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DJ Newbury Racecourse Plc Preliminary Results

 
TIDMNYR 
 
31st July 2020 
 
                            NEWBURY RACECOURSE PLC 
 
                      ("the Racecourse" or "the Company") 
 
         Preliminary Results for the 12 months ended 31 December 2019 
 
Newbury Racecourse plc, the racing, entertainment and events business, today 
announces its preliminary results for the twelve months ended 31 December 2019. 
 
Financial and Business Highlights for 2019 
 
  * Total turnover up 3% to GBP19.84m (2018: GBP19.29m). 
  * Profit before interest, tax and exceptional items of GBP1.03m (2018: GBP0.84m). 
    Exceptional loss of GBP0.42m (2018: Profit GBP0.92m). 
  * Consolidated group profit on ordinary activities before tax of GBP0.49m 
    (2017: GBP1.48m). 
  * Raceday attendances of 178,000 (2018: 173,000) despite two Saturday 
    racedays being abandoned. 
  * Conference & Events revenues increased by 25%. Event days fell by 13%, 
    although the average spend for those days increased by 45%, resulting in 
    fewer, more profitable events. 
  * 3% growth in Rocking Horse Nursery revenues through 6% increase in Nursery 
    occupancy levels and a 4% increase in income per session. 
  * 21% growth in The Lodge hotel turnover due to a 10% increase in occupancy 
    levels and a 3% increase in average room rate. 
 
Current Trading in 2020 
 
  * 2020 trading has been severely impacted by the COVID-19 pandemic and 
    Government nationwide lockdown in March. 
  * The Company was forced to cease all of it's racing, hotel and conference & 
    events trading activities on 17th March with racing resuming at Newbury on 
    11th June. To date the racecourse has hosted 6 racedays, all behind closed 
    doors, with the only income coming from Licenced Betting Offices and Media 
    rights. 
  * In response to COVID-19, the business has taken specific actions to protect 
    our financial position in both the short and long term, which includes a 
    reduction of the headcount as well as deferring repayment of the final loan 
    instalment to Compton Beauchamp Estates Limited. 
  * The Company is confident that it has the resources to trade through this 
    period within its revised current banking facilities. However, in light of 
    the present uncertainties created by the Covid-19 crisis, the Company is 
    unable to provide any future guidance on financial performance at this 
    time. 
 
Dominic Burke, Chairman of Newbury Racecourse plc commented: 
 
"Looking back, 2019 provided another fascinating and thrilling racing programme 
at Newbury with our highest paying attendance in five years, including two very 
successful Party in the Paddock events. The year saw further positive financial 
growth in a number of key areas of the business whilst we also completed the 
next stage of our redevelopment of the external heartspace areas of the 
racecourse. 
 
However, the current situation we now find ourselves in, due to the COVID-19 
pandemic, is very different for the country and our business. 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 2021, but we remain 
confident that the actions we have taken and committed to take will protect the 
business and our ability to trade as a going concern. 
 
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, as well as having 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." 
 
For further information please contact: 
 
Newbury Racecourse 
plc                                                                  Tel: 01635 
40015 
 
Julian Thick, Chief Executive 
 
Harriet Collins, Marcomms & Sponsorship Director 
 
Hudson Sandler 
 
Tel: 020 7796 4133 
 
Charlie Jack 
 
CHAIRMAN'S STATEMENT FOR THE YEAR END 31 DECEMBER 2019 
 
As I write this statement the news is still dominated by the ongoing 
coronavirus pandemic and the financial and operational impact this has had, and 
will continue to have, on the business. The British Horseracing Authority's 
decision to suspend all horseracing in the UK with effect from 17th March has 
been enormously disruptive to the business, and while we were delighted to be 
able to restart racing 'Behind Closed Doors' in June, the financial impact of 
the loss of a number of racedays and racing crowds has been severe. We continue 
to develop our detailed forecasts to help us to understand and respond to the 
constantly changing environment, but there remains significant uncertainty 
regarding the ongoing impact of Covid-19 on the business. It is our belief that 
these financial statements are properly prepared on a going concern basis. 
 
The major investment we have made into our racecourse facilities and 
infrastructure over recent years has been to position Newbury Racecourse for 
the future, in line with our strategic objective to be a modern and leading 
racecourse, entertainment and events business. We entered 2020 with ambitious 
targets and a clear strategy to drive further growth in our business and I am 
confident that the Company is in a secure position to trade through the current 
crisis. We will then be well placed to resume normal trading activities as soon 
as it is safe and permitted to do so. I cover this in more detail below. 
 
 
2019 Financial Performance 
 
 
Total turnover grew by 3% to GBP19.84m in 2019. We saw top line growth across all 
areas of the business, with a like for like increase in racing revenues of 2%, 
together with a 25% growth in our Conference and Events business (off the back 
of 22% growth in 2018). It was also a solid year for the Rocking Horse Nursery 
with a 3% revenue growth and a 21% increase in revenue generated from The Lodge 
hotel operation. 
 
Operating profits were GBP0.6m in the year (2018: GBP1.76m), which was net of 
exceptional losses of GBP0.4m (2018: exceptional profits GBP0.92m). Profit after 
tax was GBP0.63m (2018: GBP1.79m). 
 
 
Racing Highlights 
 
 
The 2019 racing programme was another fascinating and thrilling year with our 
highest paying attendance in five years, due mainly to two successful Party in 
the Paddock events. 
 
February's Betfair Saturday was regrettably abandoned as a result of the equine 
influenza outbreak, but it was an insured fixture, so the financial loss was 
partly mitigated. We were delighted to host the retiring Noel Fehily at our 
finale meeting at the end of March which saw most of Lambourn descend on 
Newbury to wish him well. 
 
The 2019 flat season got underway with the Dubai Duty Free Spring Trials 
Weekend and we were once again delighted to welcome Her Majesty The Queen for 
the afternoon. We achieved competitive renewals of both the Watership Down Stud 
Greenham Stakes as well as the Dubai Duty Free Stakes. Dubai Duty Free will 
celebrate their 25th year of sponsorship at Newbury in 2020 and we are so 
grateful for their continued support. The GBP750,000 Al Shaqab Lockinge Day was 
attended by over 11,200 racegoers, a 5% increase on last year. A fantastic card 
and a wide open Lockinge, made for competitive viewing, with the Sir Michael 
Stoute-trained, Mustashry, landing the spoils and narrowly beating the 
wonderful mare Laurens. Betting turnover was up on the day and strong viewing 
figures of over 700,000 on ITV's main channel was encouraging to see. We are 
once again grateful to Al Shaqab for their continued support of this race 
following a further five-year extension to their sponsorship announced at the 
end of July 2019. 
 
Returning visits from Tom Jones, who performed at the Weatherby's Super Sprint 
meeting in July, as well as Madness for our Hungerford meeting in August proved 
to be extremely popular with over 44,000 racegoers across the two events. 
 
