Arena Leisure Plc Annual Report 2005
Annual Report 2005
Arena Leisure Plc
1 Hay Hill
Berkeley Square
London W1J 6DH
Telephone +44(0) 20 7495 2277
Facsimile +44(0) 20 7491 7174
www .arenaleisureplc.com Principal bankers
Bank of Scotland
New Uberior House
11 Earl Grey Street
Edinburgh EH3 9BN
Stockbroker
Numis Securities Ltd
Cheapside House
138 Cheapside
London EC2V 6LH
Financial advisors
Investec Bank (UK) Limited
2 Gresham Street
London EC2V 7QP
Deutsche Bank
Winchester House
1 Great Winchester Street
London EC2N 2DB
Registrar and transfer office
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Company information
Head and registered office
1 Hay Hill
Berkeley Square
London W1J 6DH
Telephone +44(0) 20 7495 2277
Facsimile +44(0) 20 7491 7174
contact@arenaleisureplc.com
www .arenaleisureplc.com
Company secretary
Robert Mercer FCMA
Registered number
857819
Auditors
BDO Stoy Hayward LLP
8 Baker Street
London W1U 3LL
Solicitors
Freshfields Bruckhaus Deringer
65 Fleet Street
London EC4Y 1HS
Kirkpatrick & Lockhart Nicholson Graham LLP
110 Cannon Street
London EC4N 6AR
Designed by williams and phoa
Arena Leisure at a glance
Arena Leisure Plc stages 25% of all horseracing in the UK. Our portfolio of
racecourse assets provides a solid base for the future development of the
group. Continued focus on improving our fixture list, increasing attendance
and expanding non-racing facilities will enable us to develop venues which
operate for 365 days a year.
Horseracing media/broadcast
At The Races
UK, Irish and international horse
racing on Sky , ntl, ntl Ireland,
Telewest and Chorus. Average
monthly reach over 1.2 million
Income streams:
• Advertising, sponsorship 
and teletext
• International distribution
• Interactive betting and gaming
• Live Web streaming and 
video archive
• Casino and poker
• Distribution to UK 
commercial premises
Doncaster
101 Acres (leasehold)
29 Race meetings (2005)
3% Share of UK horserace 
betting turnover
2% Of UK race meetings
224,000 Attendance (2005)
Other information
• Closed, undergoing major 
re-development
• Home of the St Leger, the world’s
oldest classic horse race
• Flat turf and National 
Hunt racing
• Exhibition centre
Wolverhampton
105 Acres
97 Race meetings (2006)
4% Share of UK horserace 
betting turnover
7% Of UK race meetings
76,000 Attendance (2005)
Other information
• The UK’s busiest racecourse
• Only floodlit All Weather track
• Only racecourse in the UK 
with an onsite hotel
Worcester
100 Acres (leasehold)
21 Race meetings (2006)
1% Share of UK horserace 
betting turnover
1% Of UK race meetings
48,000 Attendance (2005)
Other information
• Summer jumps track
• Popular family racecourse
Royal Windsor
167 Acres
27 Race meetings (2006)
2% Share of UK horserace 
betting turnover
2% Of UK race meetings
135,000 Attendance (2005)
Other information
• The ‘jewel in the crown’
• Affluent residential, London 
and tourist market
• Popular summer Monday 
evenings fixtures
Lingfield Park
450 Acres
90 Race meetings (2006)
6% Share of UK horserace 
betting turnover
6% Of UK race meetings
168,000 Attendance (2005)
Other information
• All Weather and turf track
• Championship golf course
• Sports and leisure club
• Second busiest racecourse 
in the UK
Folkestone
203 Acres
23 Race meetings (2006)
2% Share of UK horserace 
betting turnover
2% Of UK race meetings
37,000 Attendance (2005)
Other information
• Five minutes from the 
Channel Tunnel
• Railway station and 
immediate motorway access
• Kent’s only racecourse
Southwell
145 Acres
75 Race meetings (2006)
5% Share of UK horserace 
betting turnover
6% Of UK race meetings
70,000 Attendance (2005)
Other information
• All Weather and turf track
• Golf course
• Third busiest racecourse 
in the UK Arena Leisure Plc Annual Report 2005 1 Arena Leisure Plc Annual Report 2005 1
A busy year on and off the racecourse...
Ladbrokes St Leger successfully
managed in September. Annual
Doncaster attendances increased
by 5.2% to 224,000 (2004: 213,000)
Doncaster Racecourse, home 
of the St Leger - the oldest 
classic horserace in the world -
acquired in December 2005.
Redevelopment work underway 
to transform it in to a world class
leisure and racing destination.
First running of a Grade 1
steeplechase on an Arena course
(Lingﬁeld, February 2005)
‘Photoﬁnish’, ‘starting stalls’ and
‘camera patrol’ operations brought
in-house to improve efﬁciency and
reduce costs
Elevation of the Winter Derby to
Group 3 status for 2006 (Lingﬁeld)
At The Races generated over £1.6m
for its racecourse partners in the
form of media rights payments
First ever running of a Group 
race on an all weather surface 
(Lingﬁeld, July 2005)
+6%
Record attendance at Arena’s six
owned racecourses up 6.0% to
534,000 (2004: 504,000)
324
Record 324 ﬁxtures held in 
2005 (2004: 315) at Arena’s six
owned racecourses, staging
2, 172 races representing 25% 
of all UK horse races 
95
With 95 race meetings Lingﬁeld
Park was the most frequently
operated racecourse in the UK 
in 2005
Financial highlights
• Turnover increased by 9.4% to £40.7m (2004: £37.2m)
• Proﬁt from operations increased by 30.0% to £6.7m (2004: £5.2m)
• Adjusted proﬁt from operations increased by 21.6% to £6.3m 
(2004: £5.2m), after adjusting the 2005 result for one-off 
gains and losses
• Arena’ s share of At The Races’ adjusted operating loss reduced 
by 73.0% to £1.0m (2004: £3.7m)
• Proﬁt before tax of £4.5m
• Adjusted earnings per share increased by 312% to 1.32 pence 
(2004: 0.32 pence)
• Proposed ﬁnal dividend of 0.2 pence per share, giving a total
dividend of 0.45 pence per share – an increase of 50% 
(2004: 0.3 pence per share)
Contents
1 Financial and 
operating highlights
2 Chairman’s statement
4 Chief Executive’s review
18 Financial review
22 Corporate social responsibility
24 Board of directors
26 Directors’ report
29 Corporate governance
31 Remuneration report
34 Consolidated income
statement and 
Consolidated statement of
changes in shareholders’ equity
35 Consolidated balance sheet
36 Consolidated cash ﬂow
statement
37 Notes forming part of the
ﬁnancial statements
57 Company balance sheet – 
UK GAAP ﬁnancial statements
58 Notes forming part of the 
UK GAAP ﬁnancial statements
61 Independent auditors’ report
62 Notice of meeting
64 Five-year record I am delighted to report on another 
successful year for Arena Leisure Plc 
with strong performances from both our
racecourse division and our media rights
company , At The Races.
2 Arena Leisure Plc Annual Report 2005 2 Arena Leisure Plc Annual Report 2005 2 Arena Leisure Plc Annual Report 2005
Chairman’ s statement
share of ATR’s post tax result, which was a loss
of £1.5m (2004: proﬁt £0.6m). Included within
the 2005 result is a tax credit for consortium
relief of £0.5m (2004: £4.9m) and £0.9m of
exceptional costs (2004: £0.9m) representing,
in 2005, legal costs incurred in connection with
two legal disputes. In the ﬁrst case against the
British Horseracing Board (‘BHB’), UK legal
history was made when the judge found in
favour of ATR, ruling that the BHB had abused 
its dominant position. The BHB has since
decided to appeal against this ruling, although
we remain conﬁdent. In the second case, in
which ATR is claiming around a net £30m in
outstanding rebates from the 30 racecourses
not currently afﬁliated to ATR following the
termination of media rights agreements in
2004, the court hearing is scheduled to begin
on 13 March 2006. ATR remains conﬁdent of 
a positive outcome.
Overall, proﬁt before tax was £4.5m 
(2004: £4.9m) and earnings per share from
continuing operations were 1.24 pence 
(2004: 1.41 pence). Adjusting for one-off 
gains and losses in 2004 and 2005 in order to
give a more useful indication of underlying
I am delighted to report on another successful
year for Arena Leisure Plc (‘Arena’), with 
strong performances from both our racecourse
division and our media rights company ,
At The Races (‘ATR’).We also acquired the
rights to redevelop and operate Doncaster
Racecourse, home of the world’s oldest 
classic race, the St Leger.
The results achieved in 2005 conﬁrm the
enormous operating improvements that have
been achieved. Turnover increased by 9.4% to
£40.7m (2004: £37.2m). Proﬁt from operations
on the new IFRS basis increased by 30.0% to
£6.7m (2004: 5.2m). Adjusting the 2005 result
for one-off gains and losses in order to give 
a more useful indication of underlying
performance (see Note 11 for details), the
adjusted proﬁt from operations was £6.3m,
a rise of 21.6%.
At The Races performed successfully in its 
ﬁrst full year of operation since its relaunch 
in June 2004. Arena’s share of ATR’s adjusted
operating loss (see Note 11 for details)
reduced dramatically by 73% to £1.0m 
(2004: £3.7m). Under the new IFRS accounts
presentation, Arena is required to disclose its Arena Leisure Plc Annual Report 2005 3
performance (see Note 11 for details),
adjusted earnings per share from continuing
operations increased in 2005 by 312% to 
1.32 pence (2004: 0.32 pence).
2005 was also a year of change for the
company , no more so than on the board.
On 1 October 2005, Mark Elliott replaced 
Ian Penrose as Chief Executive of Arena.
I would like to thank Ian for the enormous
energy and dedication that he brought 
to Arena during his time here as Finance
Director, Managing Director and Chief
Executive. Ian has left the company in 
a very strong position and he can be 
justiﬁably proud of his achievements here.
Mark Elliott is the former Chief Executive 
of Wembley Plc, having previously been its
Finance Director. During Mark’s seven year
tenure on the Board of Wembley , the company
operated ten greyhound tracks in the UK and
USA and one horseracing track in the US as
well as Wembley Stadium and Wembley Arena
and a variety of businesses providing services
to UK leisure venues. He therefore brings 
a wealth of experience relevant to Arena.
On 1 November 2005, Raymond Mould 
joined the board as non-executive deputy
Chairman. Raymond, a qualiﬁed solicitor,
has an outstanding track record in the UK
corporate world, particularly in the property
development industry . He also has a close
association with the horseracing industry ,
owning the 2002 Grand National winner,
Bindaree. He is currently Chairman of London
& Stamford Investments and was Executive
Chairman of Pillar Property Plc until May 2005
when it was acquired by British Land Plc for
£811m. At the same time, John Barnes retired
from the board and I would like to thank him for
all of his work at Arena. He had been a board
member since the company’s formation 
in 1997 and had made an extraordinary
contribution to Arena’s growth over that time.
Having been on the Arena board for ﬁve 
years and Chairman for over four years, I have
decided now is the right time for me to retire
from the board. I will therefore leave the board
at the annual general meeting (‘AGM’) on 8
May 2006, handing over the role of Chairman
to Raymond Mould. I am extremely privileged
to have been Chairman through a period of
such progress for Arena and to leave it facing 
a bright future.With Raymond and Mark at 
the helm, I am satisﬁed that Arena is in very
safe hands as it faces the opportunities and
challenges that lie ahead. I expect also to
announce the appointment of a new non-
executive director on or before the AGM.
