Annual Review and Outlook 2019
£21.0 million (2017: £21.9 million). We continue to deliver strong underlying growth in operating profits, evidenced by record Group operating profit before prize money of £48.1 million in 2018, up by 7.4% from £44.8 million in 2017. associates was £4.5 million in 2018 (2017: £9.1 million). This was partly a result of the lower operating profit already outlined and also because 2018 saw a higher depreciation charge of £9.3 million versus £7.0 million in 2017 as a result of the impact of the first year of owning Time Test (£0.5 million) and lower capital grant amortisation (£0.9 million), plus the impact of more historic capital expenditure projects coming through. The gain on the upward movement in investment values was also lower by £0.3 million. CAPITAL INVESTMENT We continued to invest in capital projects throughout 2018 with details provided in the Group Chief Executive’s Review. This saw us make total net capital spend during the year of £9.7 million (2017: £13.0 million). PRIZE MONEY INVESTMENT Total prize money at Jockey Club Racecourses increased by £6.2 million to a record £51.9 million in 2018 (2017: £45.7 million). The key driver of this was our contribution from our NET PROFITS Net profit after share of
own resources, which increased from £22.9 million to a new record of £27.1 million (18.3%), supplemented by increases in industry funding following reforms to the Horserace Betting Levy. Contribution from entries increased vs 2017 due to higher runner numbers at Jockey Club Racecourses. The contribution from our own funds as a proportion of total prize money increased once again, from 50.1% to 52.2%. Our courses distributed record average prize money per fixture of £157,105 compared to the previous record £133,000 in 2017 – a year-on-year increase of 18.1% – and 57.6% more than the industry average (excluding JCR) of £99,680. GROUP DEBT We refinanced Jockey Club Racecourses’ bank debt on more favourable terms during 2018 and the benefits of this will be seen in 2019 interest charges. A 12-year facility is now in place until 2030 for £90 million, but only £85 million of this was drawn at year end, due to our strong underlying cash position. As a result, net debt was reduced by £2 million to £101.8 million. As a company without equity, entirely manageable and serviceable debt levels given the Group’s assets, cash holdings and credit arrangements remain the basis of funding our investments. However, we plan to pay down £8.9 million of retail bond debt in June 2019 in readiness for
the aforementioned reduction in media revenues via the betting sector. GROUP CASHFLOW Group net cashflow from our operating activities was £19.2 million at the end of 2018. The business continues to be highly cash generative with very limited exposure to bad debt and ongoing headroom for both capital expenditure and debt repayment. A dividend was received from Racecourse Media Group "Total prize money at JCR increased by £6.2 million to a record £51.9 million" and its policy of paying both licence fees and dividends. Net cash capital expenditure of £9.7 million reflects the continued investment on maintaining and improving racecourse and other facilities, and technology and other infrastructure investments outlined previously. The movement in other loans partly reflects the non- drawdown of £5 million of the new facility mentioned previously. in line with its underlying performance for the year
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