As we turned to the Jumps once more, we were lucky to watch the popular stayer, 
Paisley Park begin his 2019/20 campaign in the Ladbrokes Long Distance Hurdle 
followed up with De Rasher Counter winning the Ladbrokes Trophy in fine style 
for trainer, Emma Lavelle. We were pleased to report a 3% increase on the 
previous year's attendance and this two-day meeting really does now signal the 
start of the Festive season for many. Positively, we also ended the year with 
increased attendances on Challow Hurdle Day which always has a family feel to 
it. 
 
The Development 
 
 
The re-modelling of the main parade ring and improvements to the areas behind 
the stands were completed during 2019 and we are delighted with the end result 
and the positive feedback from patrons. Works on the Annual Members' 
facilities, including an upgrade of the Carnarvon Room in the Berkshire Stand 
and the creation of a new dedicated members facility in the Hampshire Stand 
were also completed. The restoration and refurbishment of the Royal Box end of 
the Berkshire Stand is now very nearly complete and will mark the end of our 
major redevelopment of the racecourse heartspace and facilities. 
 
Our redevelopment has delivered a first class venue so 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 conference and hotel guests, nursery patrons and local 
residents. Our redevelopment will enable us to continue growing our 
 
already well diversified business activities and maximise the returns from our 
investment. 
 
The David Wilson Homes residential development continued through 2019 and is 
now into its final phase with approximately 1,000 of the total c.1,500 homes 
now built. 
 
Trading since March 2020 
 
Following the suspension of horse racing in Britain on 17th March, then 

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DJ Newbury Racecourse Plc Preliminary Results -2-

followed quickly by the government's 'lockdown' approach, the Company was 
forced to cease all of its trading activities encompassing our racing, hotel 
and conference events, whilst the children's nursery was only able to remain 
open for a very small number of children of key workers. The consequence of 
these actions has had a material negative impact on our trading and financial 
performance since that date. 
 
Throughout the shutdown period the Newbury team continued to work closely with 
all relevant parties and were ready to resume racing Behind Closed Doors 
("BCD") on 11th June. To date we have now hosted 6 BCD racedays and have been 
pleased to see betting shops able to reopen allowing much needed Licenced 
Betting Office and media rights revenue to resume, albeit at a reduced level. 
For transparency, as has always been the case, these income streams will be 
separately identifiable within the financial statements. 
 
The Rocking Horse Nursery reopened to a reduced number of children on 1st June 
and we are anticipating it being back up to 'run-rate' by the end of September 
following the Government's announcement to remove class size limits from 20th 
July. However, our other two businesses, The Lodge Hotel and our Conference and 
Events business remain closed and based on the current demand projections we 
are not expecting either of these to be able to generate positive cashflows 
until 2021. Also, whilst our normal trading has been disrupted, we have reacted 
quickly to launch our 'Pub in The Paddock' outdoor hospitality venue and Car 
Park Party events to help us re-activate our business. 
 
Financing and Liquidity 
 
We have fully drawn down the revolving credit facility provided by National 
Westminster Bank plc as our cash reserves have been depleted during the period 
of minimal income against a cost base which is relatively fixed to support our 
year-round operation. Whilst it has not been necessary to extend these bank 
facilities, we have agreed with the bank to remove the existing covenants and 
replacing them with a single measure, based on minimum liquidity levels, tested 
through to April 2022, by which time we expect to receive GBP10.9m (being the 
final amount in relation to the residential development at the racecourse) from 
David Wilson Homes, a wholly owned subsidiary of Barratt Developments plc. We 
have also agreed to extend the date for the final repayment of the loan to 
Compton Beauchamp Estates Limited from November 2020 to April 2022 which 
coincides with the date when we expect the final payment from David Wilson 
Homes. 
 
Outlook and Impact from Coronavirus 
 
As a result of our financial position, it will be some time until we can return 
to offering the levels of prize-money to which the industry has become 
accustomed. In 2019 our executive contribution to prizemoney (adjusted for 
abandonment days) was GBP2.27m, which on a like for like, full year basis, 
represents a near doubling of our executive contribution in 6 years. We are 
proud of this growth in executive contribution and are committed to returning 
to providing substantial levels of prizemoney in the future, but there 
inevitably needs to be a correction in the short to medium term until the 
Company returns to profitability. 
 
We are proud to be have played our part in helping the local West Berkshire 
community at this testing time, through our involvement supporting Age Concern 
with Meals on Wheels, preparing and delivering hot food for elderly people 
during the coronavirus crisis and also the NHS who we allowed to use, free of 
charge, our facilities as a local testing centre. 
 
Whilst the situation remains uncertain, the Board has taken and continues to 
evaluate a number of possible actions to balance the short-term conservation of 
cash with the long-term needs of the business. The specific actions we have 
taken to date include; 
 
           -                We have ceased all discretionary spending of both a 
revenue and capital nature. 
 
           -                Some 2/3rds of our employees have been placed on 
furlough, being the Government's Coronavirus Job Retention Scheme. Other staff, 
including the senior management team, have accepted a voluntary pay cut. 
 
           -                All Non-Executive Director fees have been waived 
for 2020. 
 
           -                A reorganisation and cost saving exercise has been 
undertaken leading to 19 staff (18% of the permanent workforce) being made 
redundant. 
 
The Board is confident that the Company has the financial resources to trade 
through this period. However, the financial impact of the cessation in racing 
and the loss of racegoer attendance until October 2020 at the earliest remains 
substantial. Typically, in a normal year, admissions, catering and hospitality 
raceday revenues represents c50% of the Company's turnover. These incomes have 
been severely curtailed. Understandably, this will result in the business 
reporting a substantial loss for 2020 compared with recent profits. 
 
In conclusion, 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 these 
extraordinary challenging times. 
 
Our sincere thanks, as ever, to all sponsors, owners, trainers, stable staff, 
members, racegoers and all customers for their ongoing support. 
 
 
DOMINIC J BURKE 
Chairman 
 
31 July 2020 
 
 
STRATEGIC REPORT 
 
STRATEGY AND OBJECTIVES 
 
The Board's long-term strategy is for Newbury Racecourse to be a profitable, 
leading racecourse, entertainment and events business, with racing at its core. 
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 also benefits from the sale of residential properties on the site, 
as part of its long-term development agreement with David Wilson Homes. 
 
PERFORMANCE REVIEW 
 
2019 was a year which saw continued positive financial growth in a number of 
key areas of the business, despite the challenging backdrop of declining LBO 
revenues and the ongoing operational challenges of the redevelopment. We were 
delighted to be named, once again, as one of the top racecourses in the UK by 
VisitEngland and, for the fifth consecutive year, to be awarded the Racecourse 
Association and VisitEngland Excellence Accolade for customer service. 
 
