Nicholas Wrigley. Senior Steward of the UK Jockey Club
The Jockey Club, the largest commercial group in Britain’s second biggest spectator sport, horseracing, today announced its best set of financial results ever – including record turnover (£150.3m), operating profits (£19.8m) and contribution to prize money (£16.5m) – and used them as the springboard to launch the first ever retail bond in British sport, ‘The Jockey Club Racecourse Bond’.
Nicholas Wrigley, Senior Steward, The Jockey Club, said:
“Strong commercial performance allows us to reinvest even more into British racing. I’m delighted we continue to make a telling contribution across the sport, drive innovation where it makes sense and provide the stage for nearly two million people a year to enjoy themselves watching the world’s finest racehorses.
“On behalf of the Stewards I’d like to commend Simon Bazalgette, his management team and all those working within The Jockey Club for their achievements in 2012. We exist solely for the good of British racing, with a vision for Britain to be the best in the world for the next 50 years and beyond.”
Simon Bazalgette, Group Chief Executive, The Jockey Club, said:
“I’m delighted we’ve been able to buck the trend with record financial results and make 2012 the year we contributed more to the people at the centre of our sport than ever before through prize money.
“Our biggest racing festivals have never been bigger, while average attendances at Jockey Club Racecourses grew, more horses trained on our gallops at Newmarket and Lambourn, and The National Stud welcomed growth in stallion nominations, boarding and sales.
“That’s all despite the second-wettest year in history cancelling fixtures, reducing walk-up crowds and increasing costs to keep the show on the road; stiff competition in the leisure market and from events like London 2012 and Euro 2012; and no resurgence in the UK economy.”
2012 Group business performance
Over the course of 2012, The Jockey Club’s Group turnover grew by 8% (£10.9m) to a record £150.3m (2011: £139.4m), which helped to deliver record Group operating profits of £19.8m (2011: £19.2m), up by 3% year-on-year.
The Jockey Club’s record level of business performance and reinvestment through prize money was achieved despite staging 29 fewer fixtures, including losing 26 to bad weather during the second wettest year on record; stiff competition from within the sports and leisure sector, including from the London 2012 Olympic and Paralympic Games and the 2012 UEFA European Championships; and no resurgence in the UK economy.
Growth was driven by record crowds at Jockey Club Racecourses’ major festivals, including 236,700 at the 2012 Cheltenham Festival, 154,000 people at the 2012 John Smith’s Grand National Meeting and more than 130,000 for the Investec Derby Festival; a 12.7% increase in revenues from the non-racing use of its venues (£22m, 2011: £19.7m) for conferences and other events; and a 30% turnover increase at The National Stud.
The Jockey Club’s mission is to act for the good of British racing, including investing all profits back into the sport. During 2012, the Group made its largest ever contribution to prize money from its own resources of £16.5m. This represented more than 60% of its budgeted profits and 47% of the total £35.3m of prize money distributed by its 15 courses last year. For 2013, Jockey Club Racecourses will increase its prize money contribution by £2.1m to £18.6m, subject to fixture cancellations, within a total prize money pot across its 361 fixtures in excess of £40m.
In 2012, The Jockey Club also continued to pay down its debt – by £6.1m to £86.2m by year-end in line with its repayment schedule, after investments of more than £155m in facilities over the last ten years. The Group invested £6.2m in facilities across its racecourse estate and a further £0.5m on the Long Gallop at its Lambourn Training Grounds.
Simon Bazalgette. Chief Executive Officer
Simon Bazalgette continued:
“We also used 2012 to prepare for the future, with a new regional management structure for our racecourse arm already improving performance and reducing costs in 2013. We need to keep working hard to offer our customers value for money, but the outlook ahead looks promising and we’ve committed to putting a record amount back into the sport this year.
“We recently announced plans for an exciting £45m development project at our flagship Cheltenham Racecourse. As part of its funding we are offering a unique investment opportunity through The Jockey Club Racecourse Bond, which should appeal for its generous cash interest, rewards to enjoy a day at the races and the chance to support Britain’s second biggest sport.
“Launching the first retail bond in British sport is a win-win for all; a highly-efficient means for us to raise capital, while also getting closer than ever before to our customers. I hope to report on its success in due course.”
The Jockey Club Racecourse Bond – launched today
The Jockey Club today announced the launch of the first ever retail bond offering in British sport. ‘The Jockey Club Racecourse Bond’ is a five-year initial term investment opportunity available to the general public via www.racecoursebond.com to invest sums between £2,000 and £100,000, which will pay 7.75% gross interest per annum.
