RNS Number:5783U
Arena Leisure PLC
16 April 2002
FOR IMMEDIATE RELEASE 16 April 2002
ARENA LEISURE PLC ("ARENA")
PRELIMINARY RESULTS FOR THE YEAR ENDED
31 DECEMBER 2001
Highlights
Results
• Improved EBITDA of £6,000 after writing off exceptional technology costs
of £1,945,000 in first half (Nine months to end 2000: loss £3,801,000)
• Second half operating profit of £593,000
• Increase in net assets to £100.9m (2000: £26.1m)
• Increase in group turnover to £26.6m (Nine months to end 2000: £15.7m)
• Loss after tax of £6.2m (Nine months to end 2000: loss of £6.2m)
• Net cash on 31 December 2001 of £27.6m
• Loss per ordinary share of 1.95p (2000: loss of 2.29p)
attheraces
• Successful conclusion of £307m attheraces media rights transaction in June
2001
• Completion of associated £85.6m Placing and Open Offer
• Secured 33 per cent stake in attheraces with Channel 4 and BSkyB
• Successful launch of www.attheraces.co.uk platform in December
• Several media rights transactions concluded, netting attheraces minimum
£15m per annum - 68 per cent of 2002/3 rights fee
• Scheduled May launch of digital interactive TV channel on course
Other significant achievements
• Arena Online technology division performing well with proprietary '
Trackplay' gaming software securing international customer base
• New £3m polytrack surface at Lingfield Park racecourse opened in November
• Strengthened main Board and management team
• Three season sponsorship deal announced today with Littlewoods Bet Direct
for all weather racecourses, worth total of £1m
• Three year sponsorship deal announced today with Gala Group for the Royal
Windsor Festival, worth £90,000 in year one with potential to rise to total
of £320,000
Ian Penrose, Group Managing Director, said today: "This was a year of
significant achievement. We consolidated our position as a major player in the
racing and gaming industries. We have moved forward strongly on all fronts and
look forward to delivering upon the firm foundations now in place."
- ENDS -
For further information please contact:
Ian Penrose, Group Managing Director
Arena Leisure Plc Tel: 020 7495 2277
Nick Davis, Director of Communications
Arena Leisure Plc Tel: 020 7495 2277
David Rydell/Caroline Sturdy
Bell Pottinger Financial Tel: 020 7861 3232
CHAIRMAN'S STATEMENT
Introduction
I am pleased to announce our results for the twelve month period to 31 December
2001. It also gives me great pleasure to be making my first statement as
Chairman of the group since taking over the role from Martin Pope in October
2001. Martin retired after eight years in the saddle, during which time he was
widely admired, not least by me, for his clear thinking and wise leadership. He
steered Arena through a period of great change and progress, dedicating the
latter four years of hard work to turn Arena from a shell company into a company
which is now playing a major role in the future of British racing. In addition
to expressing the Board's gratitude, I would like to thank him personally for
helping to ensure that the transition to a new Chairman was as smooth as it
could possibly be.
The year 2001 was one of unprecedented change for the UK racing and betting
industries, with the prolonged media rights transaction, introduction of
tax-free betting, relaxation of advertising restrictions and the publication of
a positive Gambling Review Body's proposals aimed at modernising and
consolidating existing regulations. It was also a year in which the foot and
mouth outbreak had a significant effect on the racing industry. High on the list
of strategic issues for the racing industry as a whole remains the question of
future funding and how best to exploit its picture and data rights. Arena
continues to play a vital role in these negotiations.
Overview of results
Last year we announced a change in the year-end from March to December and as a
result we report to you today on the twelve months to 31 December 2001. The
comparative figures in this document are for the nine months to 31 December
2000. Overall turnover was up to £26.6m (2000: £15.7m), with an increase in net
assets to £100.9m (2000: £26.1m). Looking at the second half of 2001, we made a
profit of £593,000 and our racecourses and technology divisions were profitable.
All amounts invested in technology developments have been written off on a
prudent accounting basis. Loss overall for the year was £6.2m, the same level as
for the nine months to end of 2000. Loss per ordinary share was 1.95p (2000:
loss of 2.29p).
Management and staff
We have continued to review all operations and resources as your company has
developed. A number of recommendations have been made to the Board; some already
implemented include initiatives which affect the management of our six
racecourses, attheraces and our technology division and improved internal and
external communications. The changes to the Board as highlighted in our last
annual report are starting to deliver positive improvements in all aspects of
our business, and we are pleased with the increasing responsibilities that we
are able to place upon our Chief Financial Officer, Robert Mercer.
