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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Newbury Racecourse plc | AQSE:NYR | Aquis Stock Exchange | Ordinary Share | GB0002910429 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 520.00 | 490.00 | 540.00 | 520.00 | 515.00 | 520.00 | 0.00 | 15:29:37 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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TIDMNYR
The information contained within this announcement is deemed by the Group to
constitute inside information as stipulated under the Regulation 11 of the
Market Abuse (Amendment) (EU Exit) Regulations 2019/310 ("MAR"). With the
publication of this announcement via a Regulatory Information Service, this
inside information is now considered to be in the public domain.
5th May 2022
NEWBURY RACECOURSE PLC
(the "Racecourse" or the "Company")
Preliminary results for the 12 months ended 31 December 2021
Newbury Racecourse plc, the racing, entertainment and events business, today
announces its preliminary results for the twelve months ended 31 December 2021.
2021 Financial and Business Summary
· Turnover increased by 75% to £14.83m (2020: £8.49m).
· Profit before interest, tax and exceptional items of £0.04m (2020: Loss
of £2.38m)
· Consolidated group profit on ordinary activities before tax of £0.18m
(2020: Loss of £2.27m).
· Consolidated group loss on ordinary activities after tax of £0.88m
(2020: Loss of £2.04m) due to a deferred tax charge in the year relating to the
increase in the corporation tax rate to 25% from April 2023.
· Raceday attendances of 105,000 (2020: 12,000). Twenty-nine meetings
(nineteen with a paying attendance) compared with twenty (four with paying
attendance) in 2020.
· In 2021 the Company continued to be severely impacted by the COVID-19
pandemic alongside the decision by the UK Government to implement national
lockdowns which subsequently placed restrictions on the Racecourse's ability to
operate normally.
· The Company operated all its 2021 racing fixtures, with, for the period
between January and May, the only income coming from betting and media rights
agreements. The nursery traded as normal, the conference & events business
re-opened in July, but the hotel remained closed throughout 2021.
· In June 2021, the Company announced a catering agreement with Levy
Restaurants (a division of Compass Group) to provide all raceday, events,
hotel, and nursery catering. The Board is confident that this relationship,
which became effective from 1 June 2021, will provide the Racecourse with
access to innovative technology solutions, new restaurant, bar and food outlet
concepts and improved commercial benefits which the Company has already begun
to see in the subsequent period of trading.
· On 7 July 2021, the Company announced that it had signed an all media
rights agreement with Arena Leisure Racing Ltd & At The Races Ltd (Sky Sports
Racing) to replace the existing contract with Racecourse Media Group Ltd. The
existing media rights agreement expires in respect of Betting Office retail
rights on 31 March 2023 and in respect of all other media rights on 31 December
2023. The new agreement is anticipated to provide the Racecourse with both
financial and strategic benefits and will run until the end of 2028.
2022 Update
· The UK Government's lifting of all legal restrictions on public life
meant that the Company was able to forward plan accordingly. With paying
attendance with unlimited crowds having been permitted since July 2021, the
raceday hospitality business has reopened and the nursery remains fully open to
all children. The hotel re-opened to paying guests on 6th January 2022, having
been closed for almost 22 months.
· The Company has completed a review of its Conference & Events business
and decided to withdraw from pro-actively marketing within this sector for the
foreseeable future, until it is satisfied that the market is in a suitable
position to re-commence activities.
· On 1st March 2022 the Company received £10.7m from David Wilson Homes
which was the final contractual payment due to the Company in relation to the
purchase of land for the racecourse residential development. This has enabled
the Company to fully pay down the NatWest Bank loan and settle the final
payment of the Compton Beauchamp Estates Loan. The Company is now debt free.
Dividend and Prize Money
· Following receipt of the final £10.7m from David Wilson Homes, the
settling of the Company's loan debt and the future minimum guaranteed income
expected from the media rights agreement, the Company is now in a position to
provide an update on returning capital to shareholders.
· The Company is today declaring a special interim dividend, payable to
all shareholders, of 89.6 pence per share. The special interim dividend will be
paid on 7 June 2022 to shareholders on the register at the close of business on
13 May 2022. The special interim dividend totals £3m.
· Subject to future financial performance, the Company intends to declare
an annual dividend funded from trading activities from the 2023 trading year
onwards, with the dividend per share being declared annually alongside the
Company's preliminary results announcement.
· The anticipated increase in guaranteed income from the media rights
agreement will enable the Company to substantially increase its commitment to
prize money from 2023 onwards. Subject to normal trading conditions continuing
and the Government review of the Gambling Act not materially impacting betting
turnover on the Company's racing, the Board will be committing to a minimum of
40% of its total media rights income being invested into prize money. This will
then be reviewed three years from now.
Dominic Burke, Chairman of Newbury Racecourse plc commented:
"Following the challenges presented since March 2020, I am delighted that both
the horseracing industry and our business has finally returned to normal
activity. In the early part of 2021, we were only able to generate income
during the behind closed doors meetings through our media and betting rights
agreements and lost the significant benefit of being able to generate key
revenues through catering and hospitality. However, since Government
restrictions were lifted in July, we have been able to host an unrestricted
paying attendance at our racedays, which included two Party In The Paddock
concerts in August and September featuring Olly Murs and Rick Astley
respectively. Attendances were also encouraging in the latter part of the year
with the Ladbrokes Winter Carnival crowds in line with 2019. We were able to
keep our Nursery business open throughout the year, but the Hotel only
re-opened in January 2022. We have, however, made the decision to cease
pro-actively marketing our Conference & Events business until we have
confidence in the market.
Despite this positive development, the impact of the financial operating losses
from 2020 and the first half of 2021 were substantial and has set the business
back from its original strategic investment plan, so we have needed to adapt
the business accordingly. The fact that we are able to report a pre-tax profit
for the year is of significant importance.
During 2021 we signed two major strategic agreements, with Levy Restaurants
becoming our Catering partner with effect from 1 June 2021 and all our media
rights transferring to Arena Leisure Racing (Sky Sports Racing) in two separate
stages starting with Betting Office retail rights from 1 April 2023 followed by
all other rights from 1 January 2024. Both of these arrangements are expected
to improve the financial performance of the Company.
As expected, we have also received the final payment due from David Wilson
Homes which has enabled the business to settle all outstanding loans and be
free of debt. On this basis I am pleased that we are able to satisfy the
commitment that we made in 2012 to return some capital to shareholders. The
Board has agreed to make a £3m special interim dividend distribution on 7 June,
the day before the AGM. Following this, we anticipate being in a position to
pay an annual dividend, subject to financial performance, from the trading year
2023 onwards. Finally, from 2023, when our new media rights arrangements come
into effect, we will be significantly increasing our investment into prize
money and will be committing to invest a minimum of 40% of total media rights
income into prize money. This will then be reviewed three years from now.
Our sincere thanks, as ever, to all sponsors, owners, trainers, stable staff,
members, racegoers and all customers for their ongoing support."