Interest payments will be paid quarterly and split between 4.75% gross in cash and a further 3% gross racing rewards in the form of Rewards4Racing Points, which can be used to purchase in full or gain a discount against any online purchase through Jockey Club Racecourses’ websites including tickets, restaurant packages, hospitality packages and racecards, to enjoy at the Group’s 15 racecourses nationwide.
The Jockey Club Racecourse Bond has been launched in a bid to raise at least £15m in highly-efficient capital to put towards an iconic new £45m development at the Group’s flagship Cheltenham Racecourse, which last month welcomed more than 250,000 people for the 2013 Cheltenham Festival. It follows the success of retail bond offerings from the likes of John Lewis, which is understood to have raised £50m in 2011 with a total coupon offering 6.5% gross interest split between cash and John Lewis vouchers, and Hotel Chocolat, which raised £3.7m in 2010 from offering between 6.72 and 7.29% gross interest paid entirely in chocolate.
The Group has a successful track record of raising capital to invest in its facilities – more than £155m in the last ten years – and in so doing, increasing revenues over the long-term to reinvest back into racing.
Paul Fisher, Group Managing Director, Jockey Club Racecourses, said:
Paul Fisher
“Several million people every year enjoy a day at the races, whether you are lifelong fan of the sport or just love a great day out. Our Racecourse Bond offers you generous cash returns at a time of rock-bottom interest rates, with a racing rewards element that can pay for your racing experience at any of our 15 courses nationwide.
“For 263 years, The Jockey Club has been at the heart of Britain’s second biggest sport and today we are doing very well commercially, with an excellent outlook ahead. In 2012 we achieved another year of record financial performance, despite no resurgence in the economy.
“The money we raise from The Jockey Club Racecourse Bond will go straight into British racing through the iconic £45m development we are planning at Cheltenham Racecourse, so if you take up the bond, you get a generous return and you will be making a difference to our fantastic and growing sport.”
Jockey Club Racecourses
In 2012, Jockey Club Racecourses grew its turnover to a record £142.1m, an increase of 8% on 2011, and delivered operating profits of £18.8m, up 2% year-on-year, through strong performances at major racing festivals, a 1.5% increase in average attendances and growth in non-racing revenues.
These results were achieved despite Jockey Club Racecourses making a record prize money contribution from its own resources and 2012 being a challenging year for the racecourse group, with no resurgence in the UK economy, the racing schedule being impacted by the second-wettest year on record, and in the face of strong competition from the 2012 UEFA European Championships and the London 2012 Olympic and Paralympic Games.
Jockey Club Racecourses once again staged a quarter of the British racing calendar through 336 racedays in 2012. In 2012, Jockey Club Racecourses enjoyed an average attendance increase of 1.5% (5,278 people from 5,199 in 2011). Total attendances at The Jockey Club’s 15 courses were 1.8m in 2012, compared to 1.9m in 2011, as a direct result of hosting 29 fewer fixtures. This included 26 fixture cancellations due to adverse weather, with prolonged periods of rain impacting crowds at fixtures that did go ahead at those times. Jockey Club Racecourses welcomed nearly a third of all visitors to British racecourses in 2012.
Jockey Club Catering, the partnership between Jockey Club Racecourses and Compass Group, continues to develop and grow at all levels, generating a circa 6% increase in turnover in 2012. This was driven mainly by increased numbers of hospitality covers at Jockey Club Racecourses’ main festivals and was achieved in spite of the fewer fixtures staged compared to 2011. Additionally, non-raceday business grew by similar levels so that it now represents nearly 20% of all Jockey Club Catering food and beverage sales.
Jockey Club Estates
Jockey Club Estates, The Jockey Club’s property and land management arm responsible for more than 5,000 acres of training grounds, land and property in the racing centres of Newmarket and Lambourn, increased turnover by 3.8% in 2012 to £5.5m. Operating profit reduced by £0.4m year-on-year to £0.2m as a result of £0.5m investment in The Long Gallop at its Lambourn training centre.
These results were delivered despite ongoing challenging trading conditions, drought until early April 2012 then 38 inches and 31 inches of rain falling in Lambourn and Newmarket respectively during the year.
Horse numbers using Jockey Club Estates training grounds bucked the industry trend, increasing by 4.7% year-on-year to 2,798, despite a 4.1% reduction in the number of horses in training in Britain to 14,992. This was split into a 3.7% increase in horses using the Newmarket Training Grounds to 2,798 and a 9.2% boost to the number of horses in training using Jockey Club Estates’ gallops in Lambourn to 522.