Racing 
 
The accounts include a total of 29 days racing (2018: 29) comprising 11 days 
National Hunt racing (2018: 11) and 18 days flat racing (2018: 18). Two days 
racing were unfortunately abandoned as a result of the equine flu outbreak in 
February and waterlogging in October (2018: 2 meetings abandoned). 
 
Overall raceday attendances in 2019 increased by 3% to 178,000 (2018: 173,000), 
with over 44,000 enjoying Tom Jones in July and Madness in August for the Party 
in the Paddock music events. 
 
May marked the fifth year of Al Shaqab's sponsorship of Lockinge Day, Newbury's 
richest race meeting, which was attended by more than 11,000 racegoers, being a 
5% increase on 2018's attendance. This meeting continues to be the flagship 
event in our flat racing calendar, with Al Shaqab confirming their continued 
support of this race following a further five?year extension to their 
sponsorship announced at the end of July 2019. 
 
Our longstanding association with the Dubai International Arabian Races 
Committee continued in 2019 and we were, once again, delighted to host its 
flagship UK race meeting at Newbury in July. 
 
Our cornerstone jump meeting, The Ladbrokes Winter Carnival, at the beginning 
of December, marked the third year of our five year partnership with Ladbrokes. 
We and the sponsors were pleased to once again see strong attendances across 
the two day meeting of almost 24,000, being a 3% increase on 2018's attendance. 
 
We maintained our total prizemoney for 2019 at GBP5 million but, like many other 
racecourses, we will need to manage carefully our future prizemoney 
commitments, as a result of both the ongoing expected decline in LBO revenues 
and the impact of the COVID?19 situation. We are grateful for the ongoing 
support of all our sponsors, with particular thanks to Al Shaqab Racing, 
bet365, Betfair, Betway, Dubai Duty Free and Ladbrokes for their investment in 
2019. 
 
Conference and Events 
 
The Conference & Events sales team have continued to focus on proactive selling 
and relationship building within key sectors, including automotive, telecoms 
and location filming and we were pleased to host a number of large and 
prestigious events during 2019. We saw good levels of growth in both enquiries 
and conversion rates and the redeveloped facilities have been well received by 
clients. 
 
 
Catering, Hospitality and Retail 
 
Our in?house catering operation continues to underpin the delivery of food and 
beverage retail activities across all of our businesses. Over recent years we 
have invested time and resource into improving the catering offer to our 
customers and we have seen improved spends per head and feedback as a result. 
During 2019 we undertook a fundamental review of our catering procurement and 
have significantly rationalised our supplier chain as a result, which will 
deliver both improved margins and efficiencies. 
 
The Rocking Horse Nursery 
 
The nursery had another strong year in 2019 and is a key contributor to the 
overall profitability of the business. It is now operating at near optimal 
capacity and the focus has therefore been on improving margins, whilst 
maintaining the very highest levels of care and early years learning standards, 
through continued investment in the equipment, facilities and staff training. 
 

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DJ Newbury Racecourse Plc Preliminary Results -3-

The Lodge 
 
The Lodge hotel operation has delivered good levels of growth over the last 
three years since opening to the general public and in 2019 we saw improvements 
in both average occupancy and average room rates. The Lodge continues to fulfil 
the important raceday requirement of providing accommodation to travelling 
stable staff, in addition to this it supports our conference, events and 
weddings business and has become a popular choice for many business travellers 
to the local area. 
 
We were pleased to secure planning consent for the permanent change of use for 
The Lodge during 2019, securing the future trading prospects of the hotel and 
giving us the option to extend the facility from its current 36 bedrooms to 80 
bedrooms at a future date, if viable. 
 
The Redevelopment 
 
The major development of the racecourse heartspace was largely completed in 
2019, with the works on the Annual Members facilities including an upgrade of 
the Carnarvon Room in the Berkshire Stand and the creation of a new dedicated 
members facility in the Hampshire Stand both completed. The restoration and 
refurbishment of the Royal Box, including new racing integrity (camera) 
positions and enhanced public facilities on the ground floor, commenced in the 
autumn of 2019 and were expected to take approximately 6 months to complete at 
an estimated cost of GBP2.5m. Works have been slightly delayed, but are expected 
to now be completed during the summer of 2020 and remain within budget. 
 
The David Wilson Homes (DWH) residential development continued to progress 
during 2019 with the Central Area apartments now fully completed and 100% sold 
and construction has continued in the Eastern Area. Approximately 1,000 homes 
out of the total c.1,500 are now built. Cash receipts from DWH from the sale of 
properties in 2019 were GBP1.09m. The final date for the balance of the 
guaranteed minimum land value to be paid by DWH is April 2022 and as at 31 
December 2019 the balance outstanding was GBP11.0m. 
 
FINANCIAL COMMENTARY 
 
Consolidated Group profit before tax in the year ended 31 December 2019 was GBP 
0.49m (2018: GBP1.48m) which includes GBP0.42m of exceptional losses (2018: GBP0.92m 
exceptional profits). 
 
Total turnover in 2019 increased by 3% (GBP0.55m) to GBP19.84m (2018: GBP19.29m). 
Overall racing revenues, excluding the impact of capital credits claimed, grew 
by 2% (GBP0.25m). Despite two abandonments in the year (2018: 2 abandonments) 
like for like growth in racing revenues was GBP0.27m (2%). Overall media and 
betting rights revenues decreased by c. GBP0.13m (3%), to GBP4.46m for the twelve 
months to 31 December 2019, as the anticipated impact of the government FOBT 
reform and subsequent reduction in Licenced Betting Offices (LBO) revenues 
started to take effect towards the end of 2019 and is expected to continue to 
decline into 2020, as previously reported. Conference and Events revenues 
increased by 25% (GBP0.26m) versus 2018, to GBP1.32m, primarily as a result of a 
44% increase in average spend per event. 
 
Our catering, hospitality and retail business saw overall year on year growth 
in revenues of 4%, GBP0.19m. Raceday catering revenues were 7% up on 2018 on a 
like for like basis, with conference catering revenues up 14% as a result of 
the improved Conference & Events business in the year. Rocking Horse Nursery 
turnover increased by 3% to GBP1.47m with gross operating profits of GBP0.50m, an 
improvement of 2% on 2018. Turnover for The Lodge, our on-site hotel, increased 
by 21% year on year to GBP0.86m, driven by an average occupancy increase of 10% 
and an improvement in average room rate of 3% across the year. Gross operating 
profits for The Lodge operation were GBP0.17m (2018: GBP0.10m). 
 
Total costs increased by 4% to GBP19.20m (2018: GBP18.45m). Administration expenses 
were broadly in line with 2018 at GBP2.98m, however overall Gross Profit margin 
was approximately 2% worse than 2018, largely as a result of higher music 
artist costs, increased business rates, utility costs and grounds maintenance. 
 
