Mon, 21 Sept 2020
The coronavirus pandemic has resulted in Newbury Racecourse reporting a 68 per cent drop in turnover in the first six months of 2020.
The racecourse was forced to cease all of its racing, hotel and conference and events trading activities on March 17, after holding three racedays before the lockdown.
Racing resumed behind closed doors on June 11 and three racedays were held in the first half of the year, bringing the number of racedays to six, compared to 11 in 2019.
Total turnover in the six months to June 30 was down 68 per cent compared with the same period in 2019, £7.57m to £2.45m
Loss before interest, tax and exceptional items was £1.64m, compared with a £300,000 loss the year before.
Losses after tax were £1.68m compared with a £221,000 loss in 2019.
The racecourse has had to furlough staff, and has gone through a restructure and redundancy programme resulting in 19 staff being made redundant (an 18 per cent reduction).
The restructuring has resulted in voluntary salary sacrifices by senior management and employees as well as the non-executive directors waiving their remuneration.
The racecourse has said that the outlook is "very challenging and unpredictable" but its board said it was confident that the company has the financial resources to trade through this difficult period.
It said the pandemic would have a "substantial financial impact" as admissions, catering and hospitality raceday revenues represent around 50 per cent of the company’s annual turnover.
"This will result in the business disappointingly reporting a substantial loss for 2020 and into the future whilst we continue to be impacted by the pandemic," the racecourse said.
Chairman of Newbury Racecourse plc, Dominic Burke, said: "The current situation we now find ourselves in, due to the Covid-19 pandemic, is very challenging and continually changing. We have implemented a number of positive actions to mitigate against the revenue shortfall created by the forced closure of trading activities since the March lockdown.
"Despite this we still expect to suffer significant losses and a depletion of our cash resources through 2020 and into the future whilst we continue to be impacted by the pandemic. We remain confident that the actions taken, some very difficult, will protect the business.
"Beyond this, the redevelopment still provides a first class venue that will enable us to continue to host racing and other events of the highest quality in the future. We retain facilities that remain well placed to meet the increasing demands of our customers, from horsemen and racegoers, to conference and hotel guests, nursery patrons and local residents as and when we are able to welcome them back to the racecourse.”
The Rocking Horse Nursery reopened to a reduced number of children on June 1 and achieved 75 per cent occupancy by the end of August.
Nursery revenues in the first six months of 2020 were £0.51m, down 32 per cent on the comparative period in 2019, reporting an operating profit of £0.17m (compared with £0.29m in 2019).
However, The Lodge Hotel and the racecourse's Conference and Events business remain closed. And, based on the current demand projections, the racecourse said it was not expecting either of these to be able to generate positive cashflows until 2021 at the earliest.
The closure of The Lodge has resulted in a 69 per cent decrease in hotel revenues.
The home building on the site continues to progress with the central area apartments now completed and sold while construction is continuing in the eastern area. Approximately 1,000 homes out of the total c.1,500 are now built.
The final date for the balance of the guaranteed minimum land value to be paid by David Wilson Homes is April 2022 and as at 30 June 2020 the balance outstanding was £10.9m.