We could not have delivered the achievements of last year without an
extraordinary effort by our people. They have been the lifeblood of the company
and my colleagues on the Board and I would like to thank each and every one of
them for their dedication and determination throughout 2001.
Post-balance sheet events
I am delighted to announce two further deals today, the first is a three season
sponsorship deal with Littlewoods Bet Direct, owned by Sportech plc, for our
three all weather racecourses, worth a minimum of £1m. The second is a
three-year sponsorship deal with the Gala Group for the Royal Windsor Festival,
which commences at £90,000 in year one rising to a potential total of £320,000
for the full term.
Dividend
It is your Board's intention not to pay a dividend for this financial period but
to continue to reinvest in the medium term growth of the business in order to
take advantage of Arena's strong position in the fields of horseracing, media
rights and gaming technology.
Outlook
Looking forward, I would single out four key elements of our programme for 2002.
Firstly, following the successful media rights deal last year, we will continue
with our partners in attheraces to exploit maximum value from the media rights
purchased, starting with the launch of the attheraces interactive television
channel on Sky in May 2002. This will also ensure that our technology division
continues as key developers of new platforms for attheraces.
Secondly, Arena will look into maximising potential from its current racecourse
business taking advantage of the increase in horseracing's exposure to the
general public as a result of attheraces' marketing activity and the public's
continued thirst for sport and quality leisure events and venues.
Thirdly, with regards to the opportunities presented by the Government's
Gambling Review proposals, following Sir Alan Budd's favourable report into
gaming, we have commenced immediate investigations into redeveloping certain of
our racecourses to include hotels, casinos, gaming halls and other non-raceday
facilities as appropriate. This will put us in the best possible position to
take advantage of the proposed changes when they are expected to become law in
2003/4.
Finally, in conjunction with Scientific Games Corporation of the USA, our
partners in 'Trackplay', we will continue to look for additional customers for
our unique gaming technology.
The company continues to trade in line with our expectations. Our aims for the
longer-term success of the company remain undiminished, and I look forward to
the future with confidence.
Roger D Withers
Chairman
GROUP MANAGING DIRECTOR'S REVIEW
Arena Leisure made significant progress in 2001 on several fronts. The
successful attheraces transaction provided a dramatic start and demonstrated our
determination to achieve results, which continues unabated.
attheraces
A significant element of our strategy was put into place with the successful
conclusion to the attheraces media rights acquisition in June 2001. attheraces,
owned equally by Arena, BSkyB and Channel 4, has acquired the exclusive
worldwide rights to pictures and audio from forty nine racecourses in the UK,
for a period of up to ten years, representing some ninety per cent of off-course
horserace betting turnover, and all the major racecourses in the UK, including
Aintree, Ascot, Cheltenham, Goodwood and Newmarket.
Through a focused and cohesive exploitation strategy, attheraces will broadcast
the pictures and audio of UK racing across all forms of distribution platform,
including interactive digital television, internet, mobile devices, telephone,
radio and retail premises, both in the UK and overseas, but excluding licensed
betting offices in the UK and Ireland. Income to the consortium comes from two
main sources; exploiting the media rights now owned as well as revenue from
betting income. In addition to our share of revenues resulting from being a
consortium member, Arena also receives an additional three per cent of all
pari-mutuel betting turnover placed on any attheraces platform over the next ten
years.
In terms of exploiting attheraces' media rights, we are pleased to report that a
series of additional media rights deals have been concluded with terrestrial and
satellite broadcasters, BBC Worldwide and fixed odds betting providers that are
worth a minimum of £15m per annum. These deals mean that we have already secured
68 per cent of the £22m rights payment due to the racing industry for 2002/3.
Further rights deals are pending with overseas bookmakers, radio broadcasters
and premium rate telephone service operators.
These transactions reflect the powerful commercial value of the media rights
acquired by attheraces and demonstrate the attraction of international audiences
to UK horseracing and gaming.
