ARE.L Regulatory News (ARE)

29 Jun 2007 07:01

Arena Leisure PLC29 June 2007 Arena Leisure Plc ('Arena' or 'the Company' or 'the Group') Trading update The Company intends to report its interim results for the period ending 30 June2007 on 1 August 2007 and provides the following trading update ahead of thatannouncement. At the Company's AGM on 30 April 2007, shareholders were informed thatattendances in the first four months of 2007 had been softer than anticipated.As the end of June approaches, it has become clear that attendances atWolverhampton and Lingfield Park Racecourses in particular have not improvedand, as a result, projected revenues for the Group will not meet targets. Theshortfall has principally been in public attendance rather than the corporatemarketplace where bookings are running ahead of last year. The Company believes that the shortfall principally arises from a combination oftwo factors: • The exceptional and protracted bad weather experienced since the end of April, culminating in two of the Group's racecourses - Southwell and Worcester - currently being completely under water; and• A slowdown in certain sections of consumer spending following recent interest rate rises. Although measures are being taken to boost attendances in the second half of theyear, the Company does not expect the lost revenue to be recouped and, as aresult, anticipates profit before interest and tax for the year ended 31December 2007 to be in the region of £6 million - an increase of around 6.5%compared to 2006 - but not as high as current market expectations. While the Company cannot control the British weather, it has taken steps toaddress ticket pricing and the slowdown in certain sections of consumerspending. New ticket pricing strategies and new marketing initiatives have beenintroduced at Lingfield Park and Wolverhampton to encourage the number andfrequency of both race-day and non-race-day customers. A small scale costreduction programme is also being introduced. The Company believes that the attendance shortfall is a short term issue. It isalso not particular to these two Arena courses as recent racing industrystatistics reveal that a number of competing courses are reporting similarreduced foot-fall. However, overall attendances within the racing industry forthe first five months of this year appear to be on a par with those in 2006 andWindsor Racecourse is enjoying increased average attendances, reflecting thestrength and nature of the product provided there. The Doncaster Racecourse redevelopment remains on schedule and the Company looksforward to staging the four-day St Leger Festival this September. Sales to datehave been very encouraging and in line with expectations. Planning permissionfor the combined 120-bedroom hotel and 34-unit residential development onDoncaster Racecourse was received earlier this year. The Company's new catering division has launched successfully and we lookforward to long term growth in our catering profits. The refurbished 370-seatHorizons restaurant at Wolverhampton Racecourse is performing well, despite thereduced overall attendances at the racecourse. A decision from Wolverhampton City Council on the detailed planning applicationsubmitted earlier this year for a significant expansion of facilities atWolverhampton Racecourse to include an enlarged hotel (incorporating 170bedrooms), a 'racino' (a destination casino at a racecourse), and additionalhorseracing and conference facilities is anticipated at the end of July 2007. Arena's Chief Executive Mark Elliott said: "As we reach the end of June, it is clear that the appalling weather conditionsthat have been experienced throughout most of May and June have not onlydepressed recent attendances, but also removed the opportunity to recover someof the shortfalls experienced in the early part of the year in what istraditionally one of our busiest periods. Worcester is currently flooded andboth our turf and all-weather tracks at Southwell Racecourse are flooded for thefirst time in their history. In addition, it would appear that the interest raterises that have occurred over the last 10-months, with the potential for more inthe near future, have caused a tightening in certain sections of consumerspending. "We take comfort from the performance of Windsor Racecourse, the sales achievedto date for the redeveloped Doncaster Racecourse and the recent figures showinga steady overall attendance year-on-year at UK racecourses. We regard the recentdip in attendance as a short term issue. "The Board remains convinced that the Company's strategy remains robust in thisenvironment. By developing our property portfolio to include such additionalearnings enhancing and complementary activities as hotels, a casino andconference facilities, we are diversifying our income streams and making theCompany's assets work harder for the long term benefit of our shareholders." There will be an analyst conference call at 9.30am. For dial-in details, please call Bell Pottinger Corporate & Financial. - Ends - For further information please contact: Arena Leisure PlcMark Elliott, Chief Executive 020 7495 2277contact@arenaleisureplc.com Bell Pottinger Corporate & FinancialDavid Rydell / Olly Scott 020 7861 3232 This information is provided by RNS The company news service from the London Stock Exchange