The fair value gain in the Profit & Loss of GBP0.39M is in respect of investment 
property (commercial land) owned by the Group, which was revalued during the 
year to reflect benchmarked local market commercial land values. 
 
 
Exceptional losses during 2019 were GBP0.42m (2018: GBP0.92m exceptional profits) 
being the movement in the fair value of the DWH debtor. 
 
 
Overall operating profit before interest was GBP0.60m (2018: GBP1.76m). The tax 
credit of GBP0.15m (2018: credit GBP0.31m) relates to the movement in deferred tax 
during the period. Profit after tax was GBP0.63m (2018: GBP1.79m). 
 
The decrease in cash reserves of GBP0.95m in the period (2018: GBP2.89m decrease) 
includes GBP2.80m of cash generated from operating activities, GBP1.09m of cash 
receipts from DWH in respect of properties sold in the period and is net of GBP 
2.86m of capital expenditure, together with GBP2.47m of scheduled loan 
repayments. 
 
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 178,000 (2018: 173,000). Operating profit is shown within the 
profit and loss account on page 17 and cash generated from trading activities 
is shown within the consolidated statement of cashflows on page 24. 
 
PRINCIPAL RISKS AND UNCERTAINTIES 
 
 
Impact of COVID?19 
The current global pandemic and the necessary restrictions this has placed upon 
business activities and public movement, creates huge uncertainties for trading 
in 2020. The Company's response to this risk is covered below as well as in the 
Chairman's Statement and the Going Concern Basis of Preparation. 
 
 
Cashflow Risk 
The main cash flow risks, under normal trading circumstances, are the 
vulnerability of race meetings to abandonment due to adverse weather conditions 
and fluctuating attendances particularly for the Party in the Paddock events, 
together with the 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, largely 
mitigates the raceday risk. Regular review of variable conferencing costs 
reduces the impact of a decline in conference sales. The timing and amount of 
receipts from David Wilson Homes is dependent upon the rate of sales of 
residential plots. The risk of delayed receipts is mitigated to some extent by 
the long stop dates in the sale agreement, in respect of the minimum guaranteed 
land value. Short term cash flow risk is mitigated by regular review of the 
expected timing of receipts and by ensuring that the Group has committed 
facilities 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. The David Wilson 
Homes debtor is backed by a parent company guarantee from Barratt Developments 
plc. 
 
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 and thorough review of the Group's cash flow 
forecasts and associated risks and sensitivities, over the next twelve months 
and through to the David Wilson Homes longstop receipt date in April 2022. The 
extent of this review reflects the current economic climate, particularly 
COVID-19, as well as specific financial circumstances of the Group. 
 
Base Case Scenario 
 
The Board reviews the cash flow and working capital requirements in detail on a 
frequent basis, whilst under the current COVID-19 circumstances the regularity 
of this scrutiny has increased. Key trading assumptions made within the cash 
flow projections base case scenario include: 
 
*            Racing taking place behind closed doors for the remainder of the 
2020 flat season with capped attendance for the National Hunt racing season 
through to Spring 2021. Further capping is anticipated, but at a higher level, 
for the 2021 flat season, whilst we expect racing and crowds to return to their 
normal levels during Summer 2021. Newbury has already held three race days in 
June and will hold an additional three in July and two in August this year, all 
behind closed doors. 
 
*            The three planned 2020 Party in the Paddock concerts will not take 
place and one during 2021 is expected to be lost. 
 
*            Licenced Betting Offices have already re-opened on 15th June but 
will provide lower revenue streams than planned for the remainder of this year 
and into 2021. 
 

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DJ Newbury Racecourse Plc Preliminary Results -4-

*            The Hotel and Conference & Events businesses will not generate any 
further revenue during 2020 and both areas will expect to trade at break-even 
in 2021. 
 
*            Following its provision for key workers only, the Nursery was able 
to re-open on 1st June at a lower capacity. However, the business has been able 
to charge a proportion of fees to allow others to retain their places. Within 
our scenario, full operation will return from 1st September 2020, on a phased 
basis, with full levels of profitability returning from the start of 2021. 
 
Alongside these trading businesses the following additional actions have been 
taken: 
 
*            Since the March lockdown, overheads have been reduced to the 
minimum required to keep the respective sites functioning whilst all 
facilities, except the Nursery, remained closed. 
 
*            Newbury has taken advantage of the Government's Coronavirus Job 
Retention Scheme and furloughed two thirds of permanent salaried employees from 
late March as well as obtaining business rate relief through to March 2021. 
 
*            Many of those staff who have been retained to work agreed to 
accept voluntary pay cuts through to the end of September 2020. 
 
*            A restructuring of the organisation was implemented during July 
which will reduce the on-going overhead costs substantially and allow the 
business to flex the workforce as, and when, the trading position improves. 
 
*            Agreement has been confirmed with NatWest Bank on the waiving of 
existing financial covenants relating to the fully drawn GBP6m credit facility, 
and instead replacing them with a single minimum liquidity level covenant of GBP 
600,000. 
 
*            The final loan payment due to Compton Beauchamp Estates in 
November 2020 has been deferred until April 2022. The final minimum land 
payment of GBP10.9m due from David Wilson Homes (and guaranteed by Barratt 
Developments plc) is expected to be received by April 2022. 
 
*            Progression of the disposal of previously targeted non-core assets 
has continued. 
 
*            2020 Capex has been restricted to only that already committed plus 
a contingency allowance. 2021 Capex reduced to GBP250,000 (currently 
uncommitted). All non-essential expenditure has been ceased. 
 
Severe but plausible downside Scenario 
 
The impact of COVID-19 is constantly being assessed and the situation (along 
with Government support) is subject to continual change. This makes it very 
difficult to assess with any certainty how the situation will evolve. However, 
the easing of the Government's lockdown has meant that the racing and 
hospitality businesses as well as our nursery operations have been able to plan 
accordingly. Whilst the board is confident that the assumptions used in the 
base case are reasonable, mitigating plans have been developed should there be 
any substantially adverse change to the anticipated liquidity over the period. 
 
This severe but plausible downside scenario considers the potential of a 
'second spike' of COVID-19. Under this scenario racing will remain behind 
closed doors for the remainder of 2020, with no crowds possible until the start 
of next year. If LBO's are required to close under specific circumstances, such 
as regionally, then we have modelled that this income reduces to c60% of 
current forecasts through to the end of 2020. We have also considered that the 
nursery will revert back to supporting key workers only for a period of 3 
months. In addition to this, the sale of the previously identified non-core 
asset has also been removed from the downside scenario. 
 
In the unlikely scenario that these events do all occur, additional mitigation 
plans have been put in place and will be implemented, if required, in order to 
ensure that sufficient headroom for liquidity and covenant can continue to be 
achieved. 
 