For further information please contact:
Newbury Racecourse
plc Tel:
01635 40015
Julian Thick, Chief Executive
Harriet Collins, Marcomms & Sponsorship Director
Allenby Capital
Limited
Tel: 0203 328 5656
Nick Naylor/Liz Kirchner (Corporate Finance)
Hudson Sandler
Tel: 0207 796 4133
Charlie Jack
CHAIRMAN'S STATEMENT
Year ended 31 December 2021
Introduction
Following the challenges presented since March 2020 I am delighted that both
the horseracing industry and our business has finally returned to normal
activity. In the early part of 2021, we were only able to generate income
during the behind closed doors meetings through our media and betting rights
agreements and lost the significant benefit of being able to generate key
revenues through attendance, catering and hospitality. However, since all
Government restrictions were lifted in July 2021, we have been able to host an
unrestricted paying attendance at our racedays, which included two Party In The
Paddock concerts in August and September featuring Olly Murs and Rick Astley
respectively. Attendances were also encouraging in the latter part of the year
with the Ladbrokes Winter Carnival crowds in line with where they were in 2019.
We were able to keep our nursery business open throughout the year, but the
hotel only re-opened in January 2022. We have also made the decision to cease
pro-actively marketing our Conference & Events business until we have
confidence in the market.
We set ourselves ambitious targets and a clear strategy to drive further growth
in our business, but the impact of the pandemic resulted in a significant
financial loss in 2020 and, despite returning to profit (before tax) in 2021,
the effects of lockdowns and restrictions has set the business back from its
original strategic investment plan. I am confident that the difficult decisions
and actions taken during 2020 meant that ultimately, we were well placed to
resume full trading activities in 2021 once circumstances permitted in July.
The major investment we have made into our racecourse facilities and
infrastructure over recent years was to position Newbury Racecourse for the
future, in line with our strategic objective to be a modern and leading
racecourse, entertainment and events business. This ambition remains unchanged.
2021 Financial Performance
Statutory turnover grew by 75% to £14.83m in 2021 (2020: £8.49m). We were able
to host 29 fixtures during the year, compared with 20 in 2020. 10 of these were
held with no paying public so we were particularly grateful for our Media and
Betting Rights to provide much needed income for these days, whilst Licensed
Betting Shops were also closed. Once all Government restrictions were lifted in
July the business was once again able to benefit from paying customers,
especially benefitting our two Party In The Paddock events and the Ladbrokes
Winter Carnival, as well as the commercial upside generated from our catering
arrangement with Levy. The nursery business remained open throughout the
majority of the year and generated turnover of £1.56m (2020: £1.22m). The Lodge
Hotel generated nominal income in 2021 compared with £0.13m in 2020. Due to the
change of model following the implementation of the catering arrangement, the
statutory income will reduce as we will only report our share of the profit as
a royalty.
Following the difficult decision to implement a staffing re-structure in 2020
and reduce permanent headcount by 30 employees we were able to manage the fixed
overhead against the reduced revenue in 2021. The Company made limited use of
the Government Coronavirus Job Retention Scheme, accepted the Business Rates
discount but made no other use of any direct Government support package.
The operating profit in the year was £0.20m (2020: loss of £2.29m), which was
net of exceptional gain items of £0.15m (2020: gain of £0.09m). Loss after tax
was £0.88m (2020: Loss of £2.04m). The company incurred a deferred tax charge
in the year of £1.06m largely due to the change in the corporation tax rate to
25% from April 2023.
2021 Racing Highlights
The 2021 racing programme returned to its normal calendar following the
disruption in 2020, and despite no crowds in attendance until 10th June we
still welcomed over 105,000 racegoers to the racecourse.
The action on the track was once again thrilling and of a very high quality,
demonstrating our continued ability to attract the very best horses across both
codes. Highlights early in the year included wins in the Betfair Hurdle for
Soaring Glory and for Secret Investor in the Denman Chase.
The flat season got underway with Dubai Duty Free Spring Trials Weekend
providing victories for Al Aasy, Chindit and Alcohol Free, who underlined that
Fred Darling Stakes win with subsequent success in the Coronation Stakes and
Sussex Stakes. Following its cancellation in 2020, the Al Shaqab Lockinge
returned in May and saw Palace Pier beat Lady Bowthorpe to the finish and
secure Frankie Dettori's fifth win in our early summer showpiece, now only one
win behind Lester Piggott's record.
Our first Party in the Paddock event at the racecourse in almost two years took
place in August at the BetVictor Hungerford meeting, with a crowd of over
16,000 enjoying Olly Murs who performed after an excellent day's racing, which
saw Sacred win the day's feature race. Our second Party in the Paddock in
September saw the timeless Rick Astley perform some 80's classics at the Dubai
Duty Free International Saturday where Wings of War was victorious in the Mill
Reef Stakes.
As we turned to the jumps once more, Cloudy Glen's win in the Ladbrokes Trophy
in late November, gave an emotional win for the Trevor Hemming's estate
following Cloth Cap's win a year earlier and Trevor's sad passing in between.
The Development
The redevelopment since 2012 has delivered Newbury with a first-class venue so
that we can continue to host racing of the highest quality, as well as having
facilities which are well placed to meet the increasing demands of the modern
day consumer, from horsemen and racegoers, to hotel guests, nursery patrons and
local residents. We strongly believe that the redevelopment will enable us to
continue to grow our already well diversified business activities and maximise
the returns from our investment.
The David Wilson Homes ('DWH') residential development continued throughout
2021 after a short pause during 2020 and is now into its final phase. The
Central Area apartments are fully completed and sold, with the Company now
owning the freeholds of thirteen apartment blocks. DWH is continuing with
construction in the Eastern Area of the site due for completion in 2026.
Approximately 1,000 homes out of the planned total of c.1,500 are now built.
The final receipt for the balance of the guaranteed minimum land value of £
10.7m due from DWH, under the 2012 development agreement, was received in March
2022.
Financing and Liquidity
During the first half of 2021 we repaid £1.5m of the previously fully drawn
revolving credit facility to National Westminster Bank plc ("NWB") as a result
of our improved cash position and outlook given the easing of restrictions at
that time on the business.
Subsequently the final payment received from David Wilson Homes in March 2022
has enabled the business to settle the outstanding £4.5m balance on the NWB
loan as well as make the final £2.7m repayment of the Compton Beauchamp Estates
Loan, meaning the Company is debt-free at the time of writing.
Outlook
During 2021 the Company signed two major strategic agreements. Firstly, Levy
(part of Compass Group UK & Ireland) became our Catering partner which took
effect from 1 June 2021. We have seen some encouraging initial benefits of this
partnership so look forward to working with them for the next ten years and
developing this important segment of our operation. Secondly, all our media
rights will transfer to Sky/Arena Leisure Racing in two separate stages
starting with Betting Shop retail rights moving on 1 April 2023, and all other
rights moving to new arrangements from 1 January 2024. This will see all our
racing broadcast on Sky Sports Racing TV as well as a number of days on ITV
which we are very excited about. This new media rights contract will give
improved exposure to our racing and is backed by minimum guarantees that give
us great confidence about the future of this important revenue stream. As a
result, I am pleased to announce that, subject to normal trading conditions
continuing and the Government review of the Gambling Act not materially
impacting betting related turnover on our racing, the Company will be
substantially increasing its commitment to prize money and will commit to a
minimum of 40% of our total media rights income being directly invested into
prize money from 2023 onwards, which will then be reviewed three years from
now.