I am extremely grateful to all of my fellow
directors and all of our employees for their
dedication and hard work over this eventful
year and, indeed, the support and loyalty they
have given me in my years as Chairman. Their
focus and determination to give every one of
our customers the best experience possible 
is fundamental to the success of the company
and I thank them all for their commitment.
As a result of the strong performance this 
year, an interim dividend of 0.25 pence per
share was paid in October and the Board 
has proposed a ﬁnal dividend for 2005 of 0.2
pence per share. This will give a total dividend
in relation to 2005 of 0.45 pence per share – an
increase of 50% over the 0.3 pence per share
declared in 2004. This dividend is proposed to
be paid on 12 May 2006 to shareholders on the
register on 31 March 2006.
2006 has started well, with our All Weather
racecourses performing well. During 2006,
it is expected that a number of new All
Weather surfaces will become operational 
at racecourses around the country . I see this 
as a tribute to the work that Arena has put in 
to raising the standards and proﬁle of All
Weather racing in this country since we 
ﬁrst introduced the Polytrack racing surface 
in 2001 at Lingﬁeld Park.We welcome
competition which, I have no doubt, will 
bring out the best in the Arena team as well 
as give us opportunities to extend the role 
of All Weather racing in the UK.
In December, Arena was delighted to
announce that agreement had been reached
for an Arena subsidiary to acquire the 
rights to redevelop and operate Doncaster
Racecourse – the home of the world’s oldest
classic race, the St Leger – on a 99-year lease,
commencing upon completion of the
redevelopment.Work on the exciting
redevelopment has now commenced.
The UK horseracing industry faces a number 
of challenges in the coming years, most
importantly the need to ﬁnd a commercial
replacement for the Levy before 2009 and also
an acceptable future home for the Tote.Within
the ever changing world of UK horseracing, I am
conﬁdent that Arena is well placed to capitalise
on the exciting value enhancing opportunities
in front of it, to help the industry as a whole
move forward and to continue to deliver a
growing proﬁt stream for its shareholders.
My thanks to you all for your continued support
of Arena Leisure.
Roger Withers
Chairman
28 February 2006
05
04
03
*
02
*
Turnover
£million
40.7
37.2
29.1
25.1
05
04
03
*
02
*
Operating profit
£million
6.7
5.2
4.7
2.6
05
04
03
02
Dividend
pence per share
0.45
0.3
–
–
* Excluding Discontinued Operations
and Exceptional Items 4 Arena Leisure Plc Annual Report 2005
Chief Executive’ s review
our racing product have great commercial
value and it is through our At The Races joint
venture that we seek to derive as much value
for these rights as possible.
Arena’s strategy with regard to these assets
and skills is simple – to deliver added value for
its shareholders.We will achieve this through 
a combination of the following:
• Deliver consistent proﬁt growth through 
the greater utilisation of our assets on both
race-days and the many days in between,
and greater efﬁciency with regard to costs.
The record proﬁts achieved in 2005 are 
a testament to this.
• Invest in improved facilities for customers,
both in terms of the physical facilities
provided at our racecourses, but also in
terms of the racing product that we supply
to the bookmakers. The development
taking place at Doncaster Racecourse
illustrates this approach.
It is ﬁve months since my appointment to the
role of Chief Executive in October 2005. In this
relatively short period, it has become clear to
me that Arena possesses a wealth of talented
people and a range of exciting growth
opportunities. I am grateful to the senior
management within Arena for their assistance
during this transition period. This review sets
out the key events that occurred in 2005 and
also gives an indication of the opportunities
that lie ahead for Arena.
Arena owned and operated six racecourses
throughout 2005 – Royal Windsor, Lingﬁeld
Park,Wolverhampton, Southwell,Worcester
and Folkestone. It also managed Doncaster
throughout most of 2005, acquiring the rights
to redevelop and operate the racecourse in
December 2005. Arena stages around 25% 
of all horseracing in the UK. Its skills are very
much in venue management, providing a great
product and a high quality of service for its
customers. The media rights associated with
Arena possesses a wealth 
of talented people 
and a range of exciting
growth opportunities. Arena Leisure Plc Annual Report 2005 5
Across the six racecourses, total attendance
levels increased by 6.0%, reaching a record 
of 534,000 (2004: 504,000) and, as part of this
growth, we are delighted that we also increased
average ﬁxture attendances. Royal Windsor
demonstrated the greatest growth with average
daily attendance reaching 5,098, a 19%
increase on 2004, including a record daily
attendance of 9,248 on 11 July 2005. Efforts
were made at all Arena courses to increase 
the number of corporate customers as these
represent the customer base that not only
generates the highest spend per head, but 
also offers a market that we believe has strong
growth potential. A 17.5% increase to 47,600
corporate customers (2004: 40,500) reﬂects
this focus, as well as the much improved
facilities on offer in 2005 at Lingﬁeld Park.
Arena also operated Doncaster Racecourse
throughout 2005 under a management
contract on behalf of Doncaster Metropolitan
Borough Council, staging 29 ﬁxtures. Arena
was delighted to be involved with both the
staging of the St Leger, the world’s oldest
classic race, and the introduction of Ladbrokes
as sponsor to the St Leger Festival, thereby
greatly enhancing the prestige of both the
meeting and the St Leger itself. Despite the
lack of modern facilities at the course and
adverse weather conditions throughout the
key St Leger Festival, attendances for the 
year increased by 5.2% to almost 224,000 
(2004: 213,000). This is a tribute to Arena’s
venue management skills and provides a high
degree of conﬁdence that Arena will make 
a great success of the redeveloped Doncaster
Racecourse when it re-opens in 2007.
Arena provided record levels of prize money
in 2005, with owners beneﬁting from a 6%
increase in prize money to over £12m across
Arena’s six tracks. This included signiﬁcant
contributions to ﬁxtures transferred from
Ascot, and the ﬁgure would have been higher
still if three valuable national hunt days had 
not been lost to bad weather in December.
Many of Arena’s racing highlights in 2005 took 
place at the newly refurbished Lingﬁeld Park.
This included Arena’s ﬁrst running of a Grade 1
steeplechase when the £100,000 transferred
Ascot Chase was staged in February , the UK’s
ﬁrst running of a Group race on an All Weather
surface with the transfer of the Silver Trophy
from Ascot in July , and the hosting of the
Littlewoods Bet Direct Winter Derby which is
the centrepiece of the European All Weather
Series.We were delighted that, as a result of
the success of the Winter Derby in recent
years, the International Pattern Committee
agreed to elevate the race to Group 3 status 
for 2006, when the £100,000 contest will 
again prove to be one of the highlights of 
the All Weather season.
• Realise value from any surplus or under -
utilised assets within the Group. This will
primarily relate to the land that Arena owns
– over 1,000 acres of freehold land and
leases on a further 200 acres. In 2005,
Arena disposed of its minority 1%
shareholding in Satellite Information
Services (Holdings) Limited (‘SIS’) for 
a cash consideration of £1.2m and a net
proﬁt of £0.8m. SIS provides television
pictures, text and voice data from
horserace courses and greyhound 
stadia to licensed betting ofﬁces. This
shareholding was not core to Arena’s
operations. Similarly , it is intended that 
a non-core minority shareholding in a US 
tote system developer that is a legacy from
Arena’s software development past will be
sold. The proceeds are not expected to be
large and a provision has been taken
against the carrying value.
• Build on our core strengths, adding value
through acquisitions where appropriate.
Arena is keen to add further horse
racecourses, although due to the 
lack of frequency with which courses
become available at realistic prices,
such acquisitions will be, by necessity ,
opportunistic in their nature.We will identify
appropriate related businesses into which
our undoubted skills are transferable.
Arena declared its ﬁrst dividend in 2004 
of 0.3 pence per share, followed by an interim
dividend in 2005 of 0.25 pence per share. The
Board has proposed a ﬁnal dividend for 2005
of 0.2 pence per share, giving a total dividend
in relation to 2005 of 0.45 pence per share – 
an increase of 50%. This dividend is covered
approximately 2.8 times by Arena’s 2005
earnings of 1.24 pence per share. The board
has determined that, based upon the
opportunities that lie ahead for Arena, it is
prudent to maintain this level of cover for the
foreseeable future. In addition, over a period 
of time, Arena will implement a policy in 
which around one-third of the anticipated total
dividend is declared with the interim results,
with the balance of around two-thirds declared
as a ﬁnal dividend.
Racecourse division
Arena’s six racecourses staged a record of 
324 ﬁxtures in 2005 (2004: 315), representing
24% of the UK horseracing ﬁxture list.
These ﬁxtures featured a total of 2,172 races,
equating to 25% of the UK total. The increase 
in ﬁxtures was attributable to the high number
of ﬁxtures held at our three All Weather tracks
and the staging of a number of ﬂat and national
hunt ﬁxtures transferred from Ascot during the
latter’s redevelopment. Lingﬁeld Park was host
to a total of 95 ﬁxtures.
Ladbrokes sponsorship
During 2005 Arena was delighted 
to introduce Ladbrokes as the
principal sponsor of the St Leger
festival at Doncaster
Lingﬁeld Park attendance
Improved facilities at Lingﬁeld Park
contributed to the growth in race-
day attendance 6 Arena Leisure Plc Annual Report 2005
Our core skill – venue management
Through our venue management skills we aim to deliver a quality service 
that provides a high level of customer satisfaction at all types of event;
we aim to ensure that our customers enjoy the experience of a day at the races. Arena Leisure Plc Annual Report 2005 7 8 Arena Leisure Plc Annual Report 2005
Chief Executive’ s review continued
In the more traditional areas of racecourse
operation, Arena continued to excel with turf
management given its usual high priority .
It was just reward for the small and dedicated
team of ground staff at Folkestone that they
were awarded runner -up status for dual-
purpose racecourses (ﬂat and jump) in the
Neil Wyatt Ground staff awards.
Outside racing,Wolverhampton remained 
one of the busiest racecourses in Britain. Its
hotel operation, the Holiday Inn Garden Court,
achieved record occupancy levels and, in 
the second quarter of 2005, achieved the
distinction of being awarded the best overall
score for guest satisfaction of all hotels within
the Intercontinental Hotel Group in Europe,
Middle East and Africa. The conference and
exhibition business also continued to expand.
Both Lingﬁeld Park and Royal Windsor
racecourses held popular ﬁreworks displays 
in November, attracting large audiences from
the local community . Southwell racecourse 
was the second of Arena’s racecourses (after
Wolverhampton) to be awarded Investors in
People accreditation.
Industry matters
Future funding of racing
In 2004, the UK Government passed an 
Act abolishing the statutory Levy on the
understanding that an alternative source of
funding for the UK horseracing industry had
been found through the BHB selling pre-race
data to bookmakers. However, the ruling
handed down by the European Court of Justice
(‘ECJ’) in November 2004 and upheld by the
Court of Appeal in the BHB and Others v
William Hill in July 2005 prevented the selling
of pre-race data as a method of funding racing.
In 2005, Arena entered into its second
agreement with BAGS for the distribution 
of racing pictures to licensed betting ofﬁces
(‘LBOs’). This extends through to the end 
of 2009 and is a key agreement for Arena,
generating a signiﬁcant proportion of our
turnover. However, in this new agreement,
the amount paid for ‘regional races’
decreased. Regional racing provides ﬁxtures
that are restricted to horses with a maximum
rating of 45–50. Arena staged over 300
regional races in 2004 and 2005 and the new ,
reduced tariff had a negative impact on the
level of BAGS income received in 2005 of
around £0.6m. Arena continues to work with
the British Horseracing Board (‘BHB’) and
other sectors of the racing industry to seek 
a means by which the current system of
regional races can be improved.