These include: 
 
*            A further substantial reduction to 2020 and 2021 Capex to exclude 
all but committed Capex. 
 
*            Bonuses & LTIP payments being deferred until the cash position is 
deemed sufficient. 
 
*            Further salary and management structure contingencies being 
executed including the extension of voluntary wage reductions by the senior 
management team throughout 2021. 
 
*            A reduction to prize money and food & beverage facilities provided 
on race days (once resumption takes effect). 
 
Other mitigation measures are possible but have not been included in the severe 
but plausible downside scenario. The Company has the ability to draw on funding 
options provided by the racing industry and would accelerate the evaluation of 
a number of material non-core assets for potential disposal. If a second spike 
does occur, then it is assumed that the Government will extend financial 
support to businesses. 
 
The Group has committed credit facilities, which are in place as an effective 
bridging facility through to April 2022, and the Board has concluded that it 
has a reasonable expectation that the Group and parent company has adequate 
resources, banking facilities and arrangements in place to continue in 
operational existence for the foreseeable future and therefore the going 
concern basis has been adopted in preparing the financial statements. 
 
Nonetheless, as at the date of this report, the possible impact of COVID-19 
provides a level of uncertainty as the situation for the racing industry and 
our other businesses continually changes. The Board continues to monitor this 
routinely and to develop detailed forecasts in response to the changing 
environment and through reviews of mitigation and contingency plans. 
 
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. 
 
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 2019 is 4% (2018: 3%) of the 
amounts invoiced by suppliers during the year. This percentage, expressed as a 
proportion of the number of days in the year, is 16 days (2018: 10 days). 
 
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 GBP5,905 to 
national charities (2018: GBP3,560). 
 
This report was approved by the board and signed on its behalf by: 
 
 
J M Thick 
Chief Executive 
 
31 July 2020 
 
 
 
     Sponsors in the year to 31 December 2019 
 
We would like to thank our leading sponsors for their significant support in 
2019; 
 
Al Shaqab 
 
Betfair 
 
British European Breeders Fund 
 
Dubai Duty Free 
 
Molson Coors 
 
Ladbrokes 
 
Marsh JLT Specialty Ltd 
 
 
We also received much appreciated support from the following sponsors; 
 
137 Gin Distillery 
                                                                     Irish 
Thoroughbred Marketing 
 
Agetur 
Irwin Mitchell Private Wealth 
 
Archie Watson Racing 
               Kennet Shopping 
 
Awdry Bailey and Douglas 
KKA Architecture 
 
Be Wiser 
Insurance 
Mansion Bet 
 
Bet 
Victor 
Matthew Fedrick Farriers 
 
bet365 
Melbourne 10 
 
Betway 
Mencap West Berkshire 
 
BJP 
Insurance 
Mildmay Farm 
 
Bloor 
Homes 
Mirage Signs 
 
Bridget 
Drew 
Newbury BID 
 
British Horse 
Society                                                               Newbury 
Weekly News 
 
Byerley 
Stud 
Oakgrove Stud 
 
Calder and Grandidge 
               Oakley Coach Builders 
 
Christopher Smith Associates 
Pertemps Network 
 
Churchill Retirement Living 
Pimms 
 
Coln Valley 
Stud 
Powersolve Electronics 
 
Comax 
Premier Food Courts 
 
Compton Beauchamp 
Prodec Networks Ltd 
 
Conundrum Consulting 
Pump Technology 
 
CoverMarque 
 
Raynor Bosch 
 
Crossland Employment Solicitors                                         Regus 
 
CSP 
                                                          Relyon Cleaning 
 
Denford 
Stud 
Ross Brooke Chartered Accountants 
 
Dreweatts 
Rossdales Veterinary Surgeons 
 
Enotria & 
Coe 
Sir Peter O'Sullevan Trust 
 
Equine 
Productions 
SIS 
 
European Breeders Fund 
South Downs Water 
 
Event Bar Management 
Spinal Injuries Association 
 
Freixenet Copestick 
Ltd                                                          Starlight 
Children's Charity 
 
Frontier 
               The Energy Check 
 
Goffs 
UK 
The Mortgage Branch 
 
Greatwood Charity 
                                           Thatcham Butchers 
 
Grundon Waste Management 
Thoroughbred Breeders Association 
 
Haynes Hanson and Clark                                                      TT 
Tents 
 
Heatherwold Stud 
               Unibet 
 
Horatio's Garden 
               Watership Down Stud 
 
Horris Hill 
School 
Weatherbys Bank 
 
Hot to Trot Racing 
               West Berkshire Brewery 
 
 
InDzine 
               West Berkshire Racing Club 
 
 
               William Hill 
 
There were also 9 races sponsored for birthdays, retirement or in memoriam. 
 
CONSOLIDATED PROFIT AND LOSS ACCOUNT 
 
YEAR ENDED 31 DECEMBER 2019 
 

(MORE TO FOLLOW) Dow Jones Newswires

July 31, 2020 08:22 ET (12:22 GMT)

DJ Newbury Racecourse Plc Preliminary Results -5-

                                                               2019                           2018 
 
Note                                                           GBP000                           GBP000 
 
                                                         4                       19,841                         19,295 
Turnover 
 
                                                                              (16,220)                       (15,478) 
Cost of sales 
 
 
Gross profit                                                                       3,621                          3,817 
 
                                                                                (2,983)                        (2,974) 
Administrative expenses 
 
                                                         15                           388 
Gain on revaluations                                                                          - 
 
                                                         5                         (422) 
Net exceptional items                                                                         915 
 
                                                         6 
Operating profit                                                                      604                         1,758 
 
                                                         8                                 7 
Interest receivable                                                                           12 
 
                                                         9                         (126) 
Interest payable                                                                              (287) 
 
 
Profit before tax                                                                     485                         1,483 
 
                                                         10                           145 
Tax on profit                                                                                 309 
 
 
Profit for the financial year                                                         630                         1,792 
 
                                                                                      630                         1,792 
Owners of the parent 
 
 
 
Profit per share (basic and diluted) (Note 12) 
 
 
             18.8p          53.5p 
 
All amounts derive from continuing operations 
 
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 
 
YEAR ENDED 31 DECEMBER 2019 
 
                                                                 2019                           2018 
 
                                                    Note         GBP000                           GBP000 
 
                                                                                        630                         1,792 
 
Profit for the financial year 
 
 
Other comprehensive income 
 
                                                                                     (407)                             418 
 
Remeasurement of the net defined benefit schemes 
 
                                                                                           69                          (71) 
Deferred tax on actuarial (loss)/gain current year charge 
 
                                                                                             4                          - 
Deferred tax prior year adjustment 
 
 
Other comprehensive (loss)/income for the year                                       (334)                             347 
 
 
Total comprehensive income for the year                                                 296                         2,139 
 