We have also secured two additional BHA fixtures for 2022 meaning we will run a
total of 31 racedays during the year (19 Flat and 12 National Hunt).
Dividends
Given the completion of the David Wilson Homes transaction I am pleased that we
are able to satisfy the commitment made in 2012, and in subsequent
announcements, to return capital to shareholders. The Board has agreed to make
a £3m special interim dividend distribution in June prior to the AGM.
From the 2023 trading year onwards, it is anticipated that the Company will
re-commence paying an annual dividend, subject to financial performance and
once the full benefit of the new media rights agreement takes effect.
On behalf of the Board, I would like to thank all the staff for their continued
hard work, resolve and commitment to the business during the extraordinary and
challenging past two year period.
Our sincere thanks, as ever, to all sponsors, members, customers, owners and
all those connected to the racing industry for their ongoing support.
DOMINIC J BURKE
Chairman
4 May 2022
STRATEGIC REPORT
Year ended 31 December 2021
STRATEGY AND OBJECTIVES
The Board's strategy is for Newbury Racecourse plc to provide a profitable and
diversified business for the benefit of all stakeholders. This will be
delivered through first class facilities including a modern market-leading
racecourse, hotel, children's nursery, hospitality, and events businesses.
Where commercially viable these will be supported by further innovative
activities. One of the key aims of this Strategic Report is to set out and
appraise the business model through which we deliver that strategy.
THE BUSINESS MODEL
Newbury Racecourse PLC is the parent of a Group of companies which own Newbury
Racecourse and engages in racing, hospitality and associated food and beverage
retail activities. In addition, the Group operates a conference and events
business, a children's nursery, and an on-site hotel. Alongside its trading
activities, the Group also owns freehold property from which it receives annual
income and until March 2022 benefitted from the sale of residential properties
on the site, as part of its long-term development agreement with David Wilson
Homes.
PERFORMANCE REVIEW
Due to the UK Government's restrictions affecting our ability to operate as
normal since spring 2020, the business remains substantially behind 2019
levels. However, in 2021 we delivered a 75% year-on-year increase in group
turnover to £14.83m (2020: £8.49m), which also demonstrates the significant
impact that the initial lockdown had during the early part of 2020 once all
trading was ceased by the Government on 17th March 2020.
Revenues across all our businesses were higher than 2020 but that in no way
represents a positive position for the business compared with expectations
under normal circumstances. Racing with a paying crowd resumed on 10 June 2021,
which along with Licenced Betting Shops fully re-opening, resulted in racing
revenue being up 81% on 2020. Our Conference & Events business re-opened on 12
April 2021 with income up 45% and the nursery has seen a 28% increase in
income, both against substantially lower prior year figures than normal trading
delivers.
As a result of these revenue improvements, the Company is reporting a return to
profit before tax in 2021 with operating profits before exceptional items of £
0.04m (2020: loss of £2.38m).
Exceptional items in 2021 were a credit of £0.15m (2020: credit of £0.09m)
being the fair value movement on the David Wilson Homes debtor, based upon the
expected timing and value of future receipts.
The loss after tax was £0.88m (2020: loss £2.04m).
Racing
The accounts include a total of 29 days racing (2020: 20). Of these, 19 were
held with a paying crowd in attendance, albeit some with varying levels of
public restrictions in place and with the remainder Behind Closed Doors
("BCD"). This compared to 4 with a paying attendance in 2020.
Overall raceday attendances in 2021 were 105,000 (2020: 12,000).
Total media related revenues of £4.38m, were up 52% compared with 2020, as a
direct consequence of the higher number of racedays being hosted and the effect
of Licensed Betting Offices phased re-opening. In the year this accounted for
33% of our total trading revenue compared with 41% in 2020, when 16 fixtures
were held with no paying attendance.
Newbury's richest race meeting, the Al Shaqab Lockinge Day, was able to return
in 2021, having been cancelled in 2020 following the implementation of an
emergency racing programme by the BHA. This meeting continues to be the
flagship event in our flat racing calendar, with Al Shaqab confirming their
continued generous support of this race following a five-year extension to
their sponsorship announced during 2019.
Despite the difficult trading conditions and restrictions in place impacting
our ability to race with full public attendance, our total prizemoney in 2021
was £4.71m (2020: £2.72m). We were able to make an Executive Contribution to
prizemoney of £1.51m (2020: £0.54m) and are grateful for the ongoing support of
all our sponsors, with particular thanks to Al Shaqab Racing, bet365, Betfair,
BetVictor, Dubai Duty Free and Ladbrokes for their commitment in 2021.
Catering, Hospitality and Conference & Events
2021 saw the re-opening of the C&E business in April following almost a year of
enforced closure. Consequently, revenues were £0.26m compared with £0.18m in
2020, resulting in an operating Gross Operating Profit of £0.15m (2020: loss £
0.16m).
Our Catering business transferred to an outsourced arrangement with Levy
Restaurants on 1 June 2021 which will result in the Company receiving income
from the shared arrangement rather than reporting the full income and costs. We
have been encouraged by trading since that date which has been in line with
expectations. Prior to June there was minimal trading whilst the business
remained closed, although we continued with the outdoor pop-up Pub concept that
we introduced in 2020 in order to generate income within restriction
guidelines.
The Rocking Horse Nursery
The Rocking Horse Nursery traded at normal levels throughout 2021, returning to
those experienced in 2019. Revenues for 2021 were £1.56m, up 28% against 2020.
This business unit reported an operating profit of £0.53m (2020: £0.45m).
The Lodge
Our 36-bedroom onsite hotel remained closed to the public throughout 2021
having initially ceased trading in March 2020. Previously the hotel had
delivered good levels of growth through to 2019 since opening to the general
public. The Lodge has an important role at the racecourse and will continue to
fulfil the key raceday requirements of providing accommodation to travelling
stable staff, in addition to supporting other local businesses and travellers.
This facility reopened in January 2022.
The Redevelopment
David Wilson Homes were still able to continue with the residential development
during the year with the Central Area apartments now fully completed and sold
and with construction continuing in the Eastern Area. Approximately 1,000 homes
out of the total c.1,500 are now built and sold with a further 80 currently
under construction. Cash receipts from DWH from the sale of properties in 2021
were £0.17m (2020: £0.10m). The final balance of the guaranteed minimum land
value to be paid by DWH has been received in March 2022 - as at 31 December
2021 the recognised balance outstanding was £10.7m, which is the amount
received.