Income from betting to attheraces commenced immediately following the launch of
the attheraces.co.uk internet site on 11 December 2001. The launch was later
than anticipated as a result of final integration testing with the UK Tote but
turnover for the first 15 weeks of operation is in line with management's
expectations at £570,000. To date there are a total of 21,000 registrations of
which sixteen per cent are active bettors with an average bet size of
approximately £7. We are pleased that the exploitation of media rights has
exceeded management's expectations and we look forward to the launch of our
primary UK platform, the attheraces television channel in May 2002 to further
drive betting revenue.
The attheraces television channel will start broadcasting on Sky to nearly six
million homes across the UK and Eire. This brings two hundred times more
potential viewers than were previously subscribing to watch racing programmes.
The channel will broadcast seven days a week for approximately 14 hours a day
through Sky's family package, thereby reaching 96 per cent of all Sky's
subscribers. By the end of May this Channel aims to have a full interactive
facility, whereby viewers will be able to place a wide variety of bets from the
comfort of their home through the television set via their remote control. This
will make it the UK's first interactive betting television channel dedicated to
horseracing. The technical innovations, led by Sky, are pioneering.
At the same time BSkyB and Channel 4 will re-title their own racing coverage as
Sky attheraces and Channel 4 attheraces. Sky, which already carries racing on
Sky Sports, has rights for sixty two-hour programmes a year for evening and
Sunday racing whilst Channel 4 has scheduled coverage of almost two hundred
meetings. All of these will be broadcast simultaneously on attheraces, which
will show the full line-up from each meeting. The BBC will be broadcasting from
six racecourses, including the Grand National, the Derby and Royal Ascot, and
these will also be featured on attheraces. This increased coverage and
accessibility for racing presents an unprecedented opportunity to promote the
sport to a larger audience through a wider choice of channels.
Elsewhere in horseracing, agreement between the bookmakers and the sport's
governing bodies has not yet been reached at the time of writing with regards to
the sale of pictures and race information to betting shops. In the event that a
deal is not concluded from 1 May 2002, the attheraces television channel will
become the only platform in the UK where daily coverage of UK horseracing will
be available. At times where there is no British racing, there will be
opportunities to show overseas racing, and negotiations continue to secure
premium overseas content.
Technology
Our technology division continues to have an important role to play, on behalf
of its key customer attheraces, setting the standards for interactive betting on
horseracing on the internet, digital television and all future platforms.
The division has a minimum three-year technology and content support contract to
attheraces and it is now profitable and cash flow positive. I am delighted that
our decision to continue to invest in developing our unique technology at the
same time as securing racing's media rights has paid off. We continue to work
closely with Autotote Systems Incorporated ("Autotote"), a subsidiary of the
NASDAQ listed Scientific Games Corporation of the USA to attract new customers
for our proprietary "Trackplay" gaming software.
Trackplay
Our 30/70 per cent associate venture with Autotote has made significant progress
in recent months. Trackplay software continues to be used by our first customer,
Fair Grounds racecourse in Louisiana, New Orleans, where more than 500,000
pari-mutuel bets have now been transacted through its web site fgnetbet.com.
Current developments include new internet betting solutions with Fintoto in
Finland and Magna Entertainment Corporation ("MEC") in the USA. MEC is a major
North American horseracing and gaming group with nine racecourses and revenues
in 2001 of US$519m. They were one of only three companies permitted a licence in
the state of California to conduct Advance Deposit Wagering from January 2002.
MEC handled 70 per cent of the US$13m wagered over the internet and by telephone
in California from January 25 to March 17, 2002. Its internet wagers were
handled by xpressbet.com, a Trackplay-based platform. Now in its fourth full
month of operation, it continues to show good growth and we are delighted that a
major racecourse and gaming company again chose to use our Trackplay software.
Trackplay's business model is aimed at securing an ongoing percentage of revenue
from each bet placed on the system or per user, along with an up-front payment
for any personalisation that the customer requires. We are confident of the
future of this product within a $100bn global horseracing gaming market, and are
actively pursuing a number of enquiries.
All Weather racecourse operations
Arena has made significant strides in taking the sport of all weather racing
forward. We are particularly proud that following the laying of a polytrack
racing surface at Lingfield Park in summer 2001 at a cost of £3m, we have
witnessed a record number of entries for our races. Total prize money at
Lingfield exceeded £2m during 2001 and we have received widespread acclaim from
all aspects of the racing community at the introduction of what is now
recognised as amongst the best racing surfaces in the world. In this context, we
were delighted to introduce a new race, the Fosters International Trial Stakes,
on 6 April 2002, which attracted probably the best quality field in the history
of all weather racing in this country. Improvements have also been made to
enhance our customers' on-course televisual experience.