As part of Arena’s drive towards greater
efﬁciency and due to the scale of our operations
as the UK’s leading operator of horseracing
ﬁxtures, Arena reviewed where cost savings
could be made and services brought in-
house, thereby avoiding the need for extensive
set-up costs on each race-day . As a result, the
‘photoﬁnish’ and ‘starting stalls’ operations
were taken over in 2005 and the ‘camera
patrol’ operation taken over in early 2006. In all
these areas of operation, it was determined
that the service could be provided much more
efﬁciently through the investment in our own,
racecourse-based staff and equipment, and
has been achieved without impacting on the
quality of the service provided.
Outside of racing,W olverhampton 
remained one of the busiest racecourses 
in Britain.Its Holiday Inn hotel achieved
record occupancy levels in 2005.
W olverhampton Racecourse
Holiday Inn
Scored top marks for guest
satisfaction in 2005
Excellence in turf management
The Folkestone ground staff team
achieved recognition in the racing
industry ground staff awards for 2005 Arena Leisure Plc Annual Report 2005 9
Ofﬁce of Fair Trading (‘OFT’)
During 2005 the OFT announced that it was
closing its investigation into British racing.
During the lengthy investigation, the BHB 
had produced a blueprint for the future of
British racing entitled the Modernisation 
of British Racing (‘MBR’). Although the MBR
became redundant with the ECJ ruling,
a number of its recommendations to bring
racing into a more commercial era remain
valid. Recommendations which continue 
to be pursued or have already become
established are:
• The establishment of a competitive bidding
system whereby racecourses can acquire
leasehold ﬁxtures. In the bidding for 2006
ﬁxtures (carried out in June 2005), Arena
acquired 66 ﬁxtures on a one-year lease
and relinquished 73. This represented 
an overall improvement in our racing
programme due to the higher quality of the
new ﬁxtures. A similar bidding process will
take place in mid-2006 for 2007 ﬁxtures,
when Arena will again seek to improve 
the quality of its leasehold ﬁxture list.
As a result of the likely arrival of new 
All Weather courses in 2006, there will 
most likely be increased competition 
for these ﬁxtures, potentially reducing 
the number that Arena may obtain.
• Establishing a system for the distribution 
of Levy income whereby a racecourse
receives income in proportion to the
amount of either betting turnover or 
betting proﬁt that its ﬁxtures generate
(‘hypothecation’).With the expectation 
that this system is in place by 2009, it is 
the intention that the racing industry and
bookmakers increase the emphasis on
betting revenue in the distribution of
income from 2007.
• Creation of a ‘development fund’ to
incentivise racecourses to put on races
which are necessary for the development
of young racehorses and the improvement
of the thoroughbred.
A committee was set up under the
chairmanship of Lord Donoughue to
investigate an alternative means of funding
racing. This committee, the Future Funding 
of Racing Review Group (‘FFRRG’) made an
interim report in March 2005 recommending
that the Levy should remain in place until 2009.
FFRRG reported its full ﬁndings to the Minister
for Sport in December 2005, recommending
that further investigation should be conducted
into replacing the Levy with a commercial
system based on the pooling and sale of all
racing’s rights – pictures and pre-race data –
by the racecourses to the bookmakers’ central
purchasing agent for the UK and Irish markets.
In the event that legal obstacles prevented a
purely commercial solution, FFRRG would also
investigate the possibilities of a hybrid solution
whereby there is some form of statutory
backing for a commercial arrangement. There
are very many hurdles to be overcome before
a commercial mechanism is determined, not
least the issue of irrecoverable VAT at 17.5%
on any payments made under a commercial
arrangement. Currently , such a cost does not
arise under the statutory Levy system.
FFRRG recommended that, in order to
implement a commercial arrangement,
‘Newco’ should be set up to be the 
entity responsible for the collection and
redistribution of the funds received through
the sale of racing’s rights. Newco would be
jointly owned by the UK racecourses and the
Horsemen’s Group (a group set up by the
Racehorse Owners’ Association comprising
those bodies in racing whose primary interest
in racing’s ﬁnances lie with prize money).
It also recommended the combination of the
two current bodies dealing with regulation and
governance functions into one new body .
Arena fully supports both the ‘Newco’
and single governing/regulatory body
recommendations. The UK Government is
currently considering the FFRRG’s report.
Gambling Act 2005
The Gambling Act 2005 provides for the
relaxation of opening hours for licensed
betting ofﬁces and it is the Government’s
intention to see the full implementation of the
Gambling Act by the third quarter of 2007.
The potential for the evening opening of
betting shops in the latter part of 2007 should
allow for an expansion of the ﬁxture list to
provide further evening racing – a move 
that Arena supports and would expect to
beneﬁt from.
Camera patrol
In the drive for improved efﬁciency
the race-day camera operation was
brought in-house in February 2006 10 Arena Leisure Plc Annual Report 2005
Delivering proﬁt
Our business continues to seek better and mor e efﬁcient utilisation of our assets;
improving our ﬁxture list, growing attendance and developing non-racing
activities. Arena is focused on driving a stronger and more proﬁtable business. Arena Leisure Plc Annual Report 2005 11 12 Arena Leisure Plc Annual Report 2005
Chief Executive’ s review continued
UK and Irish meetings. All of these racecourses
have chosen to sign with ATR in order to
beneﬁt from the widespread exposure of the
sport that ATR provides. This enhances their
on-course sponsorship and advertising,
enhances levy generation and provides them
with payments from ATR via their media rights
agreements – agreements that directly relate
to the income derived from the broadcast of
races to the host track.
Given the popularity of UK racing outside the
domestic market and ATR’s commitment to
grow this further, ATR also derives revenues
from an international business, broadcasting 
to over 20 countries through ATR International.
These revenues come from the established
ﬁxed odds betting territories such as the
Caribbean and Sri Lanka, and also from
existing and emerging pari-mutuel betting
territories such as Italy , Russia, Eastern 
Europe and the USA. Through an agreement 
entered into in March 2005 with the UK Tote,
international customers are able to place 
bets on races from ATR courses which are
commingled into the UK Tote pools. To date,
more than £10m has been commingled into
on-course Tote pools through this route. ATR
earns a commission on these bets, and our
racecourses also beneﬁt from increased
liquidity of the domestic Tote pools.
In addition to its UK and Irish coverage, ATR
also shows quality racing from around the
world, including from France, Japan, Australia
and the USA. Between two and four US race
meetings are currently shown each evening,
with ATR generating commissions from bets
placed with UK bookmakers that are
commingled into the US pools.
At The Races
Arena owns a valuable portfolio of media
rights in the form of the races staged at its
courses. This value is delivered through 
At The Races (‘ATR’), a joint venture in which
Arena has a 47.5% shareholding, together with
BSkyB (47.5%) and Ascot Racecourse (5%).
ATR is committed to maximising the value 
of the media rights licensed to it by its
racecourse partners. It achieves this by
making its partners’ racing product as widely
available as possible, both domestically 
and internationally , thereby growing the
popularity of UK and Irish racing. ATR is not 
a bookmaker, acting instead as a facilitator 
for bets to be placed with its betting partners
and driving ancillary revenues. At The 
Races generates more than £2m per week 
in turnover for its betting partners from
interactive red button betting on the Sky
platform alone. An interactive betting service 
is also available on NTL.
ATR now has media rights agreements with 
29 UK racecourses. This follows the conclusion
of a media rights agreement with Doncaster
Metropolitan Borough Council in December
that gives ATR exclusive domestic and
international rights to at least 25 of Doncaster’s
transferred ﬁxtures throughout 2006 and early
2007 and, from the re-opening of Doncaster
Racecourse in time for the Ladbrokes St Leger
in September 2007, exclusivity across the
entire Doncaster ﬁxture list. These agreements
provide ATR with the exclusive right to
broadcast around 55% of all UK ﬁxtures.
In addition, ATR also has exclusive rights to
broadcast racing from all 27 Irish racecourses
and thereby over 250 Irish horseracing ﬁxtures
a year. In 2005, ATR broadcast more than 1,000
At The Races
Taking racing to a wider audience
in the UK and internationally ,
on a range of media platforms
St Leger
In December 2005 ATR concluded
an agreement to broadcast racing
from Doncaster racecourse, including
the Ladbroke St Leger from 2007
At The Races is committed to broadcasting
racing to the widest possible audience 
and to maximising the value of racecourse
media rights. Arena Leisure Plc Annual Report 2005 13
ATR recently launched an online odds
comparison service, Best Odds, that provides
viewers with a one-stop shop in which they 
can see the options available for the bet they
wish to make, place a bet and then proceed 
to watch racing live. The comparator allows the
customer to compare the odds being offered
by 15 betting partners, including leading ﬁxed
odds bookmakers, Tote pools and betting
exchange Betfair.
A key to the long-term growth of ATR is its
ability to maximise its revenue from new
channels of distribution. In 2005, At The Races
3G was launched to a potential audience of 
six million subscribers on the 3 and Vodafone
video mobile networks. All the channel’s
previews, news, analysis and UK and Irish
horseracing content can be seen as a live
broadcast with full commentary . ATR is also
part of Sky Mobile TV , a joint venture between
Vodafone and BSkyB to bring live TV to 3G.
ATR is one of 19 channels available on the
package. Mobile TV is an exciting new
proposition and one in which horseracing can
achieve a strong audience. ATR’s distribution
on mobile platforms will continue to roll out
across all mobile networks, including in
Ireland, and the addition of enhanced betting
and research functionality is expected in 
due course.
2006 has started well for ATR. ATR is in 
a strong ﬁnancial and operational position 
and is well positioned to build further on the
successes achieved in 2005. A key objective
will be to secure greater international
distribution. One of the main ways that this 
can be achieved is by persuading the UK
horseracing industry of the beneﬁts of
extending 48-hour declarations to all UK ﬂat
racing. This will allow UK racing to attempt to
compete with its international counterparts 
on a level playing ﬁeld and thereby maximise
the revenue potential for UK horseracing in
overseas markets.
Developments
Arena constantly strives to improve the
facilities that it provides for its customers. Over
the last ﬁve years, Arena has invested around
£24m into racecourse improvements. These
have included new All Weather racing surfaces
at Wolverhampton, Lingﬁeld and Southwell,
major refurbishments of the grandstands at
Lingﬁeld and Folkestone, improved access 
at Royal Windsor, the purchase of two ‘giant
screens’ for added viewing enjoyment,
together with a large number of small projects
all contributing to the enjoyment of Arena’s
racing product.
Overall, ATR experienced signiﬁcant growth 
in 2005. ATR’s operating loss (before legal
costs) was £2.0m. Importantly , within this, over 
£1.6m was paid or is payable to its racecourse
partners in the form of media rights payments.
This brings the total generated since ATR’s
launch in June 2004 to over £2.2m.
During 2005, the ATR television channel was
ofﬁcially recognised by the Broadcasters’
Audience Research Bureau as the UK and
Ireland’s most watched dedicated horseracing
channel, with 1.2m different individuals tuning
in every month to the channel, with an average
of 40,000–50,000 people watching at any time
during live racing. The channel also had an
average daily audience reach of over 200,000
different individuals. On one day alone,
over 360,000 different individuals tuned 
into the channel.