FINANCIAL COMMENTARY
Consolidated Group profit before tax in the year ended 31 December 2021 was £
0.18m (2020: Loss of £2.27m) which includes £0.15m of exceptional profit (2020:
£0.09m).
Total statutory turnover in 2021 was £14.83m (2020: £8.49m). Overall racing
revenues increased to £12.48m compared with 2020 (£6.89m). Overall media and
betting rights revenues (included in overall racing income) were £4.38m (2020:
£2.88m), due to the higher number of fixtures and the gradual re-opening of
LBO's following the various lockdowns.
Conference and Events revenues were £0.26m (2020: £0.18m) and The Lodge was £
0.04m (2020: £0.13m) due to the former re-commencing trading following ceasing
of operations in March 2020 whilst the latter has had no paying guests since
the same date. The nursery turnover was £1.56m (2020: £1.22m) which was up 28%
as a result of the business returning to pre-pandemic occupancy and trading
levels. Total costs for the year were £14.86m (2020: £11.72m) due to the
increased number of racedays with a paying attendance. The overheads were
reduced in 2020 with the majority of savings made through a staff re-structure
which reduced average headcount by 26 (a 25% reduction). The Company also
recovered £0.06m from the Government through the Coronavirus Job Retention
Scheme grant as well as benefitting from the Business Rates holiday.
Exceptional profits during 2021 were £0.15m (2020: £0.09m) being the movement
in the fair value of the DWH debtor.
Overall operating profit before interest was £0.20m (2020: £2.29m loss).
Interest payable was £0.19m (2020: £0.15m) due to the increase in interest
charges on loan facilities. The tax charge of £1.06m (2020: credit £0.23m)
relates to the movement in deferred tax during the period. Loss after tax was £
0.88m (2020: £2.04m loss).
The increase in cash reserves of £0.48m in the period (2020: £4.26m increase)
includes £1.5m repayment of loan previously drawn down, £2.41m of cash
generated from operating activities, £0.17m of cash receipts from DWH in
respect of properties sold in the period and £0.53m of capital expenditure.
There have been no other substantial movements in the balance sheet other than
the loan debt becoming payable within one year as well as the debtor due from
David Wilson Homes.
KEY PERFORMANCE INDICATORS
The Group uses raceday attendance, trading operating profit and cash generated
from operating activities, as the primary performance indicators. Total
attendance was 105,000 (2020: 12,000). Operating profit is shown within the
profit and loss account and cash generated from operating activities is shown
within the consolidated statement of cashflows.
PRINCIPAL RISKS AND UNCERTAINTIES
Cashflow Risk
The main cash flow risks, under normal trading circumstances, are the
vulnerability of race meetings to abandonment due to adverse weather
conditions, animal disease and fluctuating attendances particularly for the
Party in the Paddock events, together with the previous possibility of delayed
property receipts from David Wilson Homes. The practice of covering the
racetrack to protect it from frost and investment in improved drainage, as well
as insuring key racedays, mitigates some of the raceday risk. Regular review of
variable conferencing costs reduces the impact of a decline in conference
sales. Short term cash flow risk is mitigated by regular review of the expected
timing of receipts and by ensuring that the Group has committed contingencies
in place in order to manage its working capital and investment requirements.
Credit Risk
The Group's principal financial assets are trade and other receivables. The
Group's credit risk is primarily attributable to its trade receivables. The
amounts in the balance sheet are net of allowances for doubtful receivables.
Payment is required in advance for ticket, hospitality, sponsorship, and
conference and event sales, reducing the risk of bad debt.
Liquidity Risk
In order to maintain liquidity to ensure that sufficient funds are available
for both ongoing operations and the property redevelopment, the Group uses a
mixture of term debt and revolving credit facilities which are secured on the
property assets of the Group. The Board regularly review the facilities
available to the Group to ensure that there is sufficient working capital
available.
Price Risk
The Group operates within the leisure sector and regularly benchmarks its
prices to ensure that it remains competitive, as well as having a dynamic
pricing model in place.
Cost Risk
The Group has had a historically stable cost base. The key risks are unforeseen
maintenance liabilities, movement in utility costs and additional regulatory
costs for the racing business. A programme of regular maintenance is in place
to manage the risk of failure in the infrastructure, while utility contracts
are professionally managed. The Group is a member of the Racecourse
Association, a trade association which actively seeks to manage increases in
regulatory risk.
Interest Rate Risk
The Group manages its exposure to interest rates through an appropriate mixture
of interest rate caps and swaps, where necessary.
GOING CONCERN
The Board has undertaken a full, thorough and continual review of the Group's
forecasts and associated risks and sensitivities, over the next twelve months.
The extent of this review reflects the current economic climate as well as the
specific financial circumstances of the Group.
The Board identified that the Group's cash flow forecasts are sensitive to
fluctuating revenue streams from ticket sales, corporate hospitality,
conference and event income. A system of regular reviews of the forecasted
business has been implemented to ensure all variable costs are flexed to match
anticipated revenues. In addition, a number of race meetings have been insured
for adverse weather conditions (and other factors such as animal disease and
national mourning), reducing the levels of risk carried by the Group.
The Board has reviewed the cash flow and working capital requirements in
detail. Following this review, the Board has concluded that it has reasonable
expectation that the Group has adequate resources in place to continue in
operational existence for the foreseeable future and has not identified a
material uncertainty in this regard. On this basis the going concern basis has
been adopted in preparing the financial statements.
SECTION 172 STATEMENT
Section 172 of the Companies Act 2006 requires Directors to take into
consideration the interests of stakeholders and other matters in their decision
making. The Directors continue to have regard to the interests of the Company's
employees, members, partners, the horseracing community and other stakeholders,
the impact of its activities on the local community, the environment and the
Company's reputation for good business conduct, when making decisions. The
board identifies stakeholders through its annual strategic review. As the
business evolves the board recognises that those with a direct interest and
involvement in the decisions of the company changes.
In this context, acting in good faith and fairly, the Directors consider what
is most likely to promote the success of the Company and for these stakeholders
in the long term. For example:
· The engagement of the business with the horseracing community and
stakeholders, such as the Racecourse Association and Horsemen's Group is
routinely considered during the board's decision-making process.
· The Company has a frequent forum with local residents to ensure
communication lines are open & accessible.
· The Company continues to regularly engage with Annual members and
corporate box holders and to encourage feedback.
· The Company encourages a supportive and inclusive working culture within
the business as set out in our 'Uniquely Newbury' employee programme, alongside
supporting personal development and promoting wellness & mental health
awareness.
Key board decisions made during the year in the interests of overall business
success set out below:
Significant events/ Key S172 matters Actions and impact
decisions affected
Response to COVID-19 Customers, employees, · The board met in addition to the
shareholders, West formal meeting programme to consider
Berkshire community the impact of the pandemic on all key
stakeholders.