 
 
 
 
 
CONSOLIDATED BALANCE SHEET 
 
AS AT 31 DECEMBER 2019 
 
                                                                     2019                                                   2018 
 
Note                                                                 GBP000                                                   GBP000 
 
 
Fixed assets 
 
Tangible assets                    13                                                  40,218                                                 38,490 
 
Investments                        14                                                       117 
                                                                                                                            117 
 
Investment property                15                                                    1,500                                                  1,112 
 
 
                                                                                       41,835                                                 39,719 
 
Current assets 
 
Stocks                             16                        272 
                                                                                                    250 
 
Debtors: amounts falling due       17                   13,384 
after more than one year                                                                            13,403 
 
Debtors: amounts falling due       17                     4,655 
within one year                                                                                     6,676 
 
Cash at bank and in hand                                  1,269 
                                                                                                    2,223 
 
 
                                                        19,580 
                                                                                                    22,552 
 
                                   18                  (5,884) 
Creditors: amounts falling due                                                                      (5,110) 
within one year 
 
 
Net current assets                                                                     13,696                                                 17,442 
 
 
Total assets less current                                                              55,531                                                 57,161 
liabilities 
 
                                   19                                                        -                                               (2,471) 
Creditors: amounts falling due 
after more than one year 
 
 
Provisions for liabilities 
 
Provisions                         21                                                 (3,561)                                                (3,270) 
 
Pension liability                  24                                                 (1,019) 
                                                                                                                            (747) 
 
 
Net assets                                                                             50,951                                                 50,673 
 
Capital and reserves 
 
Called up share capital            23                                                       335 
                                                                                                                            335 
 
Share premium                                                                          10,202                                                 10,202 
 
Revaluation reserve                23                                                          75 
                                                                                                                            75 
 
Capital redemption reserve         23                                                       143 
                                                                                                                            143 
 
Profit and loss account                                                                40,126                                                 39,830 
 
 
Shareholders' funds                                                                    50,881                                                 50,585 
 
 
Capital grants 
 
Deferred capital grants            25                                                          70 
                                                                                                                            88 
 
 
                                                                                       50,951                                                 50,673 
 
 
The financial statements were approved and authorised for issue by the Board of 
Directors and were signed on its behalf by: 
 
D J Burke                                J M Thick 
 
Chairman                                 Director 
 
 
 
 
 
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 
 
YEAR ENDED 31 DECEMBER 2019 
 
                     Called up share capital      Share premium account        Capital redemption reserve   Revaluation reserve          Profit and loss account      Total equity 
 
                     GBP000                         GBP000                         GBP000                         GBP000                         GBP000                         GBP000 
 
                                           335                    10,202                             143                            75                   39,830                       50,585 
At 1 January 2019 
 
                                            -                            -                            -                            -                           630                          630 
Profit for the year 
 
                                            -                            -                            -                            -                        (334)                        (334) 
Other comprehensive 
loss 
 
 
                                           335                    10,202                             143                            75                   40,126                       50,881 
At 31 December 2019 
 
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 
 
YEAR ENDED 31 DECEMBER 2018 
 

(MORE TO FOLLOW) Dow Jones Newswires

July 31, 2020 08:22 ET (12:22 GMT)

DJ Newbury Racecourse Plc Preliminary Results -6-

                     Called up share capital      Share premium account        Capital redemption reserve   Revaluation reserve          Profit and loss account      Total equity 
 
                     GBP000                         GBP000                         GBP000                         GBP000                         GBP000                         GBP000 
 
                                           335                    10,202                             143                            75                   37,691                       48,446 
At 1 January 2018 
 
                                            -                            -                            -                            -                       1,792                        1,792 
Profit for the year 
 
                                            -                            -                            -                            -                           347                          347 
Other comprehensive 
income 
 
 
                                           335                    10,202                             143                            75                   39,830                       50,585 
At 31 December 2018 
 
 
 
 
 
 
CONSOLIDATED CASH FLOW STATEMENT 
 
YEAR ENDED 31 DECEMBER 2019 
 
                                                              2019                           2018 
 
                                                              GBP000                           GBP000 
 
Cash flows from operating activities 
 
                                                                                     630                         1,792 
Profit for the financial year 
 
 
Adjustments for: 
 
Exceptional items                                                                    422                          (915) 
 
Amortisation of capital grants                                                       (18)                           (18) 
 
Depreciation charges                                                              1,056                             905 
 
Interest paid                                                                        126                            287 
 
Interest received                                                                      (7)                          (12) 
 
Tax credit                                                                        (145)                           (309) 
 
(Increase) in stocks                                                                 (22)                           (47) 
 
Decrease in debtors                                                               1,001                          2,374 
 
Increase/(decrease) in creditors                                                     291                          (440) 
 
Net fair value (gains)/losses recognised in P&L                                   (388)                              - 
 
Corporation tax paid                                                                  -                             (78) 
 
Other associated property receipts                                                      12                             40 
 
Pension top up payments                                                           (163)                              - 
 
 
Net cash generated from operating activities                                      2,795                          3,579 
 
 
Cash flows from investing activities 
 
Receipts from David Wilson Homes                                                  1,086                          3,252 
 
Purchase of fixed assets                                                       (2,855)                        (6,011) 
 
Sale of tangible fixed assets                                                             1                          - 
 
Other associated property costs                                                       -                           (647) 
 
Interest received                                                                         7                            12 
 
 
Net cash from investing activities                                             (1,761)                        (3,394) 
 
 
 
Cash flows from financing activities 
 
Receipt of new bank loan                                                             500                             - 
 
Repayment of CBEL loan                                                         (2,472)                        (3,000) 
 
British Championship loan repayment                                                       9                            11 
 
Loan finance issued                                                                   -                             (69) 
 
Interest paid                                                                        (25)                           (11) 
 
 
Net cash used in financing activities                                          (1,988)                        (3,069) 
 
 
Net (decrease) in cash and cash equivalents                                       (954)                       (2,884) 
 
                                                                                  2,223                          5,107 
Cash and cash equivalents at beginning of year 
 
 
Cash and cash equivalents at the end of year                                      1,269                          2,223 
 
 
Cash and cash equivalents at the end of year comprise: 
 
                                                                                  1,269                          2,223 
Cash at bank and in hand 
 
 
 
 
                                                                                  1,269 
                                                                                             2,223 
 
 
 
 
1.   NOTES TO THE FINANCIAL STATEMENTS 
     YEAR ENDED 31 DECEMBER 2019 
 
     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 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: 
 
 
* The reconciliation of the number of shares outstanding from the beginning to 
the end of the period has not been included a second time; and 
* 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 and estimates 
with a significant risk of material adjustment in the next year 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 and thorough review of the Group's cash flow 
forecasts and associated risks and sensitivities, over the next twelve months 
and through to the David Wilson Homes longstop receipt date in April 2022. The 
extent of this review reflects the current economic climate, particularly 
COVID-19, as well as specific financial circumstances of the Group. 
 