The National Stud
The National Stud
The National Stud in Newmarket, The Jockey Club’s means of providing a comprehensive range of breeding and educational services to support the Thoroughbred breeding and racing industries, generated £2.6m of turnover in 2012, which is an increase of 30% compared to 2011. Operating profit increased from £0.1m to £0.7m year-on-year.
With the addition of Dick Turpin to its books The National Stud saw a significant increase in its revenues from stallion nominations in the year, helped by an agreement to shuttle him to Western Australia for the Southern Hemisphere breeding season. The business also saw a significant increase in turnover from its boarding and sales operations. The Stud’s training courses and public tours contributed to performance.
Since becoming part of The Jockey Club in 2008, The National Stud has developed into a commercially-sound organisation offering a range of quality services to the breeding and racing industries. The National Stud’s commercial goal during 2012 was to continue to develop and diversify the services offered to the industry on a viable basis.
Racing Welfare
Racing Welfare, The Jockey Club’s charity for racing’s people in need, provided much needed support services to 834 beneficiaries in 2012, including 7,628 support sessions for them, delivered by its Welfare Officers over the course of the year, up by 24% on 2011. It also provided grants to beneficiaries of £137,907, up by 14% on 2011.
Racing Welfare operates a housing association, Racing Homes, with a portfolio of more than 160 properties nationwide to provide affordable housing for those working in, or retired from, the racing industry. Following completion of a major £1.8m project, a development of 16 flats, each designed to accommodate the needs of retired racing staff, at Rous Memorial Court in Newmarket was opened officially on 21st May 2012 by Racing Welfare’s President, HRH The Princess Royal.
In 2012, Racing Homes also secured the purchase of a property in Malton in order to develop safe, supported accommodation for young stable staff in the North Yorkshire racing centre. This follows the tragedy of two young jockeys losing their lives as the result of a fire in flats at Norton, near to Malton, in 2009. The new facility is scheduled for completion by the end of 2013 and the total cost of the project is estimated to be around £500,000.
QIPCO British Champions Series
The Jockey Club has the largest shareholding in QIPCO British Champions Series (37%), the initiative designed to throw the spotlight on the very best of Flat racing in Britain each year. It culminates in the industry-owned QIPCO British Champions Day staged at Ascot Racecourse each October.
Through to the end of the 2012 QIPCO British Champions Series, races in the initiative enjoyed a 45% increase in terrestrial TV audience on Channel 4 and BBC compared to before the Series launched in 2010. Fixtures featuring the highest-rated racehorse of all time, Frankel, enjoyed attendance increases of more than 20% year-on-year.
In 2012, QIPCO British Champions Series races attracted more of the world’s best horses than any other country, including seven of the top nine in the Thoroughbred World Rankings in the shape of Frankel (140), Cirrus Des Aigles (131), Black Caviar (130), Excelebration (130), Danedream (128), So You Think (126) and Monterosso (126). Its climax at QIPCO British Champions Day was the highest-rated raceday in the world in 2012, in only its second year.
Also in 2012, the Qatari investment firm sponsoring the Series, QIPCO, renewed its initial two-year title partnership deal for an additional five years. The agreement includes full sponsorship rights at the QIPCO Guineas Festival at Newmarket’s Rowley Mile course through until 2017, where the QIPCO 2000 Guineas and QIPCO 1000 Guineas launch the Series each year.
Prize money
The Jockey Club is proud to lead British racing in its contribution to prize money in the sport. In 2012, Jockey Club Racecourses contributed £16.5m to prize money from its own resources, for the good of owners, trainers, jockeys and stable staff, and the competitiveness of British racing. This represented more than 60% of the Group’s annual profits.
Through a combination of this investment and a welcome increase in industry contribution to prize money through the Horserace Betting Levy, total prize money at Jockey Club Racecourses in 2012 increased by nearly 3% year-on-year to £35.3m, despite 29 fewer fixtures being staged. In the process, average prize money per fixture increased by £10,000 year-on-year to nearly £105,000. In the last ten years, Jockey Club Racecourses has given out more than £350m of total prize money.
Music nights
Top Act. Tom Jones
Jockey Club Racecourses’ ‘racing plus music’ events, where a minimum of six races are followed by a musical artist performing, provide an important revenue stream that helps the Group to generate profits to reinvest into British racing. In 2012, these fixtures again proved highly popular, with more than 200,000 people attending 24 events, featuring acts such as Jessie J, Tom Jones, Frankie Valli & the Four Seasons, Madness and Olly Murs.