· In consideration of the health and
welfare of employees and racegoers,
Government social distancing guidelines
were strictly followed, including, the
reintroduction of racing behind closed
doors. With regards to the
reintroduction of racing with crowds in
attendance, the recommendations and
requirements of the British Horseracing
Authority were followed as appropriate
in the interests of all 'racing'
stakeholder groups.
· Decisions were made based on the
best information available and with
regards to the best business outcome,
in a continually changing situation.
· The wider impact on the
horseracing industry was also carefully
considered with business providing
appropriate support throughout.
· With regard to the welfare of
our local community, we allowed the NHS
to use our facility as vaccination
centre for the local health practice
community, as well as a blood testing
centre.
Outsourced Catering Customers, employees, · The board considered various
arrangement shareholders options before deciding to outsource
the catering operation.
· The board followed a thorough
tender process involving a number of
interested providers before making a
selection based on:
- Commercial benefits
- Investment support
- Access to technology and innovation
- Economies of purchasing scale
- Access to human resources
- Suitability and experience
· Consultation was made with
existing affected employees who were
all transferred under TUPE.
· Transition to the new arrangement
was completed in line with the agreed
timetable in June 2021.
· The board has further reviewed the
agreement and taken the decision to
extend the contract until 31st December
2031, subject to satisfactory
compliance with performance and service
level criteria.
Media Rights Customers, employees, · The board made thorough
Agreement shareholders consideration for all options with
regards the Company's media and betting
rights agreement.
· The decision was made taking into
account all factors to ensure
commercial returns were maximised and
racing from Newbury would be available
to the largest audience possible.
· Following this exercise, it was
decided in the best interests of all
stakeholders to move to a new contract
with Arena Leisure Racing for all
retail and digital rights.
· The new single agreement will take
effect when the two existing agreements
end on 31st March 2023 and 31st
December 2023 and will currently
terminate on 31st December 2028.
During the period to 31 December 2021 the Company has sought to act in a way
that upholds these principals. The Directors believe that the application of
Section 172 requirements can be demonstrated in relation to some of the key
decisions made and actions taken during 2021.
CORPORATE GOVERNANCE
The Company is committed to maintaining the highest standards in corporate
governance throughout its operations and to ensure all of its practices are
conducted transparently, ethically and efficiently. The Company believes
scrutinising all aspects of its business and reflecting, analysing and
improving its procedures will result in the continued success of the Company
and deliver value to shareholders. Therefore, and in accordance with the Aquis
Growth Market Apex Rule Book, (the "AQSE Rules"), the Company has chosen to
comply with the UK's Quoted Companies Alliance Corporate Governance Code 2018
(the "QCA Code"). The Company is committed to the ten principles of corporate
governance as practiced by the AQSE market. These principles are disclosed in
the 'Corporate Governance Statement' within the annual report.
CORPORATE AND SOCIAL RESPONSIBILITY
Employee Consultation
The Group places considerable value on the involvement of its employees and has
continued to keep them informed on matters affecting them as employees and on
the various factors affecting the performance of the Group and the Company.
This is achieved through formal and informal meetings, and distribution of the
annual financial statements. Employee representatives are consulted regularly
on a wide range of matters affecting their current and future interests with
our 'Uniquely Newbury' employee engagement programme at the forefront of these
initiatives.
Policy on Payments to Suppliers
Although no specific code is followed, it is the Group's and Company's policy,
unless otherwise agreed with suppliers, to pay suppliers within 30 days of the
receipt of an invoice, subject to satisfactory performance by the supplier. The
amount owed to trade creditors at 31 December 2021 is 11% (2020: 2%) of the
amounts invoiced by suppliers during the year. This percentage, expressed as a
proportion of the number of days in the year, is 40 days (2020: 8 days).
Business Relationships
The Directors recognise the need to foster the Company's business relationships
with suppliers, customers and others. To that effect, the Company have policies
and procedures in place, by which principal decisions taken by the company
during the financial year were followed.
Disabled Employees
Applications for employment by disabled persons are always fully considered,
bearing in mind the abilities of the applicant concerned. In the event of
members of staff becoming disabled every effort is made to ensure that their
employment with the Group continues and the appropriate training is arranged.
It is the policy of the Group and the Company that the training, career
development and promotion of disabled persons should, as far as possible, be
identical to that of other employees.
Charitable Donations
During the year the Group made charitable contributions totalling £3,000 to
national charities (2020: £2,225).
This report was approved by the board and signed on its behalf by:
J M THICK
Chief Executive
4 MAY 2022
Consolidated Profit and Loss Account
Year ended 31 December 2021
2021 2020
£'000 £'000
Turnover 14,831 8,487
Cost of sales (12,107) (9,501)
Gross profit/(loss) 2,724 (1,014)
Administrative expenses (2,748) (2,223)
Other operating income 66 857
Net exceptional items 154 94
Operating profit/(loss) (2,286)
196
Interest receivable and similar income 175 171
Interest payable and similar charges (192) (150)
Profit/(loss) before tax 179 (2,265)
Tax (charge)/credit (1,062) 225
Loss after tax (883) (2,040)
Profit per share (basic and diluted) (26.4)p (60.9)p
Consolidated Statement of Comprehensive Income
Year ended 31 December 2021
2021 2020
£'000 £'000
Loss for the financial (883) (2,040)
year
Remeasurement of the net defined 737 (600)
benefit liability
Deferred tax on actuarial (116)
(loss)/gain 114
Deferred tax prior year - 5
adjustment
Other comprehensive profit/(loss) 621 (481)
for the year
Total recognised loss in (262) (2,521)
the year
Consolidated Balance Sheet
As at 31 December 2021
2021 Restated
£'000 2020
£'000
Fixed assets
Tangible assets 40,811 41,549
Investments 117 117
40,928 41,666
Current assets
Stocks 22 177
Debtors
- due within one year 12,695 2,539
- due after more than one year 3,618 14,046
Cash at bank and in hand 6,009 5,529
22,344 22,291
Creditors: amounts falling due within one (10,160) (2,304)
year
Net current assets 12,184 19,987
Total assets less current liabilities 53,112 61,653
Creditors: amounts falling due after more than - (8,611)
one year
Provisions for liabilities (3,759) (2,578)
Pension deficit (705) (1,538)
Net assets 48,648 48,926
Capital grants
Deferred capital grants 36 52
Capital and reserves
Called up share capital 335 335
Share premium account 10,202 10,202
Revaluation reserve 75 75
Equity reserve 143 143
Profit and loss account surplus 37,857 38,119
Shareholders' funds 48,612 48,874
Net assets 48,648 48,926
Consolidated Statement of Changes in Equity
As at 31 December 2021
GROUP Share Share Capital Revaluation Profit Total
Capital Premium redemption reserve £ and loss £'000
£'000 £'000 Reserve '000 account
£'000 £'000
At 1 January 2021 335 10,202 143 75 38,119 48,874
Loss for the year - - - - (883)
(883)
Other comprehensive income - - - - 621 621
Total comprehensive income - - - - (262)
(262)
At 31 December 2021 335 10,202 143 75 37,857 48,612
GROUP Share Share Capital Revaluation Profit Total
Capital Premium redemption reserve £ and loss £'000
£'000 £'000 Reserve '000 account
£'000 £'000
At 1 January 2020 335 10,202 143 75 40,640 51,395
Loss for the year - - - - (2,040)
(2,040)
Other comprehensive income - - - - (481) (481)
Total comprehensive income - - - - (2,521)
(2,521)
At 31 December 2020 335 10,202 143 75 38,119 48,874
Consolidated Cash Flow Statement
Year ended 31 December 2021
2021 £ 2020
'000 £'000
Cash flows from operating activities
Loss for the financial year (883) (2,040)
Adjustments for:
Exceptional items (154) (94)
Amortisation of capital grants (17) (18)
Depreciation charges 1,262 1,194
Interest payable 192 150
Interest receivable (175) (171)
Tax charge/(credit) 1,062 (225)
Decrease in stocks 155 95
Decrease in debtors 2 860
Increase/(decrease) in creditors 672 (450)
Corporation tax received 287 207
Other associated property receipts 128 236
Pension top up payments (122) (109)
Net cash inflow/(outflow) from 2,409 (365)
operating activities
Cash flows from investing activities
Interest received 10 7
Loan repayments received 9 9
Purchase of fixed assets (532) (2,032)
Receipts from exceptional sale of fixed 167 101
assets
Purchase of freeholds - (411)
Sale of investment properties - 1,500
Net cash outflow from investing (346) (826)
activities
Cash flows from financing activities
Receipt of bank loan - 5,500
Repayment of bank loan (1,500) -
Interest paid (83) (49)
Net cash (outflow)/inflow from (1,583) 5,451
financing
Net increase in cash in the year 480 4,260
Cash as at 1 January 2021 5,529 1,269
Cash as at 31 December 2021 6,009 5,529
1.