In addition to the new racing surface at Lingfield Park, we have also commenced
initial work on detailed studies associated with the redevelopment of spectator
and leisure facilities commensurate with the quality of the racing and location
of the racecourse. We expect to be able to report further on this in due course.
We were delighted to host the Surrey Open at the Lingfield Golf Club; with the
event also programmed for 2002, this illustrates the improvements made in this
area of our business. As part of our intention to realise value from surplus
properties on the estate, we were pleased to dispose of one property in November
for a net £700,000, and we anticipate further progress on property related
issues over the next twelve months.
At Wolverhampton, we again concentrated on improving the racing surface,
investing over £300,000, which followed similar levels of investment at
Southwell in 2000. Other improvements at Wolverhampton and Southwell include
improved stabling, and the renewal of parade and pre-parade rings. Hotel
occupancy levels and golf club memberships are at record levels. We look forward
to building upon these.
We are delighted that after working closely with Littlewoods Bet Direct for the
last two years, we have reached agreement for Littlewoods Bet Direct to sponsor
800 all weather races for three seasons through to 30 April 2004. This deal,
unprecedented in the history of Arena, will contribute a minimum of £1m over
this period. As our all weather racecourses race all year round this gives
Littlewoods Bet Direct regular exposure in return for its sponsorship.
Together with Littlewoods Bet Direct, Arena created the first ever all weather
championships for 2001-2002, in order to introduce a clear season for the sport.
The championships ran from 13 November 2001 to 27 March 2002, with prizes for
the national and regional trainers, stable staff and jockeys exceeding £100,000.
Turf only racecourse operations
Royal Windsor racecourse has proved to be an excellent acquisition for your
company. We witnessed a 28 per cent growth in attendance levels in 2001 compared
to 2000, and continued to enjoy the benefits of staging the successful Monday
evening racing fixtures throughout the summer. Improvements were made to the
racing surface and a new owner's and trainer's enclosure was constructed. In
order to improve the customer focus of the racecourse, a new Royal Windsor
Festival was created in 2001 and we are delighted to announce that we have
secured a major sponsor, Gala Group, for this three-day event for the next three
years 2002-2004. Gala will be paying £90,000 in year one, increasing to a total
of £320,000 if the full term is served, making this the largest single
sponsorship in the history of Royal Windsor racecourse, and follows our policy
of creating a special and unique atmosphere at this racecourse.
Folkestone and Worcester racecourses continue to trade in line with
expectations. Their racing surfaces are now in the best condition that they have
been in for many years and both enjoy their own particular niche in their local
communities.
During the year, we abandoned the policy of charging winning owners of races for
trophies, a decision which was widely welcomed and brought us into line with the
industry.
Catering
Since the year end, to improve standards for our customers and to maintain a
consistency of quality across the company, we have formed a strategic
partnership with the UK's leading sporting events caterer, Letheby &
Christopher. Already contracted at our Royal Windsor racecourse, Letheby &
Christopher has been appointed to provide its specialist catering services at
our other five racecourses. The five-year contract will cover both race-day and
non-race day activities. We are already beginning to witness the benefits of
this arrangement.
Industry Matters
Racing is going through a very important period of change. Against a positive
backdrop of increasing attendances and additional media rights revenues, the
industry is at present undergoing a challenging and important period. The
principal issues concern the sales of picture and data rights to the bookmaking
shops in the UK and Eire and the wide ranging inquiry launched by the Office of
Fair Trading ('OFT') into the structure of the sport, and the role of the
British Horseracing Board ('BHB') within it.
In respect of the regulatory environment, we would welcome initiatives that will
facilitate a competitive environment for all, one in which closer contact and
productive working relationships with all our customers is encouraged, and
whereby the reputation and quality of what in our opinion is the world's best
horseracing is enhanced.
Turning to the protracted negotiations with the bookmakers, we welcome the
decision of the Government to introduce tax-free betting in the UK in October
2001 and its consequential increase of around 40 per cent in betting shop
turnover on horseracing. The subsequent determination of the Forty First Levy on
a gross betting profit basis estimates an increase in the Levy from £65m to
between £90-£105m per year with an anticipated benefit to Arena of between
£1.5-£2.4m.