ATR’s aim of growing the popularity of UK and
Irish racing at home and abroad is achieved 
by the channel being free to view within basic
subscription packages. So, rather than its
viewers paying an additional subscription,
thereby limiting the racing audience, ATR
generates advertising revenue. On an
annualised basis compared to 2004,
advertising and sponsorship revenues in 
2005 grew by over 240%.With effect from 
1 January 2006, Sky Media, the advertising
sales division of BSkyB and the biggest media
sales operation within the domestic multichannel
marketplace, was appointed to handle all
advertising sales in the UK and Ireland. In
2006, it is anticipated that ATR will be able 
to both grow its advertising revenue further
and improve the quality of advertising that 
the channel attracts. So far in 2006, brand
count, which reﬂects the number of different
advertisers buying airtime on ATR, is up 
year on year by more than 50%.
ATR’s website, attheraces.com, has
established itself as the number two domestic
horseracing website, with nearly 300,000
monthly unique users and over 20 million
monthly page impressions. In January 2006,
it streamed over 240,000 live and archive
video streams.
The development of ATR’s distribution
opportunities included the launch of an online
streaming service, ‘Bet and Watch’. This is now
available on six bookmaker partner websites
and enables customers to watch high quality
video streaming once they have placed a bet
on an ATR broadcast race, with ATR earning 
a commission. ATR has seen double-digit
percentage growth of downloaded streams on
a monthly basis since launch. Agreements are
in place for the roll-out of this product across 
a number of additional bookmaker websites.
The big picture
At The Races is watched by 1.2 million
individual viewers per month
throughout the UK and Ireland
ATR website
In January 2006 the ATR website
streamed over 240,000 live and
archive video streams 14 Arena Leisure Plc Annual Report 2005
Building for the future
Doncaster Racecourse is one of the UK’s premier racing venues and 
home to the world’s oldest classic horserace, the St Leger. The £32 million 
re-development that is underway will ensure that it ranks amongst the 
top racecourses in the country . Arena Leisure Plc Annual Report 2005 15 16 Arena Leisure Plc Annual Report 2005
Chief Executive’ s review continued
Arena had been in discussions with the
racecourse’s owner, Doncaster Metropolitan
Borough Council (the ‘Council’), for some 
time and, in 2005, managed the racecourse 
on its behalf receiving a fee of £0.5m.
A redevelopment of the racecourse was 
the agreed route forward as, although the
racecourse regularly attracts attendances in
excess of 200,000 per year to its 29 meetings,
in recent years, the facilities have, in places,
become somewhat tired and dated.
In December, agreement was reached for 
an Arena subsidiary to acquire the rights 
to redevelop and operate Doncaster
Racecourse on a 99-year lease, commencing
upon completion of the redevelopment. Arena
owns 81% of this subsidiary , with the Council
owning the remaining 19%. Importantly , over
the ﬁrst 30 years of the racecourse’s operation
following its redevelopment, Arena will 
receive 92.5% of the proﬁts, with the Council
receiving the balance.
This agreement followed the receipt in
November 2005 of detailed planning
permission for the redevelopment of the
racecourse. The outdated Y orkshire Stand 
and exhibition hall will be demolished and
replaced by a state-of-the-art grandstand 
and new conference and exhibition facilities.
These will provide Doncaster’s customers with
the quality of accommodation that they should
expect from such a prestigious racecourse.
Elsewhere around the racecourse, there will
be a refurbishment of the adjacent St Leger
Stand and construction of a new stable block
next to the racecourse and an adjoining new
stable lads’ hostel.
This is an ongoing process. In 2005, £0.5m 
was spent replacing an outdated weighing
room at Southwell with a new and enlarged
building, providing improved facilities for
jockeys and ofﬁcials and also owners and
trainers, all of whom have warmly welcomed
the improvements.
In 2006, work has also started on the
construction of a new golf clubhouse at
Southwell to replace the outdated existing
building at an estimated cost of £0.6m, and
major work has started at Worcester to
undertake a refurbishment of the grandstand
and to provide new stables. The cost of the
Worcester project is around £1.25m. These 
two projects largely complete the overhaul 
of the facilities that Arena has acquired and,
as a result, the level of expenditure on more
‘routine’ capital projects should now have
reached a relatively stable level. One further
project that started this year is the ‘camera
patrol’ project mentioned earlier. At a cost of
around £1.0m, bringing this important function
in-house will yield cost savings of around
£0.25m per year.
Over the coming years, assuming that the
appropriate planning permissions are
received, capital expenditure will now 
be focused on major revenue enhancing
projects. The ﬁrst of these projects that will
come to fruition is the redevelopment of
Doncaster Racecourse.
Doncaster Racecourse is one of the UK’s major
racecourses, hosting the opening race of the
ﬂat racing season, as well as the last classic 
of the season – the 229-year old St Leger
Festival. The St Leger is currently sponsored
by Ladbrokes and is the oldest classic
horserace in the world.
Southwell Golf Club
A new clubhouse is under
construction that will dramatically
improve the golﬁng facilities
Doncaster Racecourse
Artist’s impression of the new
grandstand and exhibition centre
now under construction
Arena continues to progress a number 
of exciting development opportunities at its
courses including the re-development of
Doncaster Racecourse which commenced 
in January 2006. Arena Leisure Plc Annual Report 2005 17
The redevelopment commenced in January
2006 and is expected to last around 19 months,
with the racecourse re-opening in time for the
Ladbrokes St Leger meeting in September
2007. The 2006 St Leger meeting will take
place at Y ork, with the majority of Doncaster’s
remaining ﬁxtures transferred around the
Arena group.
Arena’s aim is to return Doncaster Racecourse
to its position as one of the UK’s pre-eminent
racecourses. In total, the redevelopment will
cost around £32m, of which Arena will be
providing around £28m, mainly in the form 
of guarantees for bank loans.
Following the agreement, Arena will receive 
no further management fees; instead 
incurring costs as the remainder of the
racecourse is maintained and stafﬁng levels
begin to increase towards the end of the 
year in anticipation of the re-opening of the
racecourse in 2007.
Work has also commenced on developing 
a planning application for a second phase
development – a hotel and residential
development on land adjacent to the
racecourse. It is hoped that this will be
submitted later this year.
Arena also looks to develop new or expanded
revenue streams from its existing racecourses.
Unfortunately , the ﬁrst such project, a casino
and hotel expansion as part of Arena’s attempt
to maintain and develop its Wolverhampton
Racecourse, was rejected in July by the Ofﬁce
of the Deputy Prime Minister, despite support
by Wolverhampton City Council. The
development was viewed as negatively
impacting upon the ‘openness’ of the Green
Belt location in which it is situated. Arena
awaited W olverhampton’ s revised Unitary
Development Plan to see whether the
racecourse would be removed from the 
Green Belt, thereby signiﬁcantly improving 
the chances of a successful re-application.
It now appears likely that the racecourse is 
to remain within the Green Belt and so we are
currently re-evaluating our options. As a result,
we have written off as a charge to operating
proﬁt in 2005 £0.4m of the expenditure
incurred on the original ‘racino’ design.
Nevertheless, we remain determined to
progress with a regeneration of the racecourse
involving the expansion of the hotel, together
with complementary leisure facilities.
The submission of a detailed planning
application for a redeveloped grandstand and
new hotel at our Royal Windsor Racecourse
has been awaiting the outcome of a feasibility
report into our ﬁnancial justiﬁcation for the
development, commissioned by The Royal
Borough of Windsor and Maidenhead. This
report has only recently been completed 
by the Borough’s independent consultants.
Lingﬁeld Park development
Artist’s impression of the proposed
integrated leisure building at
Lingﬁeld Park; incorporating racing,
hotel, golf and leisure facilities
Lingﬁeld Park masterplan
Proposed consolidation and
improvement of the operational
core of the racecourse
The report, in part necessitated by the
considerable sensitivity of development on
Green Belt land, appears broadly supportive 
of the need for the proposed scheme.We await
the Borough’s reaction to the report. In the
meantime, we will complete our work on 
the preparation of the detailed planning
application in readiness for its submission
shortly .We hope that this development, which
is essential to safeguard this important leisure
facility in Windsor, will receive local authority
approval. However, due to a number of factors,
Royal Windsor Racecourse is a sensitive site in
planning terms and so the processes that must
be completed in order to present a realistic
possibility of achieving full planning consent
are considerably more onerous than might
otherwise be expected. This development,
should it receive planning permission, is
expected to cost in the region of £38m.
Following the refurbishment of the main
grandstand and provision of a new All Weather
track within the last three years, it is anticipated
that Lingﬁeld Park Racecourse will submit an
outline planning application in March 2006 to
demolish two redundant stands and to replace
them with a new integrated leisure building.
This new building, to be known as the Silks, will
incorporate improved racing administration
and entertaining facilities, a greatly improved
leisure club with a pool, a new 120-bedroom
hotel and a new replacement golf clubhouse.
The redevelopment, subject to it receiving
planning permission, is expected to cost
around £25m and will dramatically improve
Lingﬁeld Park, allowing it to compete with the
extensive competition from other developing
racecourses in the south-east region.
I am hopeful of a positive outcome as the
redevelopment also involves the removal of
numerous smaller buildings from around the
racecourse and so will allow the return of 
a sizeable area of currently developed land
back to Green Belt. The process to date has
included an extensive consultation exercise,
including a recent public exhibition.We 
will continue to work closely with all local
stakeholders to help ensure that this exciting
development has the best possible chance 
of success.
Arena Leisure possesses a number of 
exciting growth opportunities and I am
optimistic that the Company is now well 
placed to deliver them.
Mark Elliott
Chief Executive
28 February 2006  18 Arena Leisure Plc Annual Report 2005
Financial review
these one-off items, underlying proﬁt from
operations increased by 21.6% to £6.3m
(2004: £5.2m).
Proﬁt from racecourse operations (adjusted 
for the one-off impairment charge in respect 
of Wolverhampton) increased by 15.4% to
£8.4m (2004: £7.3m), notwithstanding a £0.6m
reduction in income from licensed betting
ofﬁces (‘LBOs’) principally as a result of a
reduction in the amount payable for regional
races in 2005.
The six Arena owned racecourses operated
324 race meetings in 2005, an increase of 3%
on the prior year (2004: 315). This included a
number of ﬂat and national hunt race meetings
transferred to the group from Ascot Racecourse
on a temporary basis during its redevelopment.
The group also operated a further 29 race
meetings at Doncaster Racecourse during
2005 under a management contract with
Doncaster Metropolitan Borough Council.
International Financial Reporting Standards
The Annual Report and Accounts for the year
to 31 December 2005 have been prepared for
the ﬁrst time in accordance with the accounting
policies and presentation required under
International Financial Reporting Standards 
as adopted by the EU (‘IFRS’). Comparative
information for the year ended 31 December
2004 has been restated on an IFRS basis.
Results overview
Group turnover for the year to 31 December
2005 shows a 9.4% increase to £40.7m 
(2004: £37.2m) and proﬁt from operations
reported under the new IFRS format increased
by 30% to £6.7m (2004: £5.2m). This includes a
proﬁt of £0.8m from the sale of shares in Satellite
Information Systems (‘SIS’) and an impairment
charge of £0.4m, in respect of the carrying
value of costs incurred in relation to a proposed
hotel extension and casino development at our
Wolverhampton Racecourse. Adjusting for
At The Races’operating performance
improved signiﬁcantly in its ﬁrst full year 
of operation since its re-launch. Arena Leisure Plc Annual Report 2005 19
Under IFRS the group is required to disclose
the post tax share of At the Races’ operating
result on the face of the income statement
which was a loss of £1.5m (2004: proﬁt £0.6m).
The group’s share of the results of its 30%
associated company Trackplay LLC for the
year to 31 December 2005, after adjusting for
movements in exchange rates, was a proﬁt of
£0.02m (2004: loss £0.04m). The board does
not consider Arena’s investment in Trackplay 
to be core to its future operating strategy and
has indicated a desire to dispose of its share 
of the business in due course. Proceeds from
this potential disposal are not expected to 
be signiﬁcant and, as a result, the board 
has written down the carrying value of its
investment to nil at 31 December 2005. An
impairment provision of £0.3m has been
charged to the income statement in 2005.