Base Case Scenario 
 
The Board reviews the cash flow and working capital requirements in detail on a 
frequent basis, whilst under the current COVID-19 circumstances the regularity 
of this scrutiny has increased. Key trading assumptions made within the cash 
flow projections base case scenario include: 
 
*       Racing taking place behind closed doors for the remainder of the 2020 
flat season with capped attendance for the National Hunt racing season through 
to Spring 2021. Further capping is anticipated, but at a higher level, for the 
2021 flat season, whilst we expect racing and crowds to return to their normal 
levels during the Summer. Newbury has already held three race days in June and 
will hold an additional three in July and two in August this year, all behind 
closed doors. 
 
*       The three planned 2020 Party in the Paddock concerts will not take 
place and one during 2021 is expected to be lost. 
 
*       Licenced Betting Offices have already re-opened on 15th June but will 
provide lower revenue streams than planned for the remainder of this year and 
into 2021. 
 
*       The Hotel and Conference & Events businesses will not generate any 
further revenue during 2020 and both areas will expect to trade at break-even 
in 2021. 
 
*       Following its provision for key workers only, the Nursery was able to 
re-open on 1st June at a lower capacity. However, the business has been able to 
charge a proportion of fees to allow others to retain their places. Within our 
scenario, full operation will return from 1st September 2020, on a phased 
basis, with full levels of profitability returning from the start of 2021. 
 
Alongside these trading businesses the following additional actions have been 
taken: 
 

(MORE TO FOLLOW) Dow Jones Newswires

July 31, 2020 08:22 ET (12:22 GMT)

DJ Newbury Racecourse Plc Preliminary Results -7-

*       Since the March lockdown, overheads have been reduced to the minimum 
required to keep the respective sites functioning whilst all facilities, except 
the Nursery, remained closed. 
 
*       Newbury has taken advantage of the Government's Coronavirus Job 
Retention Scheme and furloughed two thirds of permanent salaried employees from 
late March as well as obtaining business rate relief through to March 2021. 
 
*       Many of those staff who have been retained to work agreed to accept 
voluntary pay cuts through to the end of September 2020. 
 
*       A restructuring of the organisation was implemented during July which 
will reduce the on-going overhead costs substantially and allow the business to 
flex the workforce as, and when, the trading position improves. 
 
*       Agreement has been confirmed with NatWest Bank on the waiving of 
existing financial covenants relating to the fully drawn GBP6m credit facility, 
and instead replacing them with a single minimum liquidity level covenant of GBP 
600,000. 
 
*       The final loan payment due to Compton Beauchamp Estates in November 
2020 has been deferred until April 2022. The final minimum land payment of GBP 
10.9m due from David Wilson Homes (and guaranteed by Barratt Developments plc) 
is expected to be received by April 2022. 
 
*         Progression of the disposal of previously targeted non-core assets 
has continued. 
 
*       2020 Capex has been restricted to only that already committed plus a 
contingency allowance. 2021 Capex reduced to GBP250,000 (currently uncommitted). 
All non-essential expenditure has been ceased. 
 
Severe but plausible downside Scenario 
 
The impact of COVID-19 is constantly being assessed and the situation (along 
with Government support) is subject to continual change. This makes it very 
difficult to assess with any certainty how the situation will evolve. However, 
the easing of the Government's lockdown has meant that the racing and 
hospitality businesses as well as our nursery operations have been able to plan 
accordingly. Whilst the board is confident that the assumptions used in the 
base case are reasonable, mitigating plans have been developed should there be 
any substantially adverse change to the anticipated liquidity over the period. 
 
This severe but plausible downside scenario considers the potential of a 
'second spike' of COVID-19. Under this scenario racing would remain behind 
closed doors for the remainder of 2020, with no crowds possible until the start 
of next year. If LBO's are required to close under specific circumstances, such 
as regionally, then we have modelled that this income reduces to c60% of 
current forecasts through to the end of 2020. We have also considered that the 
nursery will revert back to supporting key workers only for a period of 3 
months. In addition to this, the sale of the previously identified non-core 
asset has also been removed from the downside scenario. 
 
In the unlikely scenario that these events do all occur, additional mitigation 
plans have been put in place and will be implemented, if required, in order to 
ensure that sufficient headroom for liquidity and covenant can continue to be 
achieved. 
 
These include: 
 
*         A further substantial reduction to 2020 and 2021 Capex to exclude all 
but committed Capex. 
 
*         Bonuses & LTIP payments being deferred until the cash position is 
deemed sufficient. 
 
*       Further salary and management structure contingencies being executed 
including the extension of voluntary wage reductions by the senior management 
team throughout 2021. 
 
*       A reduction to prize money and food & beverage facilities provided on 
race days (once resumption takes effect). 
 
Other mitigation measures are possible but have not been included in the severe 
but plausible downside scenario. 
 
The Company has the ability to draw on funding options provided by the racing 
industry and would accelerate the evaluation of a number of material non-core 
assets for potential disposal.  If a second spike does occur, then it is 
assumed that the Government will extend financial support to businesses. 
 
The Group has committed credit facilities, which are in place as an effective 
bridging facility through to April 2022, and the Board has concluded that it 
has a reasonable expectation that the Group and parent company has adequate 
resources, banking facilities and arrangements in place to continue in 
operational existence for the foreseeable future and therefore the going 
concern basis has been adopted in preparing the financial statements. 
 
Nonetheless, as at the date of this report, the possible impact of COVID-19 
provides a level of uncertainty as the situation for the racing industry and 
our other businesses continually changes. The Board continues to monitor this 
 
routinely and to develop detailed forecasts in response to the changing 
environment and through reviews of mitigation and contingency plans. 
 
     2.4 Revenue recognition 
 
Services rendered, raceday income including admissions, catering revenues, 
sponsorship and licence fee income is recognised on the relevant raceday. 
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. 
 
Sale of goods, revenue is recognised for the sale of food and liquor when the 
transaction occurs. 
 
Property receipts 
 
Property receipts are recognised in accordance with the substance of the 
transaction being that of an exceptional sale of land. 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 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 Investment property 
 
Investment in properties are freehold interests which are held to earn rental 
income. Investment properties are recognised at fair value. Fair value is 
determined based upon benchmarked, local commercial land values and supported 
by the opinion of an independent expert valuer. Any gains or losses on 
revaluation are recognised in the profit & loss account. 
 
     2.6 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. 
 
     2.7 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. 
 
     2.8 Lease assets receivable 
 
Lease assets receivable relates to freeholds that the Group has acquired, or 
has the option to acquire, 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, lessors 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 lessor, the Group does not recognise a fixed asset in relation to 
the freehold. Since the Group's principal interest in the freehold is limited 
to the expected future cashflows arising from the ground rent, the Group's cost 
of investment represents the cost to acquire the future ground rent cashflows. 
 
