For Tony Harris, the economic downturn had a relatively muted impact on listed race course operator Arena Leisure (LON:ARE), thanks to the hardy nature of UK race goers. For the company’s finance director, more concerning is the parlous state of the racing levy – the tax on bookies that is channelled back into racecourses – which is receding fast as operators move offshore. Nevertheless, Harris is confident that Arena is well placed to flourish, regardless of how the industry settles its funding problems and last week reported interim revenues broadly flat at £30.1m while pre-tax profits soared by 25% to £2.0m. With the recent opening of a major new hotel complex at Arena’s course at Lingfield Park, combined with rising revenues from broadcasting rights, Harris is now eyeing even more portfolio upgrades and expansion.

Tony, could you just give us a summary of the Arena Leisure business and the proportion of UK racing that you host?

Arena Leisure is a UK stockmarket listed company that has horse racing very much at its heart. We own and operate seven race courses. There are 60 race courses in the UK but on our seven we stage more than a quarter of all the UK’s racing fixtures. We can do that because we own three out of the four UK all-weather tracks, including Lingfield, Southwell and Wolverhampton, with the Jockey Club owning the fourth at Kempton. It is really not unusual for an all-weather track to race 100 times a year as opposed to a turf track where obviously the grass needs to recover and so they may only race up to 30 times in a year.

Arena as a business, which is seen as very much at the commercial end of the horse race course business, has had a strategy over the last few years of developing our operational business. We have done that through a number of initiatives, particularly bringing our own catering operation in-house. We’ve done that now for three years very successfully and it’s growing very, very well. We are also exploiting some of the real estate opportunities on our 1,000 acres of land where we have been successful in obtaining planning permission for hotels at Lingfield Park, Wolverhampton and at Doncaster. At Wolverhampton we have planning permission for a casino.

Wolverhampton and Doncaster are projects still to be built out but…

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