Proﬁt before tax for the year to 31 December
2005 was £4.5m (2004: proﬁt £4.9m).
Basic earnings per share from continuing
operations were 1.24 pence (2004: 1.41
pence). An adjusted earnings per share 
from continuing operations (adjusted for 
one-off items of income and expenditure 
in 2004 and 2005 – Note 2) was 1.32 pence
(2004: 0.32 pence).
Attendance at the group’s owned tracks
increased by 6% in the year to a record
534,000 (2004: 504,000) with corporate
attendance increasing by 17% to 47,600 
(2004: 40,500). The focus on improving the
quality of the group’s racecourse facilities
showed through with total attendance related
income increasing by circa 20% on the 
prior year.
The group has continued to progress
improvements in operating efﬁciency and
during the year has beneﬁted from the
rationalisation of picture transmission from 
the group’s racecourses and the introduction 
of its own in-house starting stalls and photo
ﬁnish operations. This, together with improved
media rights income from the group’s joint
venture At The Races, made a positive
contribution to the improvement in racecourse
proﬁts for the year.
Arena’s central costs were maintained at £2.1m
(2004: £2.1m).
The underlying operating performance of
Arena’s 47.5% owned joint venture ‘At The
Races’ improved signiﬁcantly in its ﬁrst 
full year of operation since its relaunch in 
June 2004. Arena’s share of At The Races,
adjusted operating loss for 2005 (adjusted for
exceptional legal costs of £0.9m, consortium
relief tax credit of £0.5m and interest of £0.1m)
was a loss of £1.0m. This represents a 73%
improvement over the prior year adjusted 
loss (2004: £3.7m).
Highlights
• Turnover increased by 9.4% to £40.7m (2004: £37.2m)
• Proﬁt from operations increased by 30.0% to £6.7m (2004: £5.2m)
• Adjusted proﬁt from operations increased by 21.6% to £6.3m (2004:
£5.2m), after adjusting the 2005 result for one-off gains and losses
• Arena’ s share of At The Races’ adjusted operating loss reduced 
by 73.0% to £1.0m (2004: £3.7m)
• Proﬁt before tax of £4.5m
• Adjusted earnings per share increased by 312% to 1.32 pence 
(2004: 0.32 pence)
• Proposed ﬁnal dividend of 0.2 pence per share, giving a total 
dividend of 0.45 pence per share – an increase of 50% 
(2004: 0.3 pence per share)
05
04
03
02
Attendance
’000
534
504
475
420
05
04
03
02
Race Meetings
324
315
247
235 20 Arena Leisure Plc Annual Report 2005
Financial review continued
Racecourse and £0.6m incurred up to 31
December 2005 on camera equipment which
will be used in bringing the camera patrol
element of racing broadcast in-house in 2006.
Treasury report
All bank borrowings and ﬁnancial assets of 
the group are held in sterling and on ﬂoating
interest rates. In the current economic climate,
and with low levels of debt, hedging for interest
rate risk is not considered appropriate.
However, the board constantly monitors the
ﬁnancial markets to ensure this policy remains
in Arena’s interest. Arena does not face any
signiﬁcant foreign currency risk.
At 31 December 2005 Arena had available
unutilised bank facilities of £4.7m. Short-term
liquidity risk is managed by obtaining and
reviewing the adequacy of banking facilities.
Arena does not use derivative ﬁnancial
instruments to manage risk.
Interest is charged on the bank overdraft at 1%
over Bank of Scotland base rate. Interest on 
the revolving credit loan facility is charged at
either 1% over Bank of Scotland base rate or
1% over LIBOR. The bank loan and overdraft
are secured by a ﬁxed and ﬂoating charge 
on the assets and undertakings of the group
companies, and a ﬁrst legal charge on all the
freehold and leasehold properties owned by
the group. This security is subject to deeds 
of priority and permitted charges in favour 
of the Horserace Betting Levy Board (‘HBLB’) 
in respect of security for interest free loans
provided to the group, which total £0.6m at 
31 December 2005 (2004: £1.0m).
Impairment reviews
Goodwill – Racecourse acquisitions
Under IFRS, goodwill is no longer amortised,
but is subject to annual impairment reviews.
The carrying value of goodwill arising from the
group’s racecourse acquisitions was reviewed
by the board at 31 December 2005. The
review was based on the anticipated level of
proﬁtability and cash ﬂow from the group’s
racecourse operations for the coming year.
As a result of this review , the Board considers
that no impairment provision is necessary .
Goodwill on investment and loans to 
At The Races 
At 31 December 2005 the Board reviewed the
carrying value of goodwill on its investment 
in At The Races and of loans made to the joint
venture as at 31 December 2005. This was
based upon the forecast results of the business
provided by the management of At The Races.
As a result of this review the Board considers
that no impairment provision is necessary .
Capital expenditure
During the year, Arena has invested £5.2m on
capital expenditure of which £1.7m represents
professional fees and expenses relating to 
the planning and advancement of major
development projects at Doncaster, Lingﬁeld
Park,Windsor and Wolverhampton. The
balance of £3.5m, represents a mixture of
operational capital expenditure and smaller
development projects. This includes £0.5m in
respect of the expansion and improvement of
weighing room facilities at Southwell
In December 2005 Arena entered into new
enlarged bank facilities in connection with
the re-development of Doncaster Racecourse. Arena Leisure Plc Annual Report 2005 21
Dividends
The board has proposed a ﬁnal dividend 
for 2005 of 0.2 pence per share payable on 
12 May 2006 to those shareholders on the
register on 31 March 2006. This, in addition 
to the interim dividend of 0.25 pence per 
share paid in October 2005 will result in a total
dividend for the year of 0.45 pence per share
(2004: 0.3 pence per share). In accordance
with IFRS, as a result of the ﬁnal dividend
having been declared in 2006 no provision 
for this liability has been made as at the
balance sheet date of 31 December 2005.
R Mercer
Chief Financial Ofﬁcer
28 February 2006
In December 2005 Arena Leisure Plc 
and its subsidiary , Doncaster Racecourse
Management Company Ltd, entered into 
a new bank facility agreement with Bank 
of Scotland in connection with the future
redevelopment of Doncaster Racecourse.
The bank facilities were entered into subject 
to the satisfaction of speciﬁc conditions
precedent which at 31 December 2005 were
incomplete but have since been met in full.
The new bank facilities are as follows:
Arena Leisure Plc and principal operating
subsidiaries excluding Doncaster Racecourse
Management Company Limited:
Overdraft facility of up to £5m
Revolving credit facility of up to £10m
Term loan facility of £10m
Doncaster Racecourse Management Co Ltd:
Overdraft facility of up to £1.5m
Term loan facility of up to £22.5m 
Taxation
There is no current year tax charge due 
to the group’s continued use of HBLB 
capital credits and the availability of brought
forward tax losses. At 31 December 2005
corporation tax losses representing trading
and non trading losses of £54,777,000 
(2004: £58,309,000) were available 
for utilisation in future years subject to 
agreement with HM Customs & Revenue. 22 Arena Leisure Plc Annual Report 2005
Corporate social responsibility
Health and safety
Arena is making continued progress to ensure
that our racecourses remain safe and healthy
places for our employees, visitors and
participants in the sport of racing. Arena is
represented on the Racecourse Association
(‘RCA’) Safety Advisory Group which works 
to develop and establish best practice 
in respect of health and safety systems 
and practice on racecourses.
Asbestos surveys have been carried out 
at each of our racecourses and asbestos
registers are maintained together with an
asbestos management programme to 
ensure that safe systems of work continue 
to be maintained.
Good training is a crucial factor in any
successful health and safety management
programme. In addition to the routine 
safety training programmes in place at 
each racecourse, health and safety is 
also incorporated into the group’s senior
management training programmes. Arena
employs a Group Health and Safety Manager
with Diploma in Safety Management and
National Education Board of Safety and Health
(‘NEBOSH’) qualiﬁcations, along with staff 
who hold Institute of Safety and Health (‘IOSH’)
qualiﬁcations. Parade ring safety was a
particular focus of attention in 2005 with the
introduction of a new role – Parade Ring Safety
Ofﬁcers. These members of staff are chosen
for their horse awareness ability and will
monitor the behaviour of horses and the
awareness of spectators in potentially volatile
areas such as the parade ring and winners
enclosure. Their role being to ensure that 
the racecourse safety policies and standards 
of safety are maintained in these areas.
Introduction
There is growing interest from shareholders
and the investment community in general
about the corporate social activities of
businesses. This reﬂects a wish to be satisﬁed
that businesses are behaving responsibly 
in their relationships with employees, the
community and stakeholders in general.
Arena has always sought to manage these
relationships in a professional, fair and
responsible manner and has developed
internal policies and procedures to govern 
its behaviour.We are therefore pleased to
include the following information which provides
an overview of the policies and procedures
that guide Arena’s approach to the key aspects 
of Corporate Social Responsibility (‘CSR’).
Environment
Occupying over 1,200 acres of real estate in
seven locations, Arena takes its environmental
responsibilities extremely seriously .We follow
all current guidelines with regards to waste
disposal and have introduced waste manage-
ment programmes across the group. This has
highlighted increased recycling opportunities.
Water for irrigation is drawn, whenever
possible, from natural sources under licence.
Our Polytrack All Weather surfaces at Lingﬁeld
Park and Wolverhampton contain recycled
rubber products, and temporary stable 
bedding is collected from our racecourses 
and recycled whenever possible.
W e believe in behaving
responsibly in our
relationships with
employees,the community
and stakeholders Arena Leisure Plc Annual Report 2005 23
Society and community
Arena believes that its racecourse operations
make an important contribution to a visitor’s
well-being, the quality of their leisure time and
their enjoyment of a day in the countryside.
W e are members of the Chamber of Commerce
in Wolverhampton and represent ourselves 
on all relevant community associations, such 
as Whitmore Reans In Partnership (‘WRIP’).
We have a policy of aiming to ‘be a good
neighbour’ in the way that our racecourses 
are run, examples of which include crowd
control, easy parking and control of trafﬁc.
Arena strives to support local charities in
terms of prizes for their rafﬂes and is active 
in promoting responsible gambling.
Customers
With regard to facilities for the disabled,
Arena strives to be disability positive.
Disability Discrimination Act (‘DDA’) access
audits have been carried out at all of our
racecourses and have conﬁrmed that we
remain compliant with the DDA legislation.
Work has been undertaken to ensure that staff
are fully aware of the legislation and the access
needs of customers with varying degrees of
mobility . ‘Welcome All’ training programmes 
to assist with DDA compliance requirements
are mandatory on our racecourses to ensure
that all our customers can enjoy themselves
and our facilities at their best. A DDA Council
disability positive accreditation has been
awarded to each of Wolverhampton, Southwell
and Worcester racecourses.Arena has several
British Sign Language Certiﬁcate holders
amongst its staff. Southwell racecourse has
been appraised and approved by the Leonard
Cheshire Organisation in respect of mobility ,
sight and hearing issues.
Staff and corporate development
During the year Southwell Racecourse
achieved the Investors in People (‘IIP’)
accreditation standard. This follows on from
W olverhampton who achieved IIP accreditation
in 2004. This very important development
standard is also being pursued at the group’s
other racecourses.