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 with David Wilson Homes. 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 leases 
receivables are monitored for indications of impairment by comparing the net 
present value of future rentals receivable to the carrying value of the lease 
receivable. Where there is a shortfall in the present value of the future 
rentals receivable, an impairment of the carrying value of the lease receivable 
is recognised. 
 
     2.9 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      2% ? 5% straight line 
               outdoor fixtures 
 
               Tractors and motor          5% ? 10% straight line 
               vehicles 
 
               Fixtures, fittings and      2% ? 25% straight line 
               equipment 
 
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. 
 

(MORE TO FOLLOW) Dow Jones Newswires

July 31, 2020 08:22 ET (12:22 GMT)

DJ Newbury Racecourse Plc Preliminary Results -8-

     2.10 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. 
 
Non?financial assets 
The carrying amounts of the entity's non?financial assets are reviewed at each 
reporting date to determine whether there is any indication of impairment. If 
any such indication exists, then the asset's recoverable amount is estimated. 
The recoverable amount of an asset or cash?generating unit is the greater of 
its value in use and its fair value less costs to sell. In assessing value in 
use, the estimated future cash flows are discounted to their present value 
using a pre?tax discount rate that reflects current market assessments of the 
time value of money and the risks specific to the asset. For the purpose of 
impairment testing, assets that cannot be tested individually are grouped 
together into the smallest group of assets that generates cash inflows from 
continuing use that are largely independent of the cash inflows of other assets 
or groups of assets (the "cash?generating unit"). 
 
An impairment loss is recognised if the carrying amount of an asset or its CGU 
exceeds its estimated recoverable amount. Impairment losses are recognised in 
profit or loss. Impairment losses recognised in respect of CGUs are allocated 
first to reduce the carrying amount of any goodwill allocated to the units, and 
then to reduce the carrying amounts of the other assets in the unit (group of 
units) on a pro rata basis. 
 
Impairment losses recognised in prior periods are assessed at each reporting 
date for any indications that the loss has decreased or no longer exists. An 
impairment loss is reversed only to the extent that the asset's carrying amount 
does not exceed the carrying amount that would have been determined, net of 
depreciation or amortisation, if no impairment loss had been recognised. 
 
     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 Non recognised financial information 
 
The profit and loss account includes measures which are not accounting measures 
under UK GAAP which are used to assess the financial performance of the 
business. These measures which are termed 'non?GAAP' include reference to 
EBITDA within the Strategic Report. 
 
     2.14 Cash and cash investments 
 
Cash is represented by cash in hand and deposits with financial institutions 
repayable without penalty on notice of not more than 24 hours. 
 
Cash which is held on deposits that are not accessible with less than 24 hours' 
notice, is deemed to not be liquid and is therefore classified as cash 
investments on the balance sheet. 
 
     2.15 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. 
 
     2.16 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. 
 
     2.17 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 (other than 
goodwill) or liability is recognised in a business combination and the 
corresponding amount that can be deducted or assessed for tax.  Goodwill is 
adjusted by the amount of such deferred 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. 
 
     2.18 Grants 
 
Capital grants 
Capital grants received, apart from HBLB grants, 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. 
 
Horserace Betting Levy Board (HBLB) grants 
The HBLB provides funding to racecourses which is used to support racing 
activities. HBLB grants are accounted for under the performance model in line 
with standard industry practice. HBLB grants are credited to the Profit and 
Loss Account as revenue in the month of the raceday, the corresponding debtor 
is carried on the Balance Sheet until the cash is received. 
 
     2.19 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 

(MORE TO FOLLOW) Dow Jones Newswires

July 31, 2020 08:22 ET (12:22 GMT)

DJ Newbury Racecourse Plc Preliminary Results -9-

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. 
 
     2.20 Borrowing 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. 
 
     2.21 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 plus 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. 
 
     2.22 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 5 for further detail. 
 
 
3.   Judgments in applying accounting policies 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. 
 
Critical judgements in applying the Group's accounting policies 
The following are the critical judgements, apart from those involving 
estimations (which are dealt with separately below), 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; 
 
Capitalisation of design fees and expenditure in connection with the ongoing 
development works, which during the year ended 31 December 2019 amounted to GBP 
0.2m (2018: GBP0.4m). The total carrying value of capitalised design fees at 31 
December 2019 is GBP1.7m. In the directors' view these costs are directly 
attributable to the development of a long term fixed asset which will provide 
future economic benefits in excess of its carrying value. 
 
Estimation techniques 
Significant estimation techniques include: 
 
David Wilson Homes 
The fair value of the long term David Wilson Homes debtor balance 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. 
 
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 GBP41.7 million. No 
impairment loss was recognised in 2019 as there was no further indication of 
impairment required (2018: no impairment loss). 
 
 
 
 
4.    EXCEPTIONAL ITEMS 
 
                                                           2019                           2018 
 
                                                           GBP000                           GBP000 
 
                                                                                    (3)                            (2) 
 
      Net book value of asset disposal 
 
                                                                                   -                          1,500 
      Release of property provision 
 
      Pall Mall development costs                                                  -                           (596) 
 
                                                                               (419)                                13 
      DWH debtor movement in fair value 
 
 
                                                                               (422)                             915 
 
 
 
     In accordance with note 2, accounting transactions related to the DWH 
     agreement are considered outside the ordinary course of business. The fair 
     value loss recognised in 2019 includes an amount of GBP475k which relates to the 
     prior year end. 
 
     The release of the property provision is in connection with the ongoing 
     obligations related to the sale of land and redevelopment of the racecourse. 
     The Pall Mall costs are professional fees connected to the aborted development 
     project. 
 
 
 
     PROFIT PER SHARE 
5. 
 
Basic and diluted profit per share is calculated by dividing the profit 
attributable to ordinary shareholders for the year ended 31 December 2019 of GBP 
630,000 (2018: GBP1,792,000) by the weighted average number of ordinary shares 
during the year of 3,348,326 (2018: 3,348,326). 
 
NOTES 
 
The financial information set out above does not constitute the company's 
statutory accounts for the years ended 31 December 2019 or 2018, but is derived 
from those accounts. Statutory accounts for 2018 have been delivered to the 
Registrar of Companies and those for 2019 will be delivered following the 
company's annual general meeting. The auditors have reported on those accounts; 
their reports were unqualified, did not draw attention to any matters by way of 
emphasis without qualifying their report and did not contain statements under 
s498(2) or (3) Companies Act 2006. 
 
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. 
 
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 31 July 
2020 
 
 
 
END 
 

(END) Dow Jones Newswires

July 31, 2020 08:22 ET (12:22 GMT)