Jockey Club Racecourses Limited Notes to the financial statements Year ended 31 December 2021
1.
Accounting policies The company is a private company limited by shares and is registered in England and Wales. The address of the company's registered office is shown on page 1. The principal activity of the company is described in the Strategic Report on pages 2 to 7. The financial statements have been prepared in accordance with FRS 102, the Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland. In preparing these financial statements, advantage has been taken of the following disclosure exemptions available in FRS102: No statement of cash flows has been presented. This exemption is available because the company is a member of the Jockey Club Racecourses (Holdings) Limited group. The group's consolidated financial statements are publically available at Companies House. As the company is wholly owned by Jockey Club Racecourses (Holdings) Limited and is included in the consolidated financial statements of this entity, the company has taken advantage of the exemption from preparing consolidated financial statements under s400 of the Companies Act 2006. These financial statements therefore present information on the company alone. The following principal accounting policies have been applied: Going concern The company's business activities, together with the factors likely to affect its future development, performance and position are set out in the Strategic Report on pages 2 to 7 of these financial statements. In relation to the statement of financial position, the directors draw the reader's attention to note 20 to the financial statements concerning the background to the Grant Account. The Grant Account represents capital grants received from the Horserace Betting Levy Board to which the company has an absolute entitlement. In the event therefore that Shareholders' Funds/Deficit were restated to include the full extent of this entitlement, Shareholders' Funds would total £92.4m (2020: £71.1m). The financial position of the company, liquidity position and borrowing facilities are described in the Strategic Report on pages 2 to 7. The company meets its day-to-day working capital requirements through use of its cash, overdraft and banking facilities (see notes 15 and 16). The company signed a revised banking facility in December 2018. The total facility is £92m and includes a £50m term loan and a £42m revolving credit facility. The facility is for a 12 year term, until 2030, with repayments commencing at the end of 2021. The company continues to be contracted to interest rate swap arrangements in order to limit the exposure to interest rate fluctuations. These swaps are matched with the period ofthe facility on an amortising basis. Overall, we are satisfied that our debt is at a long- term sustainable and manageable level. There has been a significant improvement in revenue streams during 2021 which can be seen in the income statement on page 13 and is discussed in the Strategic Report on pages 2 to 7. Racing continued throughout 2021 meaning revenues continued to be earned from media rights and sponsorship while racing carried on behind closed doors. Admissions for the last quarter of 2021 were high and ahead of the equivalent period in 2019. In last year's financial statements we reported a material uncertainty that may cast significant doubt over the company's ability to continue as a going concern. It is the directors' view that this material uncertainty no longer exists as the likelihood of a cancellation of racing is deemed to be remote. Factors contributing to this view include; the successful rollout of the COVID-19 vaccination programme, removal of all remaining restrictions by the Government including racing behind closed doors and capacity restrictions thereafter. In both the base case and reasonable down-side scenarios, the Group is forecasting to remain significantly cash positive and compliant with covenants during the remainder of 2022 and 2023. This is based on reasonable sensitivities against admissions, including the impact of a recurrence of racing behind closed doors coinciding with key fixtures in the Jockey Club's 2022 racing calendar. If an uninsured situation, such as a pandemic recurrence, arose and affected attendances at the Cheltenham Festival, then the Group would take steps to mitigate the effect on covenant compliance.
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