3 2 1
1 Polytrack
Our Polytrack racing surface
contains recycled materials
2 Control
T rafﬁc management ensures minimal
disruption on local roads
3 Animal welfare
Strict standards for racecourse
stabling are set by the Jockey 
Club and adhered to across all 
our racecourses
‘W elcome All’
training programmes
to assist with DDA
compliance
requirements are
mandatory on our
racecourses 24 Arena Leisure Plc Annual Report 2005
Board of directors
12
34
5 Arena Leisure Plc Annual Report 2005 25
2 Mark Elliott
Chief Executive
Aged 40, Mark was appointed Chief Executive
on 1 October 2005. Mark is the former Chief
Executive of Wembley Plc, having previously
been its Finance Director, and brings a wealth
of experience relevant to Arena. During Mark’s
seven year tenure on the Board of Wembley ,
the company operated ten greyhound tracks
across the UK and USA and one horse racing
track in the US as well as Wembley Stadium,
W embley Arena and a variety of businesses
providing services to UK leisure venues.
4 Raymond Mould
Non-Executive Deputy Chairman
Aged 65, Raymond, a qualiﬁed solicitor,
is a highly regarded businessman with a 
long track record of corporate achievement 
and close association with the horseracing 
and property industries. He is currently
Chairman of London & Stamford Investments
Ltd and was Executive Chairman of Pillar
Property Plc until July 2005 when it was acquired
by British Land Plc. He is also Chairman 
of Fleming Family & Partners Russia Real
Estate Limited.
1 Roger Withers
Chairman 
Aged 63, Roger has been involved at a senior
level in the betting, gaming and leisure industries
in the UK and internationally for over 30 years
with Ladbrokes, Bass, Littlewoods and
Sportech. Posts held include Managing
Director of Coral, Chairman of Bass Leisure
South Africa and Littlewoods Leisure. He is 
also a Director of FireOne Group Plc. Roger
became Chairman of Arena in October 2001.
3 Ian Renton
Executive Director
Aged 47, Ian has held the position of Racing
Director since he joined Arena in 2001.
He has extensive racing experience including
manager and clerk of the course at Salisbury ,
Wincanton and Aintree. A respected ﬁgure
throughout racing, Ian is an RCA board member
and sits on various British Horseracing Board
and Industry advisory groups.
5 Andrew H Parker Bowles OBE
Non-Executive Director
Aged 66, Andrew has extensive experience
and interests in the racing industry . He was 
a Director of the British Horseracing Board 
from 1997 to 2000, a member of the Jockey
Club since 1982 and, for four years, was 
the Jockey Club Steward responsible for all 
59 racecourses. An owner, rider and breeder
of racehorses, he was a Director of United
Racecourses from 1995 to 1999 and a director
of R.A.M. Racing Leisure Limited from 1996 
to 1999. Andrew is a Non-Executive Director 
of two other companies and a Trustee 
or Governor of eight charities including
Chairman & Founder of the Re-training of
Racehorses charity . Andrew joined Arena 
in September 1999. 26 Arena Leisure Plc Annual Report 2005
Directors’report
The directors present their annual report together with the audited
ﬁnancial statements for the year to 31 December 2005.
Results 
The results of the group are set out on page 34.
The group
Pre-tax proﬁt for the year to 31 December 2005 was £4,489,000 
(year to 31 December 2004: proﬁt £4,908,000). Group proﬁt on
ordinary activities after tax was £4,489,000 (2004: proﬁt £5,103,000).
Dividend
The directors recommend that a ﬁnal dividend of 0.2 pence per 
share be paid on 12 May 2006 to those shareholders registered 
on 31 March 2006.
Principal activity and business review
The principal activities of the group during the year were the ownership
and operation of racecourses; and the worldwide broadcast and
exploitation of racecourse media rights via the group’s shareholding
in its At The Races joint venture.
A review of business is included in the Chief Executive’s review on 
pages 4 to 17.
Directors
The directors who held ofﬁce during the year to 31 December 2005
(unless otherwise indicated) were as follows:
R D Withers
M J Elliott (appointed 1 October 2005)
I R Penrose (resigned 30 September 2005)
R I Renton
M J Barnes (resigned 31 October 2005)
H R Mould (appointed 1 November 2005)
A H Parker Bowles OBE
In accordance with the Articles of Association, A H Parker Bowles 
will retire by rotation at this year’s annual general meeting and being
eligible, offers himself for re-election. R D Withers will also retire at 
the annual general meeting but will not seek re-election. M J Elliott 
and H R Mould, having been appointed during the year will also 
retire and being eligible, offer themselves for election.
Directors’ interests in shares
The following table shows the beneﬁcial interests of the directors who held ofﬁce at 31 December 2005 in the ordinary shares of the company:
Fully paid ordinary shares in the company
At 31 December At 31 December
2005 2004*
R D Withers 85,000 85,000
M J Elliott – –
R I Renton 30,000 –
H R Mould 100,000 100,000
A H Parker Bowles OBE 42,000 42,000
*Or at date of appointment if later.
No changes to the above interests in shares have been notiﬁed to the company in the period from 31 December 2005 to 28 February 2006.
The directors’ holdings of options over ordinary shares in the company are noted in the Remuneration report on pages 31 to 33. Arena Leisure Plc Annual Report 2005 27
The mid-market price of Arena Leisure Plc ordinary shares at 
31 December 2005 was 41.0 pence. High and low prices were 
47.25 pence and 36.25 pence respectively over the period.
The group’s insurance programme includes policies to insure the
directors and senior ofﬁcers of the company against claims made
against them personally as a result of the performance of their 
duties for the group.
Creditors’ payment policy and practice
The group’s policy is to ﬁx payment terms when agreeing business
transactions, to ensure that suppliers are aware of such terms and
normally abide by the agreed terms of payment. The number of days’
purchases which were represented by year end group trade creditors
was 62 (company 55).
Employment of disabled persons
The group is committed to a policy of recruitment and promotion on
the basis of aptitude and ability without discrimination of any kind.
Management actively pursues both the employment of disabled
persons whenever a suitable vacancy arises, and the continued
employment and retraining of employees who become disabled
whilst employed by the company . Particular attention is given to the
training, career development and promotion of disabled employees
with a view to encouraging them to play an active role in the
development of the company .
Environmental issues
The group is committed to minimising its impact on the environment
by maintaining a continuous, group-wide assessment and awareness
of its environmental responsibilities. The group’s policy is to meet and,
where practical, exceed the requirements of all applicable legislation
and standards. Furthermore, the group is conscious of its position and
responsibilities in the community and, at all practicable opportunities,
endeavours to support initiatives taken in the vicinity of our racecourses.
Employee involvement
The communication of information to employees is carried out
through regular management meetings at a national, regional and
local level with staff brieﬁngs and notices as appropriate.
Financial instruments
Disclosures in respect of ﬁnancial instruments are made in Notes 24
and 25 to the IFRS ﬁnancial statements.
Substantial shareholders
The directors have been made aware of the following other interests, in addition to the interests of the directors, representing 3% or more of the
issued ordinary share capital of the company as at 24 February 2006:
Ordinary shares % of issued
of 5p share capital
Guild V entures 127,663,217 35.1
Rumney Manor Ltd 22,000,000 6.0
Uberior Investments Plc 18,647,003 5.1
Goldman Sachs International 16,500,000 4.5 28 Arena Leisure Plc Annual Report 2005
Directors’report continued
Directors’ responsibilities
The directors are responsible for keeping proper accounting 
records which disclose with reasonable accuracy at any time the
ﬁnancial position of the company , for safeguarding the assets, for
taking reasonable steps for the prevention and detection of fraud and
other irregularities and for the preparation of a directors’ report and
directors’ remuneration report which comply with the requirements 
of the Companies Act 1985.
Financial statements are published on the group’s website in
accordance with legislation in the United Kingdom governing the
preparation and dissemination of ﬁnancial statements, which may 
vary from legislation in other jurisdictions. The maintenance and
integrity of the group’s website is the responsibility of the directors.
The directors’ responsibility also extends to the ongoing integrity 
of the ﬁnancial statements contained therein.
The directors are responsible for preparing the Annual Report 
and the ﬁnancial statements. The directors are required to prepare
ﬁnancial statements for the group in accordance with International
Financial Reporting Standards (‘IFRS’) and have chosen to prepare
ﬁnancial statements for the company in accordance with UK GAAP .
Group ﬁnancial statements
Company law requires the directors to prepare such ﬁnancial
statements in accordance with International Financial Reporting
Standards, the Companies Act 1985 and Article 4 of the IAS Regulations.
International Accounting Standard 1 requires that ﬁnancial statements
present fairly for each ﬁnancial year the company’s ﬁnancial position,
ﬁnancial performance and cash ﬂows. This requires the faithful
representation of the effects of transactions, other events and
conditions in accordance with the deﬁnitions and recognition criteria
for assets, liabilities, income and expenses set out in the International
Accounting Standards Board’s ‘Framework for the preparation and
presentation of ﬁnancial statements’. In virtually all circumstances,
a fair presentation will be achieved by compliance with all applicable
International Financial Reporting Standards. A fair presentation also
requires the directors to:
• Consistently select and apply appropriate accounting policies.
• Present information, including accounting policies, in 
a manner that provides relevant, reliable, comparable 
and understandable information.
• Provide additional disclosures when compliance with the speciﬁc
requirements in IFRS is insufﬁcient to enable users to understand
the impact of particular transactions, other events and conditions
on the entity’s ﬁnancial position and ﬁnancial performance.
Parent company ﬁnancial statements
Company law requires the directors to prepare ﬁnancial statements
for each ﬁnancial year which give a true and fair view of the state of
affairs of the company and of the proﬁt or loss of the company for 
that period. In preparing these ﬁnancial statements, the directors 
are required to:
• Select suitable accounting policies and then apply 
them consistently .
• Make judgements and estimates that are reasonable 
and prudent.
• State whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the ﬁnancial statements.
Going concern
The directors conﬁrm that, after making enquiries, they have 
a reasonable expectation that the company and group has adequate
resources to continue in operational existence for the foreseeable
future. For this reason they continue to adopt the going concern 
basis in preparing the ﬁnancial statements.
Annual general meeting
The notice convening the annual general meeting of the company 
on 8 May 2006 is on page 62.
Auditors
BDO Stoy Hayward LLP have expressed their willingness to continue
in ofﬁce and a resolution to re-appoint them will be proposed at the
annual general meeting.
By order of the board
Robert Mercer FCMA
Company Secretary
28 February 2006
Registered ofﬁce:
1 Hay Hill
Berkeley Square
London W1J 6DH Arena Leisure Plc Annual Report 2005 29
Corporate governance
There is commitment to high standards of corporate governance
throughout the group. Following publication of the Higgs Review – 
The Role and Effectiveness of Non-executive Directors and the 
Smith Report – Combined Code Guidance for Audit Committees 
in January 2003, the Financial Reporting Council issued the 
new Combined Code on 23 July 2003, which came into effect 
for reporting years beginning on or after 1 November 2003. The
principles and provisions of the new Code have been considered 
by the board. The board conﬁrms that throughout the year ended 
31 December 2005 the group has complied with the main and
supporting principles as set out in the new Combined Code,
except that non-executives are not appointed for speciﬁed periods.
The board is accountable to the company’s shareholders for good
governance and the statement set out below describes how the
principles identiﬁed in the new Combined Code (appended to the
listing rules) are applied by the group.
Directors
The board consists of a non-executive Chairman, Roger Withers,
two non-executive directors, Raymond Mould (Deputy Chairman) 
and Andrew Parker Bowles, and two executive directors, Mark Elliott
and Ian Renton, of which Mark Elliott is the Chief Executive. Both 
of the non-executive directors are considered by the board to be
independent of management and free of any relationship which could
materially interfere with the exercise of their independent judgement.