Through the recently issued Government response following the Sir Alan Budd
review, the Government is seeking to establish a regulatory framework which will
be positive for gambling overall in the UK. Arena welcomes this development and
we have initiated detailed research into the opportunities that this framework
would present our racecourse operations in the areas of hotels, casinos and
gaming halls. We will report further on this at the appropriate time.
Looking ahead
Arena recognises that the racing and gaming industries continue to go through a
period of unprecedented change but we are delighted to have secured a
pre-eminent position during 2001. We now have a great platform on which to build
all elements of our business and are looking forward to further developing your
company during 2002.
Ian R Penrose
Group Managing Director
FINANCIAL REPORT
Results Summary
The results presented for the period under review are for the year to 31
December 2001. Comparative figures for the prior period reflect a nine-month
trading period as a consequence of a change in the group's accounting reference
date to 31 December. This change was introduced to align the company's financial
year with the racing industry calendar.
Trading Summary
The results of the group for the year to 31 December 2001 show an increase in
turnover to £26,604,000 (nine months to 31 December 2000: £15,700,000). Turnover
from racecourse operations increased to £22,954,000 (nine months to 31 December
2000: £15,290,000) and gaming technology (Arena Online Services Ltd) increased
to £3,650,000 (nine months to December 2000: £410,000).
The group operating loss reduced by £3,257,000 to £1,779,000 for the year to 31
December 2001 (nine months to 31 December 2000: £5,036,000). Results for the
second half of 2001 reveal an operating profit of £593,000.
Operating profit (excluding group management charges) from our racecourse
operations increased to £2,064,000 in the year to 31 December 2001 (nine months
to 31 December 2000: £1,663,000). The operating loss (excluding group management
charges) from our gaming technology business, Arena Online Services Ltd reduced
by £3,478,000 to £1,692,000 (nine months to 31 December 2000: £5,170,000), the
business having benefited from the commencement of a contract to provide
technology and operational support for the attheraces media platforms. Arena
Online Services Ltd contributed an operating profit (excluding management
charges) of £253,000 in the second half of 2001.
Group central costs were £2,151,000 for the year to 31 December 2001 (nine
months to 31 December 2000: £1,529,000).
Media Rights
During the year the group received media rights payments from attheraces (net of
the professional fees) of £1.9m. The payments due to the group's racecourses
from attheraces over the ten year period of the rights agreement, incorporate an
up front up front premium of £3.5m within the first full year of the agreement,
which commenced on 1 July 2001. It is the group's policy to release this premium
over a ten year period, pro rata to future scheduled payments. At 31 December
2001 a total of £1,638,000 of the media rights income received was deferred to
future periods.
Joint venture
The group's share of the operating loss of its 33.3 per cent joint venture,
attheraces was £3,944,000 in the year to 31 December 2001 (nine months to 31
December 2000: Nil). The results for this period are in line with expectations.
The attheraces website was launched towards the end of the financial year on 11
December 2001, and as a result, turnover for the period to 31 December 2001 does
not include any material level of betting income.
Associates
The group's share of the operating loss of its 30 per cent associated company
"Trackplay" was £308,000 in the year to 31 December 2001 (nine months to 31
December 2000: Nil). In accordance with UK accounting standards, the group has
restated the accounts of Trackplay LLC, to write off all technology development
costs as they are incurred, in line with the group's prudent accounting policy.
The impact of this charge is to increase the group's share of the operating loss
in Trackplay by £239,000.
Goodwill amortisation
Goodwill arising on consolidation in respect of the group's racecourse companies
is amortised over a period of 20 years, and in respect of the group's joint
venture "attheraces", over a period of 10 years, in line with the term of the
media rights agreement. Goodwill amortisation in respect of the racecourse
companies was £307,000 for the year to 31 December 2001 (nine months to
31.December 2000: £231,000) and £14,000 in respect of the joint venture (nine
months to 31 December 2000: Nil).
Interest
Net group interest payable reduced by £1,031,000 to £140,000 in the year to 31
December 2001 (nine months to 31 December 2000: £1,171,000). This is principally
due to significant cash inflows in respect of the group's equity fundraising in
June 2001 and the receipt of media rights guarantee payments to racecourses. The
group's share of net interest receivable in its joint venture "attheraces" was
£14,000 (nine months to 31 December 2000: £ Nil).