Notes to the Financial Statements
Year ended 31 December 2021
1. GENERAL INFORMATION
Newbury Racecourse plc (the "Company") is a public company incorporated,
domiciled and registered in England in the UK. The registered number is
00080774 and the registered address is The Racecourse, Newbury, Berkshire, RG14
7NZ.
2. ACCOUNTING POLICIES
2.1 Basis of preparation of financial statements
The Group and company financial statements have been prepared under the
historical cost convention unless otherwise specified within these accounting
policies and in accordance with Financial Reporting Standard 102, "the
Financial Reporting Standard applicable in the UK and the Republic of Ireland"
(FRS 102) and the Companies Act 2006.
The Company has taken advantage of the exemption allowed under section 408 of
the Companies Act 2006 and has not presented its own Profit and Loss Account in
these financial statements.
The Parent Company is included in the consolidated financial statements and is
considered to be a qualifying entity under FRS 102 paragraphs 1.8 to 1.12. The
following exemptions available under FRS 102 in respect of certain disclosures
for the Parent company financial statements have been applied:
. No separate Parent Company Cash Flow Statement with related notes is included
The accounting policies set out below have, unless otherwise stated, been
applied consistently to all periods presented in these financial statements.
Judgements made by the directors, in the application of these accounting
policies that have significant effect on the financial statements are discussed
in note 3.
2.2 Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company and its subsidiaries Newbury Racecourse Enterprises Limited and
Newbury Racecourse Management Limited.
2.3 Going concern
The Board has undertaken a full, thorough and continual review of the Group's
forecasts and associated risks and sensitivities, over the next twelve months.
The extent of this review reflects the current economic climate as well as the
specific financial circumstances of the Group.
The Board identified that the Group's cash flow forecasts are sensitive to
fluctuating revenue streams from ticket sales, corporate hospitality,
conference and event income, and has given due consideration to the potential
future impacts of COVID-19 on attendances and the racing calendar. A system of
regular reviews of the forecasted business has been implemented to ensure all
variable costs are flexed to match anticipated revenues. In addition, a number
of race meetings have been insured for adverse weather conditions (and other
factors such as animal disease and national mourning), reducing the levels of
risk carried by the Group.
The Board has reviewed the cash flow and working capital requirements in
detail. Following this review, the Board has concluded that it has reasonable
expectation that the Group has adequate resources in place to continue in
operational existence for the foreseeable future and has not identified a
material uncertainty in this regard. On this basis the going concern basis has
been adopted in preparing the financial statements.
2.4 Revenue recognition
Services rendered, raceday income including admissions, catering arrangement &
hospitality revenues, sponsorship and licence fee income is recognised on the
relevant raceday. Income from the joint arrangement with outsourced caterers is
recognised at the agreed share rate on profits generated from such operation.
Annual membership income and box rental is recognised over the period to which
they relate.
Other income streams are also recognised over the period to which they relate,
for example, ground rents received from residents, conference income is
recognised on the day of the conference, the Lodge hotel income is recognised
over the duration of the guests stay and nursery income is recognised as the
child attends the nursery.
For purposes of improved transparency over revenue, all income relating to
prizemoney such as HBLB grants, and Owner's entry stakes are allocated as
revenue rather than offsetting cost of sales.
Sale of goods: revenue is recognised for the sale of food and liquor when the
transaction occurs.
Turnover is stated net of VAT (where applicable) and is recognised when the
significant risks and rewards are considered to have been transferred to the
buyer.
Property receipts are recognised in accordance with the substance of the
transaction being that of an exceptional sale of land to David Wilson Homes.
The minimum guaranteed sum, as set out in the agreement with David Wilson
Homes, is recognised at the point of sale. In accordance with FRS102, at each
reporting date, the sum receivable, which is included in Other Debtors, is re
estimated based upon currently projected land value with the difference between
this value and the discounted net present value recorded in the profit and loss
account.
2.5 Other investments
Investments in subsidiaries are measured at cost less accumulated impairment.
Investments in unlisted Group shares, whose market value can be reliably
determined, are remeasured to market value at each balance sheet date. Gains
and losses on remeasurement are recognised in the Consolidated Profit and Loss
Account for the period. Where market value cannot be reliably determined, such
investments are stated at historic cost less impairment.
2.6 Investment income
Dividends and other investment income receivable are included in the Profit and
Loss Account inclusive of withholding tax but exclusive of other taxes.
2.7 Lease assets receivable
Lease assets receivable relates to freeholds that the Group has acquired from
David Wilson Homes. The freeholds concerned relate to residential apartment
buildings constructed as part of the overall residential development.
Individual apartments in the development were sold by David Wilson Homes to
purchasers under long term leases, typically of 125 years. Under the terms of
their long term leases, lessees are required to pay 'ground rent' to the
freehold owner for the duration of their lease. As the majority of the risks
and rewards, for much of the life of the property, lie with the lessee, the
Group does not recognise a fixed asset in relation to the freehold to the
extent attributable to the lease.