Biographies of the board members appear on page 25 of this report.
These indicate the high levels and range of business experience
which is essential to manage effectively a business of the size and
complexity of the group. The group continues to experience rapid
growth, and the board is aware of its responsibilities to strengthen 
the board at appropriate times in the group’s development.
The board meets at least 12 times each year and has a schedule 
of matters reserved to it for decision. The requirement for board
approval on these matters is communicated widely throughout 
the senior management of the group. This includes matters such 
as material capital commitments, commencing or settling major
litigation, business acquisitions and disposals, and appointments 
to subsidiary company boards.
There is an agreed procedure for directors to take independent
professional advice if necessary and at the company’s expense.
This is in addition to the access which every director has to the
company secretary .
The differing roles of Chairman and Chief Executive are 
acknowledged and deﬁned in separate statements approved by 
the board. The key functions of the Chairman are to conduct board
meetings and meetings of shareholders and to ensure that all 
directors are properly briefed in order to take a full and constructive
part in board discussions. The Chief Executive is required to develop 
and lead business strategies and processes to enable the group’s
business to meet the requirements of its shareholders.
The senior non-executive director is Raymond Mould and any
concerns relating to the executive management of the company ,
or the performance of the other non-executive directors, can be 
raised with him.
Any director appointed during the year is required, under the provisions
of the company’s Articles of Association, to retire and seek election 
by shareholders at the next annual general meeting. The Articles also
require that one third of the directors retire by rotation each year and
seek re-election at the annual general meeting. The directors required
to retire will be those in ofﬁce longest since their previous re-election
and this will usually mean that each director retires at least every 
three years, although there is no absolute requirement to this effect.
In order to comply with the new Combined Code, but avoid the
expense of amending the company’s Articles to deal with this single
point, the board has resolved that each director will retire at least
every three years, even if this is not strictly required by application 
of the provisions of the Articles.
Full details of directors’ remuneration and a statement of the company’s
remuneration policy is set out in the Remuneration report appearing
on pages 31 to 33. The members of the Remuneration Committee 
and the principal terms of reference of the Committee appear on
page 31. Executive directors abstain from any discussion or voting 
at full board meetings on Remuneration Committee recommendations,
where the recommendations have a direct bearing on their own
remuneration package. The details of each executive director’s
individual package are ﬁxed by the Committee in line with the 
policy adopted by the full board.
Nomination Committee
The members of the Nomination Committee are H R Mould
(Chairman) who was appointed on 1 November 2005, R D Withers 
and A H Parker Bowles. M J Barnes served as Chairman of the
nomination committee until his resignation on 31 October 2005.
The Committee meets as required, but not less than once a year.
Its responsibilities include reviewing the board structure, size 
and composition, nominating candidates to the board to ﬁll board
vacancies when they arise, and recommending directors 
who are retiring by rotation to be put forward for re-election.
The Committee also ensures that all board appointees undergo
training as appropriate. 30 Arena Leisure Plc Annual Report 2005
Corporate governance continued
Audit Committee
The Audit Committee is scheduled to meet at least three times a year. It is comprised of R D Withers (Chairman), A H Parker Bowles 
and H R Mould from 1 November 2005. M J Barnes served as a member of the Audit Committee until his resignation on 31 October 2005.
Meetings are attended by senior representatives of the group’s external auditors and appropriate members of senior management.
Amongst other matters, the Committee considers the company’s annual and interim ﬁnancial statements and any issues raised by the 
auditors in relation to the ﬁnancial statements, ﬁnancial systems and internal control within the group.
The attendance at board and committee meetings by the directors and senior executives of the company during 2005 are as follows:
Board Remuneration Audit Nomination
meetings Committee Committee Committee
Number of meetings 12 3 3 2
Executive directors
I R Penrose – resigned 30 September 2005 10 – – –
R I Renton 12 – – –
M J Elliott – appointed 1 October 2005 2 – 1 –
Non-executive directors
R D Withers 12 3 3 2
M J Barnes – resigned 30 October 2005 11 3 1 2
A H Parker Bowles 12 3 3 2
H R Mould – appointed 1 November 2005 1 – – –
Executive management
R Mercer 12 – 3 –
Communication
The company places a great deal of importance on communication with
its shareholders. The full report and accounts are sent to all shareholders
and to other parties on request who have an interest in the group’s
performance. Shareholders also have direct access to the company ,
and the company responds to numerous letters and enquiries from
shareholders on a wide range of issues. There is regular dialogue with
individual institutional shareholders, and all shareholders have the
opportunity to put forward questions at the company’s annual general
meeting. The board makes a presentation at the meeting to highlight
the key business developments during the ﬁnancial year.
Audit and internal control
The respective responsibilities of the directors and the auditors in
connection with the accounts are explained on page 28 within the
Director’s report and page 61 in the report of the independent
auditors and the directors’ statement on going concerns appears 
in the Director’s report.
The directors are responsible for the company’s system of internal
control which is designed to provide reasonable but not absolute
assurance against material misstatement or loss. The key procedures
that the directors have established to provide effective internal
ﬁnancial controls are as follows:
Financial reporting: a detailed formal budgeting process for all group
businesses culminates in an annual group budget which is approved
by the board. Results for the company and for its main constituent
businesses are reported monthly against the budget to the board.
Financial and accounting principles: comprehensive ﬁnancial 
and accounting controls are required by the board for effective
ﬁnancial control.
Capital investment: the company has clearly deﬁned guidelines 
for capital expenditure. These include annual budgets, detailed
appraisal and review procedures, levels of authority and due 
diligence requirements where businesses are being acquired.
The board conﬁrms that there is an ongoing process for identifying,
evaluating and managing the signiﬁcant risks faced by the group,
which complies with the guidance ‘Internal Control: Guidance for
directors on the combined code’. This has been in place throughout
the current period and up to the date of approval of the ﬁnancial
statements. The process is regularly reviewed by the board.
Following publication of guidance for directors on internal control
(The Turnbull Guidance), the board conﬁrms its commitment to the
management of risk within the organisation. Information provided by
the group’s risk committee, internal management reporting, external
auditors and industry sources provides the basis on which the board
carries out its review; to identify , evaluate and manage any risk deemed
signiﬁcant to the achievement of the company’s strategic objectives.
The group does not have an internal audit function. Following the
necessary evaluation the board has concluded that due to the 
modest size of the group, a formal internal function is not required.
Limited internal audit work is however carried out by the group
ﬁnance department.
During the period under review , the group has operated a risk review
committee chaired by A H Parker Bowles. The committee is appointed
from members of the board (including M J Elliott (from 1 October 2005)
and R I Renton) and senior management. Its role is to identify , evaluate
and report formally to the board on signiﬁcant risk issues.
The Audit Committee will keep the scope and cost effectiveness 
of both internal controls and the external audit under review . The
independence and objectivity of the external auditors is also considered
on a regular basis, with particular regard to the level of non-audit fees.
The split between audit and non-audit fees for the year under review
appears on page 43. The non-audit fees were paid in respect of tax
advice and compliance work, due diligence reports and other advice
and are considered by the Audit Committee not to affect independence
or objectivity .
Two of the directors of the group are on the board of the group’s 
joint venture, At The Races. At least one of the group’s directors will
attend all signiﬁcant meetings of the joint venture, where they will use
their inﬂuence to ensure that the highest standards of internal control
are maintained.
The listing rules – the model code
Dealings in the company’s securities by directors and relevant
employees follow the terms of the model code. Arena Leisure Plc Annual Report 2005 31
Remuneration report
As well as complying with the provisions of the new Combined Code
as disclosed in the Corporate Governance Statement, the company
has applied the principles relating to directors’ remuneration as
described below .
Remuneration Committee
The Remuneration Committee consists of H R Mould (Chairman) who
was appointed on 1 November 2005, A H Parker Bowles and R D Withers.
M J Barnes served as Chairman of the Remuneration Committee until
his resignation on 31 October 2005.The Committee determines the
remuneration of all directors and of certain other senior executives
within the company .
Remuneration policy
The company’s remuneration policy is to pay individual directors 
a salary or fee at market levels for comparable jobs, recognising the
size of the company and the business sector in which it operates.
The following comprised the principal elements of executive
directors’ remuneration:
• Basic salary and beneﬁts.
• Annual bonus.
• Long-term incentives.
• Pension contributions into a deﬁned contribution
pension scheme.
It is group policy to ensure that there is a strong link between the 
level of directors’ remuneration and performance of the group.
Consequently only basic salaries and beneﬁts are ﬁxed. These ﬁxed
elements are recognised as being comparable with other companies.
The Remuneration Committee recognises that the long-term success
of the group is largely dependent on attracting executives of the
highest quality . Therefore each director can signiﬁcantly augment
their salary through annual bonuses and long-term incentives. The
group’s contributions to a deﬁned contribution pension scheme are
based on basic salary levels only .
In addition to the statutory vote to be held on this Remuneration report,
shareholders will be given the opportunity to ask the Chairman of 
the Remuneration Committee, HR Mould, questions on any aspect 
of the group’s remuneration policy .
The remuneration for non-executive directors consists of salary 
or fees for their services in connection with the board and board
Committee meetings. They are not eligible for pension scheme
membership. Their fees are determined by the executive directors
who have regard to the level of salary or fees paid to the non-
executives of similar companies.
Each element of remuneration payable to executive directors is
discussed in more detail below .
Basic salary and beneﬁts
Basic salaries for all executive directors are reviewed (but not
necessarily increased) annually by the Committee. In determining 
the level of basic salaries, the Committee will give consideration 
to the government’s published inﬂation statistics, salaries for
comparable positions and any signiﬁcant change in the role
performed by the director. The Committee also makes use of 
external remuneration consultants.
In addition to basic salaries, each executive director is entitled to the
following main beneﬁts:
• Chief Executive – 29 working days’ holiday per annum in addition to
normal bank and public holidays. Other executives – 25 working days
holiday per annum in addition to normal bank and public holidays
• A fully expensed company car or cash equivalent.
• Private health insurance for themselves, their spouse and children.
Annual bonus
In addition to a basic salary , the Chief Executive is entitled to an annual
performance related bonus of up to 60% of basic salary and other
executive directors of up to 50% of basic salary . Speciﬁc performance
criteria are set by the Committee at the commencement of the year
following approval of the group’s budgets and are primarily related 
to deﬁned strategic and ﬁnancial objectives of the group.
Long-term incentives – share options
The Committee believes that share ownership and the granting 
of options strengthens the link between executives’ personal 
interests and those of the shareholders. Speciﬁc performance 
criteria are linked to the exercise of options based upon growth 
in the share price. The grant of share options is at the discretion 
of the board. On 3 October 2005 MJ Elliott was granted options 
over 1,000,000 shares in the company .
Pension policy
Each of the executive directors is entitled to participate in the 
group’s deﬁned contribution pension scheme to which the company
will contribute 8% of basic salary . The pension scheme provides 
life insurance cover equal to four times basic salary .
Performance graph
The following graph compares the total return on the company’s
shares with that of the FTSE All-Share total return index over the last
ﬁve years. The reasons the company has chosen this particular index
are that it is considered the most likely benchmark by which the
majority of shareholders would want to assess their investment in 
a public company and it is generally less volatile over time than 
other market indices.
The board does not however consider that the total shareholder 
return index as presented below properly reﬂects the true underlying
performance of the group over the ﬁve-year period. This is due to 
the effect of the market ‘boom’ and subsequent decline in internet-
related stocks which impacted upon the company share price. This
was still evident at 31 December 2000, being the base point of the 
ﬁve-year index.