These results were achieved despite poor weather in summer months, such as July, cancelling some events and significantly reducing walk-up crowds at others. In 2013, Jockey Club Racecourses is scheduled to host 25 music fixtures, with a range of high-profile artists including Keane, Simple Minds, Kaiser Chiefs, Madness, Labrinth, Meat Loaf and Rita Ora.
Non-racing use of venues
The Jockey Club’s £155m investment in facilities over the last ten years continues to pay dividends through non-racing revenue streams. Jockey Club Racecourses’ venues are used to host conferences, launches, exhibitions and other events, with further revenues generated from non-racing leisure pursuits at some locations within the estate, including golf, karting, dry slope skiing and equestrianism. In 2012, increased non-racing revenues of £22.2m (2011: £19.7m) accounted for 15% of the Group’s turnover and helped to drive an increase in operating profits, despite challenging conditions in the conferences, exhibitions and events market.
Media activities
Racecourse Media Group (RMG) now manages the media rights for each of The Jockey Club’s racecourses, after Exeter joined its other courses in May 2012. Jockey Club Racecourses is the largest stakeholder in RMG, which added two other courses in 2012 – Perth and Kelso – to bring its total portfolio to 33 of the 58 courses operating in the UK. This number will grow from 2014 following the news in December 2012 that Ascot will join RMG.
In challenging conditions, RMG grew all its businesses in 2012 to deliver a record operating profit of £14.9m. Media-related revenues have become increasingly important against a backdrop of reduced Levy compared to five years ago and help contribute to The Jockey Club’s ability to commit to increasing its contribution to prize money in 2013. Indeed RMG tracks were responsible for £34.1m (74%) of the £46.1m contributed by all racecourses to prize money in 2012.
In 2012, RMG managed the bidding process for British racing’s domestic terrestrial TV rights, resulting in increased value for the sport through the major four-year deal signed with the public service broadcaster, Channel 4. The broadcaster committed to showing 660 hours and 88 days of live racing each year from 2013 until then end of 2016. Racing UK, RMG’s satellite TV channel, broadcast 2,486 hours of live programming in 2012, while growing its subscriber base to 44,200 people. Its commercial business, for pubs, clubs and hotels, increased to circa 3,600 subscribers. The launch of an IPTV Freeview channel extended the reach of the channel to 10m homes via the Freeview platform.
This expansion in coverage underpins the decision to invest in new state-of-the-art production facilities at Ealing Studios, which have resulted in enhanced production and presentation values since February 2012. In 2012, RMG’s major driver of profit growth was its ‘bet2view’ service, with demand for individual video streams increasing by 34% to 34.2m.
Confidence in Turf TV, the betting shop media service, which broadcasts from RMG’s 33 tracks plus Ascot, was underlined by contract renewals until 2018 with Ladbrokes, Coral and Chisholm, which followed on from William Hill’s early renewal at the end of 2011. The business showed a record profit in 2012 and also broke the 10,000 barrier, with 10,030 betting shops now receiving the service.
GBI Racing, the joint-venture between RMG and At The Races, which produces and distributes British and Irish racing overseas, grew revenues by 9% in 2012, while gaining four new territories (Canada, Denmark, Russia and Cyprus). 2013 has already seen the addition of three more territories (Israel, Finland and Armenia), meaning that British racing is shown in almost 40 territories around the world. 2012 concluded with the finalisation and signing of contracts between 31 RMG racecourses and betting operator, Betfred, to provide pool betting services and on-course betting shops until 2018, as well as international co-mingling.
Rewards4Racing.com
In 2011, The Jockey Club launched a unique loyalty programme, Rewards4Racing, to help to increase frequency of visit and spend among Jockey Club Racecourses customers and reward those who were already regular visitors to one of its 15 racecourses nationwide.
By the end of 2012, Rewards4Racing had attracted more than 200,000 members who earned more than 48m Rewards4Racing points during the year through purchases with Jockey Club Racecourses and the programme’s 3,000 participating retailers. This equated to approximately £500,000 of rewards for members to redeem against racing experiences at Jockey Club Racecourses, in the form of tickets, upgrades, hospitality, restaurant packages, racecards and various money-can’t-buy-experiences.
In 2012, when members redeemed their Rewards4Racing points, Jockey Club Racecourses registered a 51% uplift in average transaction value. One of the highlights of last year was the introduction of key racing partners to the Rewards4Racing programme. Rewards4Racing is now working closely with racing broadcaster, Racing UK, the Racehorse Owners Association, The Racing Post and betting operator, Coral.
