Arena expects hurdles ahead as funding is reduced from levy

The group said a material uplift in profits this year looks unlikely due to cuts in funding received from the levy on bookmakers.

The company’s racecourses at Doncaster, Windsor, Lingfield Park, Southwell, Wolverhampton, Folkestone and Worcester staged 352 fixtures in 2010 and Arena said its average attendance increased by 4.2 per cent to 1,800.

Total attendance slipped from 639,000 to 634,000, although attendance at the Ladbrokes St Leger festival at Doncaster Racecourse in September rose from 53,000 to 60,000, including a Saturday crowd of 30,000 compared with 27,000 a year earlier.

Of the scheduled fixtures, 18 were abandoned during 2010, up from eight in 2009 as a result of severe weather conditions during both the early part of the year and the last five weeks of 2010.

The group’s Doncaster Racecourse cancelled two meetings on December 10 and 11. An extra fixture was held to replace these on January 12.

Arena Leisure, which operates a quarter of all horseracing fixtures in the UK, said pre-tax profits for the year to December 31 fell from £4.1m to £3.6m on slightly lower revenue, which fell from £65.2m to £64m.

The group said that Doncaster Racecourse has planning consent for a 120-bedroom hotel and 34 residential units.

This consent was recently extended until mid-2013.

Arena said it remains confident of the commercial viability of the scheme and of its complementary nature to the existing facilities. Hospitality attendance in 2010 jumped 17 per cent to 45,200 as the economy recovered and the company staged more special events.

The yield from the levy is set to fall more than £10m to £64.8m in 2010/11 due to the offshoring of internet and telephone betting and the impact of overseas betting operators.

Arena said this meant the Levy Board had taken the unusual step in making certain fixtures available with either no or partial funding for prize money.

Arena has secured 48 partially funded fixtures and 36 fixtures with no funding for prize money which will not be as profitable as fully funded fixtures.

The levy for 2011/12 is expected to deliver a yield of between £73.7m and £80.8m, which Arena described as encouraging after intervention by the Government last month.

The company said it continued to press for a levy solution that takes account of offshore operators and betting exchanges and their customers, which have so far not been addressed under the current determination.

The group’s shares closed up seven per cent last night, a rise of 2.1p to 31.9p.