for the period 2,297 2,166 5,817Adjustments for:Depreciation 1,177 972 2,051Share-based payment expense 48 11 34Net interest (income)/expense (682) 262 (201)Share of loss of jointventure 338 218 812Reversal of provision againstinvestment in associate -Trackplay LLC - - (100)Profit on sale of property,plant and equipment (12) (3) (14)Grant amortisation 20 (27) (53) --------- --------- ---------Operating profit beforechanges in working capitaland provisions 3,186 3,599 8,346 Increase in trade and otherreceivables (3,032) (1,209) (1,165)(Increase)/decrease ininventories (209) (15) 2Increase/(decrease) in tradeand other payables 2,980 573 (1,463) --------- --------- ---------Cash flows from operatingactivities 2,925 2,948 5,720 Investing activitiesPurchases of property, plantand equipment (15,640) (6,393) (14,505)Sales of property, plant andequipment 28 38 144Loans to joint venture (1,079) (355) (692)Sale of investment inassociate - Trackplay LLC 100 - -Interest received 148 - 353 --------- --------- --------- (16,443) (6,710) (14,700)Finance activitiesIssue of ordinary shares - 287 287Net proceeds from bank andother borrowings 15,621 5,791 11,812Repayment of loans (85) - (302)Repayment of finance leasecreditors - - (2)Interest paid (288) (262) (848)Dividends paid (947) (728) (1,639) --------- --------- --------- 14,301 5,088 9,308 --------- --------- --------- Increase in cash and cashequivalents 783 1,326 328 Cash and cash equivalents at1 January (2,870) (3,198) (3,198) --------- --------- ---------Cash and cash equivalents atperiod end (2,087) (1,872) (2,870) --------- --------- --------- Notes to the Accounts 1 Basis of preparation This interim financial information has been prepared applying the accountingpolicies and presentation that were applied in the preparation of the Company'spublished consolidated financial statements for the year ended 31 December 2006. The comparative figures for the financial year ended 31 December 2006 are notthe Company's statutory accounts for that financial year. Those accounts havebeen reported on by the Company's auditors and delivered to the registrar ofcompanies. The report of the auditors was (i) unqualified, (ii) did not includea reference to any matters to which the auditors drew attention by way ofemphasis without qualifying their report, and (iii) did not contain a statementunder section 237 (2) or (3) of the Companies Act 1985. 2 Taxation The tax charge for the period is nil due to the utilisation of Horserace BettingLevy Board capital credits which are not assessable to tax. 3 Earnings per share Basic earnings per share have been calculated using the weighted average numberof shares in issue during the periods. The weighted average number of share inissue for the six months to 30 June 2007 is 364,202,007 (six months to 30 June2006: 364,048,748 and the year to 31 December 2006: 364,126,007). Thecalculation of diluted earnings per share is calculated using the weightedaverage number of shares in issue, adjusted for the number of outstanding shareoptions capable of being exercised. 4 Segmental information Six months Six months Year ended ended ended 30 June 2007 30 June 2006 31 December 2006 Unaudited Unaudited Audited £'000 £'000 £'000 --------- --------- ---------- Turnover Racecourse operations 25,320 21,912 45,259 --------- --------- ---------- Profit before interest and taxation Racecourse operations 3,171 3,845 8,701 Central costs (1,218) (1,199) (2,506) Other operating income - - 133 --------- --------- ---------- Share of At The Races operating loss (89) (269) (269) Share of exceptional legal (costs)/credit (84) 110 (434) Share of At The Races interest costs (129) (59) (158) Share of At The Races tax (charge)/credit (36) - 49 --------- --------- ---------- Share of At The Races results after tax (338) (218) (812) Reversal of provision against investment in associate - Trackplay LLC - - 100 --------- --------- ---------- 1,615 2,428 5,616 --------- --------- ---------- 5 Reconciliation of movements in equity Share Share premium Other Profit and loss Capital account reserves account £'000 £'000 £'000 £'000 At 1 January 2006 18,100 46 5,417 36,210 Profit for six months to 30 June 2006 - - - 2,166 Dividend - - - (728) Share-based payment expense - - - 11 Minority interest - - - 12 Issue of ordinary shares 110 177 - - ------- ------- ------- ------- At 30 June 2006 18,210 223 5,417 37,671 Profit for six months to 31 December 2006 - - - 3,651 Dividend - - - (911) Share-based payment expense - - - 23 Minority interest - - - 21 ------- ------- ------- ------- At 31 December 2006 18,210 223 5,417 40,455 Profit for six months to 30 June 2007 - - - 2,297 Dividend - - - (947) Share-based payment expense - - - 48 Minority interest - - - 52 ------- ------- ------- ------- At 30 June 2007 18,210 223 5,417 41,905 ------- ------- ------- ------- 6 Statement of net debt At At At 30 June 30 June 31 December 2007 2006 2006 Unaudited Unaudited Audited £'000 £'000 £'000 Cash and cash equivalents 161 - 50 Bank overdraft (2,248) (1,872) (2,920) ------- ------- -------- Net cash and cash equivalents at end of period (2,087) (1,872) (2,870) Bank loans (26,291) (12,791) (14,750) HBLB loans (6,898) (644) (3,725) Finance lease - Worcester (301) (303) (301) ------- ------- -------- Net debt at end of period (35,577) (15,610) (21,646) ------- ------- -------- 7 Dividends Six months Six months Year ended ended ended 30 June 2007 30 June 2006 31 December 2006 Unaudited Unaudited Audited £'000 £'000 £'000 Dividend declared in respect of the period 911 911 1,858 -------- -------- -------- The proposed interim dividend of 0.25 pence per ordinary share in respect of thesix months ending 30 June 2007 was approved by the Board on 31 July 2007 and inaccordance with IFRS has not been included as a liability at 30 June 2007. 8 Trackplay LLC In December 2006, an agreement was reached for the sale of the Company's 30%share of Trackplay LLC which valued the investment at £100,000. This valuationwas adopted by the Board at 31 December 2006. The sale was completed in March2007. 9 Flooding at Southwell and Worcester Racecourses The flooding at Southwell Racecourse in recent weeks has caused significantdamage to some of the assets at the track. The Group is in the process ofassessing the state of all assets at the site and it is likely that animpairment charge will arise in the second half of the year, although at thisstage it is not possible to quantify the potential charge. However theDirectors consider that any write-down in the carrying value of assets will becovered by the Group's insurance arrangements. There has been no material flood damage to the assets at Worcester Racecourse. This information is provided by RNS The company news service from the London Stock Exchange