Loss on ordinary activities after taxation and retained
Loss after tax for the year was £6,171,000 (nine months to 31 December 2000:
£6,207,000). Basic loss per share was 1.95 pence (nine months to 31 December
2000: loss 2.29 pence).
Equity fundraising, blocked bank deposit and loans to attheraces
On 26 June 2001 the company issued 90,181,724 ordinary shares at 95 pence per
share to fund its investment in attheraces, to refinance its indebtedness to the
Bank of Scotland and to provide it with working capital. Total funds raised, net
of expenses and cost of investment in attheraces, was £79m. £60m was transferred
to a blocked bank deposit, restricted to provide funding of Arena's anticipated
obligations to attheraces Holdings Ltd and its subsidiaries and the balance was
utilised to reduce the company's bank debt. Interest on the blocked deposit is
payable to Arena Leisure Plc and is unrestricted. Since 26 June 2001 monies
advanced to attheraces Holdings Ltd total £20.95m, of which £18.75m has been
paid as part of a loan agreement to fund the initial interactive media guarantee
payments to racecourses and a further £2.2m to fund Arena's share of the working
capital requirements of the company. At 31 December 2001 the group held the
remaining £39,050,000 on blocked deposit.
Treasury Report
All bank borrowings and financial assets of the group are held in sterling and
on floating interest rates. In the current economic climate, and with the
group's evolving structure, hedging for interest rate risk is not considered
appropriate. However, the board constantly monitors the financial markets to
ensure this policy remains in the group's interest. The group does not face any
significant foreign currency risk. At 31 December 2001 the group had unutilised
bank facilities of £4,479,000 (31 December 2000: £1,680,000). Short-term
liquidity risk is managed by obtaining and reviewing the adequacy of banking
facilities. The group does not use derivative financial instruments to manage
risk.
Net bank borrowings at 31 December 2001 totalled £10,521,000, consisting of a
£10m revolving credit loan facility (fully drawn at 31 December 2001) and a net
bank overdraft of £521,000. Interest is charged on the bank overdraft at one per
cent over Bank of Scotland base rate. Interest on the revolving credit loan
facility is charged at either one per cent over Bank of Scotland base rate or 1
per cent over LIBOR. The bank loan and overdraft are secured by a fixed and
floating charge on the assets and undertakings of the group companies, and a
first legal charge on all the freehold and leasehold properties owned by the
group. This security is subject to deeds of priority and permitted charges in
favour of the Horserace Betting Levy Board ("HBLB") in respect of security for
interest free loans provided to the group, whose loans to the group total
£936,000 at 31 December 2001 (31 December 2000: £1,365,000).
Net debt at 31 December 2001 including HBLB loans (excluding blocked bank
deposit of £39,050,000) was £11,457,000. This represents gearing of 11.4 per
cent on net assets of £100,861,000 (31 December 2000: 106 per cent on net assets
of £26,145,000).
Ian R Penrose
Group Managing Director
About Arena Leisure Plc
Formed in 1997, Arena Leisure Plc is a leading racecourse operator, gaming
technology provider and media rights owner. It is the UK's largest independent
racecourse owner in terms of fixtures, hosting more than 1,500 races per year at
its six racecourses. In 2001, Arena's racecourses staged approximately twenty
per cent of all British horseracing fixtures, betting on which accounted for
some 16 per cent of the total British off-course betting revenues.
Together with its partners in attheraces, BSkyB and Channel 4, Arena acquired
the majority of media rights to UK horseracing for a period of up to ten years
from July 2001. attheraces will exploit the media rights associated with live
racing across all technology and media platforms and in many territories around
the world. The first platform (www.attheraces.co.uk) went live on the Internet
on in December 2001, and the attheraces interactive Digital Television Channel
will go live on Sky in May 2002.
Arena has a technology partnership with Scientific Games Corporation of the USA
and has developed Trackplay gaming software. This software allows racing
organisations to provide their customers with the ability to view live or
archive races, research race information and place bets remotely. This software
can be adapted for use on current and future technology platforms including the
telephone, Internet, interactive Digital Television and mobile devices.
Arena Leisure is quoted on the London Stock Exchange. For more information about
Arena Leisure Plc, please visit our corporate website at
www.arenaleisureplc.com.