These are initially recognised at fair value which is calculated based on the
net present value of future cashflows arising from the ground rents receivable
over the lease term. This also represents the market value of the freehold
agreed at the time of the underlying transaction. These amounts are included in
the balance sheet as debtors less than and greater than one year. Ground rent
receipts relating to the period, are applied against the net receivable
balance. The amounts arising from the unwinding of discounted cashflows are
included in interest receivable.
2.8 Tangible fixed assets
Tangible fixed assets are stated at cost or valuation, net of depreciation and
any provision for impairment.
Land is not depreciated. Depreciation on other assets is charged so as to
allocate the cost of assets less their residual value over their estimated
useful lives, using the straight line method.
Depreciation is provided on the following basis:
Freehold buildings and outdoor
fixtures 2% - 5% straight line
Tractors and motor
vehicles 5% - 10% straight line
Fixtures, fittings and
equipment 2% - 25% straight line
The assets' residual values, useful lives and depreciation methods are
reviewed, and adjusted prospectively if appropriate, or if there is an
indication of a significant change since the last reporting date (see note 3).
Gains and losses on disposals are determined by comparing the proceeds with the
carrying amount and are recognised in the Consolidated Profit and Loss Account.
2.9 Impairment of assets
Financial assets (including trade and other debtors)
A financial asset not carried at fair value through profit or loss is assessed
at each reporting date to determine whether there is objective evidence that it
is impaired. A financial asset is impaired if objective evidence indicates that
a loss event has occurred after the initial recognition of the asset, and that
the loss event had a negative effect on the estimated future cash flows of that
asset that can be estimated reliably.
An impairment loss in respect of a financial asset measured at amortised cost
is calculated as the difference between its carrying amount and the present
value of the estimated future cash flows discounted at the asset's original
effective interest rate. For financial instruments measured at cost less
impairment an impairment is calculated as the difference between its carrying
amount and the best estimate of the amount that the Company would receive for
the asset if it were to be sold at the reporting date. Interest on the impaired
asset continues to be recognised through the unwinding of the discount.
Impairment losses are recognised in profit or loss. When a subsequent event
causes the amount of impairment loss to decrease, the decrease in impairment
loss is reversed through profit or loss.
2.10 Impairment of fixed assets
Assets that are subject to depreciation are assessed at each balance sheet date
to determine whether there is any indication that the assets are impaired.
Where there is any indication that an asset may be impaired, the carrying value
of the asset (or cash generating unit to which the asset has been allocated) is
tested for impairment. An impairment loss is recognised for the amount by which
the asset's carrying amount exceeds its recoverable amount. The recoverable
amount is the higher of an asset's (or CGU's) fair value less costs to sell and
value in use. For the purposes of assessing impairment, assets are grouped at
the lowest levels for which there are separately identifiable cash flows
(CGUs). Non-financial assets that have previously been impaired are reviewed at
each balance sheet date to assess whether there is any indication that the
impairment losses recognised in prior periods may no longer exist or may have
decreased.
2.11 Stocks
Stocks are valued at the lower of cost and net realisable value. Provision is
made for obsolete, slow moving or defective items where appropriate.
2.12 Repairs and renewals
Expenditure on repairs and renewals and costs of temporary facilities during
construction works are written off against profits in the year in which they
are incurred.
2.13 Cash and cash equivalents
Cash is represented by cash in hand and cash equivalents, being short term
highly liquid investments that are readily convertible to known amounts of cash
and that are subject to an insignificant risk of changes in value.
2.14 Provisions for liabilities
Provisions are made where an event has taken place that gives the Group a legal
or constructive obligation that probably requires settlement by a transfer of
economic benefit, and a reliable estimate can be made of the amount of the
obligation.
Provisions are charged as an expense to the Consolidated Profit and Loss
Account in the year that the Group becomes aware of the obligation and are
measured at the best estimate at the Balance Sheet date of the expenditure
required to settle the obligation, taking into account relevant risks and
uncertainties.
When payments are eventually made, they are charged to the provision carried in
the Balance Sheet.
2.15 Dividends
Where dividends are declared, appropriately authorised (and hence no longer at
the discretion of the Group) after the balance sheet date but before the
relevant financial statements are authorised for issue, dividends are not
recognised as a liability at the balance sheet date because they do not meet
the criteria of a present obligation in FRS102.
2.16 Current and deferred taxation
The tax expense for the year comprises current and deferred tax. Tax is
recognised in the Consolidated Profit and Loss Account, except that a charge
attributable to an item of income and expense recognised as other comprehensive
income or to an item recognised directly in equity is also recognised in other
comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws
that have been enacted or substantively enacted by the balance sheet date in
the countries where the Company and the Group operate and generate income.
Deferred tax is provided on timing differences which arise from the inclusion
of income and expenses in tax assessments in periods different from those in
which they are recognised in the financial statements. The following timing
differences are not provided for: differences between accumulated depreciation
and tax allowances for the cost of a fixed asset if and when all conditions for
retaining the tax allowances have been met; and differences relating to
investments in subsidiaries, to the extent that it is not probable that they
will reverse in the foreseeable future and the reporting entity is able to
control the reversal of the timing difference. Deferred tax is not recognised
on permanent differences arising because certain types of income or expense are
non-taxable or are disallowable for tax or because certain tax charges or
allowances are greater or smaller than the corresponding income or expense.
Deferred tax is provided in respect of the additional tax that will be paid or
avoided on differences between the amount at which an asset or liability is
recognised in a business combination and the corresponding amount that can be
deducted or assessed for tax.
Deferred tax is measured at the tax rate that is expected to apply to the
reversal of the related difference, using tax rates enacted or substantively
enacted at the balance sheet date. For non-depreciable assets that are measured
using the revaluation model, or investment property that is measured at fair
value, deferred tax is provided at the rates and allowances applicable to the
sale of the asset/property. Deferred tax balances are not discounted.
Unrelieved tax losses and other deferred tax assets are recognised only to the
extent that is it probable that they will be recovered against the reversal of
deferred tax liabilities or other future taxable profits.
Deferred tax assets and deferred tax liabilities are offset when the entity has
a legally enforceable right to set off current tax assets against current tax
liabilities, and when the deferred tax assets and deferred tax liabilities
relate to income taxes levied by the same taxation authority on the same
taxable entity.
2.17 Grants
Coronavirus Job Retention Scheme grants, provided by the Government, are
accounted for under the performance model in line with accounting standards,
with these grants credited to the Profit and Loss Account as other operating
income in the month of the corresponding payroll expense. The corresponding
debtor is carried on the balance sheet until the cash is received. Business
Rates Relief received by the Group is treated as a direct reduction in
expenses.
Capital grants received are accounted for as deferred grants on the Balance
Sheet and credited to the Profit and Loss Account over the estimated economic
lives of the asset to which they relate. Capital grants are in deferred capital
grants on the Balance Sheet as the associated works have been performed and it
is not in any way repayable.