Consolidated profit and loss account for the year to 31 December 2001 (Audited)
Year ended 9 months ended
31 December 31 December
2001 2000
Interest in
Group Joint venture Total Group
Note £000 £000 £000 £000
Turnover 26,604 3,265 29,869 15,700
Cost of Sales (19,852) (5,233) (25,085) (11,486)
----------------- ----------------- -------------- --------------
Gross profit/(loss) 6,752 (1,968) 4,784 (4,214)
----------------- ----------------- -------------- --------------
Administrative expenses (8,531) (1,976) (10,507) (9,250)
EBITDA 6 (3,941) (3,935) (3,801)
Depreciation (1,478) (3) (1,481) (1,004)
Amortisation (307) 0 (307) (231)
----------------- ----------------- -------------- --------------
Operating loss (1,779) (3,944) (5,723) (5,036)
----------------- ----------------- -------------- -------------
Share of operating loss in
Joint venture (3,944) -
Associate (308) -
Goodwill amortisation in respect of joint (14) -
venture
----------------- --------------
Total operating loss: (6,045) (5,036)
Group and share of joint ventures and
associates
----------------- --------------
Interest receivable 1,295 82
Interest Payable (1,421) (1,253)
----------------- --------------
Loss on ordinary activities before 1 (6,171) (6,207)
and after taxation and retained
----------------- --------------
Pence Pence
----------------- --------------
Basic and diluted loss per share 2 (1.95) (2.29)
----------------- --------------
All recognised gains and losses are included above.
All amounts relate to continuing activities.
Balance sheets at 31 December 2001 (Audited)
2001 2000 2001 2000
Interest
in joint
Group venture Total Group Company Company
Note £000 £000 £000 £000 £000 £000
Fixed Assets
Intangible assets 5,494 - 5,494 5,801 - -
Tangible assets 54,531 120 54,651 52,608 120 134
Investments-in associate 325 - 325
-other 345 - 345 345 48,144 45,251
670 - 670 345 48,144 45,251
----------- ---------- ---------- ---------- ---------- ----------
60,695 120 60,815 58,754 48,264 45,385
----------- ---------- ---------- ---------- ---------- ----------
Current Assets
Stock 146 - 146 167 - -
Debtors - due within one year 2,490 2,291 4,781 2,911 169 214
Debtors - due in more than one 6 20,950 3,436 24,386 - 41,970 8,395
year
23,440 5,727 29,167 2,911 42,139 8,609
Blocked Bank Deposit 6 39,050 - 39,050 - 39,050 -
Cash in bank and in hand 4,535 1,214 5,749 1,478 - -
43,585 1,214 44,799 1,478 39,050 -
----------- ---------- ---------- ---------- ---------- ----------
67,171 6,941 74,112 4,556 81,189 8,609
----------- ---------- ----------- ----------- ----------- ----------
Creditors: Amounts falling due (11,836) (2,540) (14,376) (17,013) (5,450) (4,756)
within one year
Net current (liabilities)/assets 55,335 4,401 59,736 (12,457) 75,739 3,853
----------- ---------- ---------- ---------- ---------- ----------
Total assets less current 116,030 4,521 120,551 46,297 124,003 49,238
liabilities
----------- ---------- ---------- ---------- ---------- ----------
Creditors: Amounts falling due
after one year
Share of net liabilities of joint (3,929) 3,929 - - - -
venture
Goodwill in respect of joint 2,245 - 2,245 - - -
venture
----------- ---------- ---------- ---------- ---------- ----------
(1,684) 3,929 2,245 - - -
Other (13,485) (8,450) (21,935) (19,863) (10,000) (16,000)
----------- ---------- ---------- ---------- ---------- ----------
(15,169) (4,521) (19,690) (19,863) (10,000) (16,000)
Provisions for liabilities and - - - (289) - (289)
charges
----------- ---------- ----------- ----------- ----------- -----------
Net assets 100,861 - 100,861 26,145 114,003 32,949
----------- ---------- ----------- ----------- ----------- -----------
Capital & reserves
Called up share capital 18,036 18,036 13,527 18,036 13,527
Share premium account 87,564 87,564 11,186 87,564 11,186
Merger reserve 5,417 5,417 5,417 5,417 5,417
Revaluation reserve 15 15 15 15 15
Special reserve 4,564 4,564 4,564 4,564 4564
Profit & loss account (14,735) (14,735) (8,564) (1,593) (1,760)
----------- ----------- ----------- ----------- -----------
Shareholders Funds 100,861 100,861 26,145 114,003 32,949
----------- ----------- ----------- ----------- -----------
All amounts within shareholders' funds are equity.
Group cash flow statement for the year ended 31 December 2001
Year ended Period ended
31 December 31 December
2001 2000
Note £000 £000
Net cash inflow/(outflow) from operating activities 1,434 (3,354)
Returns on investment and servicing of finance
Interest received 1,280 82
Interest paid (1,420) (1,253)
-------------------- --------------------
(140) (1,171)
-------------------- --------------------
Taxation
Taxation paid - (28)
Capital expenditure and financial investment
Purchase of tangible fixed assets (4,184) (2,185)
Sale of tangible fixed assets 798 81
Loans to joint venture (20,950) -
-------------------- --------------------
(24,336) (2,104)
-------------------- --------------------
Acquisitions and disposals
Investment in joint venture (2,160) -
Investment in associate (407) -
-------------------- --------------------
(2,567) -
-------------------- --------------------
-------------------- --------------------
Net cash outflow before financing (25,609) (6,657)
-------------------- --------------------
-------------------- --------------------
Management of liquid resources (39,050) -
-------------------- --------------------
Financing
Inception of Loans 10,000 1,020
Issue of ordinary shares 85,672 -
Expenses paid on issue of shares (4,785) -
Repayment of loans (18,429) (703)
-------------------- --------------------
72,458 317
-------------------- --------------------
-------------------- --------------------
Increase/(decrease) in cash 7,799 (6,340)
-------------------- --------------------
Notes to the accounts
1. The tax charge for the period is nil due to the availability of tax
losses.
2. The calculation of basic loss per share is based on the loss after tax of
£6,171,000 (31 December 2000: loss after tax £6,207,000) and on 317,242,011
(31 December 2000: 270,545,173) ordinary shares, being the weighted average
number of ordinary shares in issue. There are no dilutive potential ordinary
shares in issue.
3. Reconciliation of operating loss to net cash inflow/(outflow) from
operating activities
Year ended Period ended
31 December 31 December
2001 2000
£000 £000
Operating loss (1,779) (5,036)
Depreciation charges 1,478 1,004
Amortisation of goodwill 307 231
(Profit)/loss on disposal of tangible fixed assets (15) 4
Decrease/(increase) in stocks 21 (4)
Decrease/(increase) in debtors 421 (239)
Increase in creditors 1,290 1,072
Decrease in provisions (289) (386)
----------- -----------
Net cash inflow/(outflow) from operating activities 1,434 (3,354)
---------- ----------
4.Reconciliation of net cash flow to movement in net debt
Year ended Period ended
31 December 31 December
2001 2000
£000 £000
Increase/(decrease) in cash in the period 7,799 (6,340)
Cash outflow/(inflow) from decrease/(increase) in debt 8,429 (317)
Change in net debt arising from cash flows 16,228 (6,657)
Opening net debt (27,685) (21,028)
----------- -----------
Closing net debt (11,457) (27,685)
----------- -----------
Blocked bank deposit 39,050 -
----------- -----------
Net cash/(debt) including blocked bank deposit 27,593 (27,685)
----------- -----------
5. There have been no changes to accounting policies of the group as set out
in 31 December 2000 financial statements.
6. The blocked bank deposit is a restricted cash deposit to fund the group's
obligations to attheraces Holdings Limited and it's subsidiaries, this being
the joint venture controlled by Arena Leisure Plc, BSkyB and Channel 4
Television. Interest on the bank deposit is payable to Arena Leisure Plc and
is unrestricted.
The monies advanced to attheraces total £20.95 million, of which £18.75
million has been paid as part of a loan agreement, and £2.2 million to meet
Arena's obligations to the working capital requirements of attheraces. The
loan will be repaid (capital and interest) from a 3% share of the gross
pari-mutuel betting revenue receivable by attheraces. The working capital
element will be repaid when attheraces generates positive cash flows in
excess of operating requirements.
7. The financial information in this statement does not constitute statutory
accounts within the meaning of Section 240 of the Companies Act 1985. The
figures for the period ended 31 December 2000 have been extracted from the
accounts which have been filed with the Registrar of Companies. The
auditors' report on those accounts was unqualified. The 2001 audited
accounts will be sent to shareholders shortly.
This information is provided by RNS
The company news service from the London Stock Exchange
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