2.18 Pensions
Defined contribution plans and other long term employee benefits
A defined contribution plan is a post-employment benefit plan under which the
company pays fixed contributions into a separate entity and will have no legal
or constructive obligation to pay further amounts. Obligations for
contributions to defined contribution pension plans are recognised as an
expense in the profit and loss account in the periods during which services are
rendered by employees.
Defined benefit plans
A defined benefit plan is a post-employment benefit plan other than a defined
contribution plan. The entity's net obligation in respect of defined benefit
plans is calculated by estimating the amount of future benefit that employees
have earned in return for their service in the current and prior periods; that
benefit is discounted to determine its present value. The fair value of any
plan assets is deducted. The entity determines the net interest expense
(income) on the net defined benefit liability (asset) for the period by
applying the discount rate as determined at the beginning of the annual period
to the net defined benefit liability (asset) taking account of changes arising
as a result of contributions and benefit payments.
The discount rate is the yield at the balance sheet date on AA credit rated
bonds denominated in the currency of, and having maturity dates approximating
to the terms of the entity's obligations. A valuation is performed annually by
a qualified actuary using the projected unit credit method. The entity
recognises net defined benefit plan assets to the extent that it is able to
recover the surplus either through reduced contributions in the future or
through refunds from the plan.
Changes in the net defined benefit liability arising from employee service
rendered during the period, net interest on net defined benefit liability, and
the cost of plan introductions, benefit changes, curtailments and settlements
during the period are recognised in profit or loss.
Remeasurement of the net defined benefit liability/asset is recognised in other
comprehensive income in the period in which it occurs.
2.19 Borrowing and loan issue costs
Interest bearing bank loans and overdrafts are recorded at the proceeds
received, net of direct issue costs. Finance charges, including premiums
payable on settlement or redemption and direct issue costs are accounted for on
an accrual basis in the profit and loss account using the effective interest
method and are added to the carrying amount of the instrument to the extent
that they are not settled in the period which they arise. Debt issue costs are
initially recognised as a reduction in the proceeds of the associated capital
instrument.
2.20 Financial instruments
Trade and other debtors / creditors
Trade and other debtors are recognised initially at transaction price plus
attributable transaction costs. Trade and other creditors are recognised
initially at transaction price less attributable transaction costs. Subsequent
to initial recognition they are measured at amortised cost using the effective
interest method, less any impairment losses in the case of trade debtors. If
the arrangement constitutes a financing transaction, for example if payment is
deferred beyond normal business terms, then it is measured at the present value
of future payments discounted at a market rate of instrument for a similar debt
instrument.
Interest bearing borrowings classified as basic financial instruments
Interest bearing borrowings are recognised initially at the present value of
future payments discounted at a market rate of interest. Subsequent to initial
recognition, interest bearing borrowings are stated at amortised cost using the
effective interest method, less any impairment losses.
Fair value measurement
Assets and liabilities that are measured at fair value are classified by level
of fair value hierarchy as follows:
Level 1 - quoted prices (unadjusted) in active markets for identical assets or
liabilities.
Level 2 - inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly or indirectly.
Level 3 - inputs for the asset or liability that are not based on observable
market data.
2.21 Exceptional items
Directors exercise their judgement in classification of certain items as
exceptional and outside the Group's underlying results. The determination of
whether items should be separately disclosed as an exceptional item or other
adjustment requires judgement on its materiality, nature and incidence.
Accounting transactions related to the DWH agreement are considered outside the
ordinary course of business, see note 6 for further detail.
3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION
UNCERTAINTY
In the application of the Group's accounting policies, which are described in
note 2, the directors are required to make judgements, estimates and
assumptions about the carrying amounts of assets and liabilities that are not
readily apparent from other sources. The estimates and associated assumptions
are based on historical experience and other factors that are considered to be
relevant. Actual results may differ from these estimates. The estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimate is
revised if the revision affects only that period, or in the period of the
revision and future periods if the revision affects both current and future
periods.
The following are the critical judgements and key sources of estimation
uncertainty that the directors have made in the process of applying the Group's
accounting policies and that have the most significant effect on the amounts
recognised in the financial statements.
David Wilson Homes
The fair value of the long-term David Wilson Homes debtor balance is an
estimate that is determined with reference to current market conditions and to
reflect the risks specific to the balance due. Estimates include the current
value of the land as determined by the agreed parameters of the land sale
agreement with David Wilson Homes, together with the application of a suitable
discount rate based on management judgement.
Impairment of assets
Determining whether assets are impaired requires an estimation of the value in
use of the cash generating units to which assets have been allocated. The value
in use calculation requires the entity to estimate the future cash flows
expected to arise from the cash generating unit and a suitable discount rate in
order to calculate present value. The carrying amount of tangible fixed assets
and investment property at the Balance Sheet date was £41.7 million. No
indication of impairment has been identified in 2021 (2020: none identified).
Residual values and useful economic lives
The Group's tangible fixed assets are reviewed, whenever there is a relevant
change in circumstances or after relevant review, in order to assess whether
the residual values and useful economic lives, based on management estimates,
continue to be appropriate for calculating depreciation in the period. There
was no change in residual values or useful economic lives during 2021.
4. EXCEPTIONAL ITEMS
2021 2020
£'000 £'000
Net book value of asset disposal - (6)
DWH debtor movement in fair value 154 100
Total 154 94
5. PROFIT PER SHARE
Basic and diluted profit per share is calculated by dividing the loss
attributable to ordinary shareholders for the year ended 31 December 2021 of £
883,000 (2020: loss of £2,040,000) by the weighted average number of ordinary
shares during the year of 3,348,326 (2020: 3,348,326).
NOTES
The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 December 2021 or 2020 but is derived
from those accounts. Statutory accounts for 2020 have been delivered to the
Registrar of Companies and those for 2021 will be delivered following the
Company's annual general meeting.
The information included in this announcement is taken from the audited
financial statements which are expected to be dispatched to the members shortly
and will be available at www.newburyracecourse.co.uk. The audit report for the
year ended 31 December 2021 and for the year ended 31 December 2020 was
unqualified and did not include a reference to any matters to which the auditor
drew attention by way of emphasis, without qualifying their report or
qualified, including if the audit report contained a statement under section
498(2) (accounting records or returns inadequate or accounts or directors'
remuneration report not agreeing with records and returns) or section 498(3)
(failure to obtain necessary information and explanations).
This announcement is based on the Company's financial statements, which are
prepared in accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards and applicable law), including
FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of
Ireland and with those parts of the Companies Act 2006 that are applicable to
companies reporting under UK GAAP.
Neither an audit nor a review provides assurance on the maintenance and
integrity of the website, including controls used to achieve this, and in
particular whether any changes may have occurred to the financial information
since first published. These matters are the responsibility of the directors,
but no control procedures can provide absolute assurance in this area.
Legislation in the United Kingdom governing the preparation and dissemination
of financial information differs from legislation in other jurisdictions.
This preliminary statement was approved by the Board of Directors on 4 May 2022
END
(END) Dow Jones Newswires
May 05, 2022 02:00 ET (06:00 GMT)
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