Total shareholder return
31 December 2000 – 31 December 2005
£
120
100
80
60
40
20
0
01 02 03 04 05 32 Arena Leisure Plc Annual Report 2005
Remuneration report continued
Service contracts
The Remuneration Committee has adopted the following policies concerning contracts and service periods which will be applied to any future
appointment to the board:
• The notice period required by the company to terminate contracts is 12 months for executive directors.
• If the company terminates without notice the individual is entitled to a payment in lieu of notice of up to 12 months’ pay .
• In the event of termination for reasons of misconduct, no payment in lieu of notice is payable.
• Executive directors will be employed under normal contracts of employment, but are required to give the company 
12 months’ notice of their intention to leave.
• Non-executive directors are required to give three months’ notice under the terms of their service contracts.
Details of each director’s contract are shown below .
• The notice period required by the company to terminate contracts is three months for non-executive directors.
Director Date of contract Notice period
R D Withers 1 April 2002 3 months
M J Elliott 27 September 2005 1 year
R I Renton 9 April 2001 1 year
H R Mould 1 November 2005 3 months
A H Parker Bowles 8 September 1999 3 months
Directors’ remuneration
The following disclosures on directors’ remuneration have been audited, as required by Part 3 of Schedule 7A of the Companies Act 1985.
The emoluments of the individual directors were as follows:
Y ear ended 31 December 2005 Y ear ended 31 December 2004
Pension Pension
T otal Contributions T otal Contributions
Salary/fee Bonus Beneﬁts 2005 2005 2004 2004
£000 £000 £000 £000 £000 £000 £000
R D Withers 63 – – 63 – 62 –
M J Elliott (appointed 1 October 2005) 62 31 3 96 5 – –
I R Penrose (resigned 30 September 2005) 165 102 13 280 10 365 14
R I Renton 125 71 12 208 11 18 1
H R Mould (appointed 1 November 2005) 5 – – 5 – – –
M J Barnes (resigned 30 October 2005) 22 – – 22 – 25 –
A H Parker Bowles 27 – – 27 – 25 –
I C Hogg (resigned 24 November 2004) ––––– 205 13
G T Parr (resigned 24 November 2004) ––––– 29 –
469 204 28 701 26 729 28 Arena Leisure Plc Annual Report 2005 33
The directors’ holdings of options over ordinary shares are as follows:
At 31 December At 31 December Date from which
2005 2004 Exercise price exercisable Expiry date
M J Elliott 1,000,000 – 40.75p 3 October 2008 2 October 2015
R I Renton 250,000 250,000 105.00p 25 May 2004 24 May 2011
All the options above are held under the discretionary Share Option Scheme, with the exception of 73,619 held by M J Elliott and 28,571 held 
by R I Renton which are under the Share Option Plan.
The share option performance criteria for these options are noted below:
Date of grant Options Performance criteria
M J Elliott 3 October 2005 1,000,000 Exercisable if the market price of shares at the 
end of any dealing day after the date of grant 
is 25% or more greater than the option price 
of 40.75p, i.e. greater than 50.93p.
R I Renton 25 May 2001 125,000 Exercisable if the mean closing mid-price of 
shares is at least 139.75p over a continuous 
period of three months.
62,500 Exercisable if the mean closing mid-price of 
shares is at least 159.5p over a continuous 
period of three months.
62,500 Exercisable if the mean closing mid-price of 
shares is at least 181.5p over a continuous 
period of three months.
250,000
On 3 October 2005, M J Elliott was granted options over 1,000,000 shares in the company . The market price of the shares at 
31 December 2005 was 41.0 pence. High and low prices were 47.25 pence and 36.25 pence respectively over the period.
On behalf of the board
H R Mould
Chairman, Remuneration Committee
28 February 2006 34 Arena Leisure Plc Annual Report 2005
Consolidated income statement and consolidated statement 
of changes in shareholders’ equity
for the year ended 31 December 2005
2005 2004
Note £000 £000
Turnover 3 40,747 37,229
Cost of sales (26,235) (24,898)
Gross proﬁt 14,512 12,331
Proﬁt on sale of investments 834 –
Administrative costs (8,619) (7,157)
Proﬁt from operations 4 6,727 5,174
Share of post tax results of joint venture 17 (1,529) 617
Share of post tax results of associate 17 17 (40)
Write down of investment in associate 17 (315) –
Proﬁt before interest and taxation 4,900 5,751
Finance costs 8 (761) (1,035)
Finance income 8 350 192
Net ﬁnance costs (411) (843)
Proﬁt before taxation 4,489 4,908
Taxation 9 – 195
Proﬁt on ordinary activities after taxation 4,489 5,103
Proﬁt from discontinued operations 10 – 482
Proﬁt for the period attributable to equity
shareholders of the parent 4,489 5,585
Earnings per share: 11
Pence Pence
Continuing operations
Basic earnings per share 1.24 1.41
Diluted earnings per share 1.23 1.40
Continuing and discontinued operations
Basic earnings per share 1.24 1.54
Diluted earnings per share 1.23 1.53
Consolidated statement of changes in shareholders’ equity
2005 2004
£000 £000
Total recognised income and expense 4,489 5,585
Share-based payment expense 5 –
Issue of new ordinary shares for cash 71 –
Dividends paid (1,988) –
2,577 5,585
Capital and reserves attributable to equity
holders of the company at the beginning of the period 57,196 51,611
Capital and reserves attributable to equity
holders of the company at the end of the period 59,773 57,196
The notes on pages 37 to 56 form part of these ﬁnancial statements. Arena Leisure Plc Annual Report 2005 35
Consolidated balance sheet 
at 31 December 2005
2005 2004
Note £000 £000
Non-current assets
Property , plant and equipment 13 70,615 68,867
Intangible assets 14 5,596 4,878
Investment in joint venture – share of gross assets 3,188 3,795
Investment in joint venture – share of gross liabilities (5,974) (5,052)
17 (2,786) (1,257)
Goodwill in respect of joint venture 17 1,580 1,374
Loans to joint venture 3,284 2,991
2,078 3,108
Investment in associate 17 – 298
Financial assets – available for sale 18 – 345
Total non-current assets 78,289 77,496
Current assets
Inventories 19 19 30
Trade and other receivables 20 4,785 3,904
Cash and cash equivalents 69 27
Total current assets 4,873 3,961
Total assets 83,162 81,457
Current liabilities
Bank overdraft (3,267) (1,517)
Trade and other payables 21 (9,368) (9,454)
Other ﬁnancial liabilities 22 (315) (401)
Corporation tax liability – (5)
Total current liabilities (12,950) (11,377)
Non-current liabilities
Financial liabilities 23 (7,632) (9,972)
Accruals and deferred income (2,807) (2,912)
Total non-current liabilities (10,439) (12,884)
Total liabilities (23,389) (24,261)
Total net assets 59,773 57,196
Capital and reserves attributable to equity 
holders of the company
Share capital 27 18,100 18,075
Share premium 28 46 –
Merger reserve 28 5,417 5,417
Retained earnings 28 36,210 33,704
Total equity 59,773 57,196
The notes on pages 37 to 56 form part of these ﬁnancial statements.
These ﬁnancial statements were approved by the board of directors and authorised for issue on 28 February 2006 and signed on its behalf by:
M J Elliott R D Withers
Chief Executive Chairman 36 Arena Leisure Plc Annual Report 2005
Consolidated cash ﬂow statement 
for the year ended 31 December 2005
2005 2004
Note £000 £000
Operating activities
Proﬁt for the year 4,489 5,585
Adjustments for:
Depreciation 1,847 1,424
Impairment provision – Wolverhampton development re assets under construction 400 –
Share-based payment expense 5 –
Net interest expense 411 843
Share of loss/(income) of joint venture 1,529 (617)
Share of (income)/loss of associate (17) 40
Impairment provision – Trackplay LLC 315 –
(Proﬁt)/loss on sale of property , plant and equipment (69) 23
Proﬁt on sale of SIS shares (834) –
Goodwill released on allocation of shares in ATR to Ascot racecourse – 71
Proﬁt on allocation of shares in ATR to Ascot racecourse – (36)
Taxation provision released (5) (195)
Operating proﬁt before changes in 
working capital and provisions 8,071 7,138
Increase in trade and other receivables (881) (642)
Decrease in inventories 11 25
(Decrease)/increase in trade and other payables (1,014) 490
Cash ﬂows from operating activities 6,187 7,011
Investing activities
Purchases of property , plant and equipment (4,409) (13,537)
Sale of property , plant and equipment 184 82
Proceeds from sale of SIS shares 1,179
Loans to joint venture (174) (2,991)
Investment in Doncaster Racecourse Management Co Ltd (718) –
Investment in joint venture (206) (2,025)
Decrease in restricted bank account – 1,365
Interest received 231 106
(3,913) (17,000)
Financing activities
Issue of ordinary shares 71 –
Proceeds from bank and other borrowings – 8,580
Repayment of loans (1,326) (422)
Repayment of ﬁnance lease creditors (14) –
Interest paid (725) (943)
Dividends paid (1,988) –
(3,982) 7,215
Decrease in cash and cash equivalents 33 (1,708) (2,774)
Net cash and cash equivalents at beginning of year (1,490) 1,284
Net cash and cash equivalents at end of year (3,198) (1,490)
The notes on pages 37 to 56 form part of these ﬁnancial statements. Arena Leisure Plc Annual Report 2005 37
1 Accounting policies
The principal accounting policies adopted in the preparation of the consolidated ﬁnancial statements (‘ﬁnancial statements’) are set out below .
The policies have been consistently applied to all the years presented, unless otherwise stated.
These ﬁnancial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs and IFRIC interpretations)
issued by the International Accounting Standards Board (‘IASB’), as adopted by the EU, and with those parts of the Companies Act 1985 applicable
to companies preparing their accounts under IFRS. This is the ﬁrst time the group has prepared its ﬁnancial statements in accordance with IFRS,
having previously prepared its ﬁnancial statements in accordance with UK accounting standards. Details of how the transition from UK accounting
standards to IFRS has affected the group’s reported ﬁnancial position, ﬁnancial performance and cash ﬂows are given in Note 2.
First-time adoption
In preparing these ﬁnancial statements, the group has elected to apply the following transitional arrangements permitted by IFRS 1 ‘First-time
Adoption of International Financial Reporting Standards’:
• Business combinations effected before 1 January 2004, including those that were accounted for using the merger method of accounting
under UK accounting standards have not been restated.
• The carrying amount of capitalised goodwill at 31 December 2003 that arose on business combinations accounted for using 
the acquisition method under UK GAAP was frozen at this amount and was subject to annual impairment review at 1 January 2004.
• IFRS 2 ‘Share-based payments’ has been adopted from the transition date and is only being applied to equity instruments 
(eg: share options) granted after 7 November 2002 that had not vested by 1 January 2005.
Except as noted above, the following principal accounting policies have been applied consistently in the preparation of these 
ﬁnancial statements:
Revenue
Turnover
Turnover principally relates to income derived directly from the holding of horse race meetings, including industry-related funding from 
the Horserace Betting Levy Board and the non race-day use of the racecourse facilities. The group also derives income from the operation
of a hotel at Wolverhampton Racecourse, two golf courses located at Lingﬁeld Park and Southwell Racecourse and a management contract 
in respect of Doncaster Racecourse.
Income is recognised once a race meeting has been held. In certain circumstances income is taken over the life of the agreement to which 
it relates, such as rental income and golf club members’ subscriptions.
Media rights
On 29 March 2004,attheraces terminated its media rights agreement with The Racecourse Association (‘RCA’) and the 49 racecourses which
were party to the contract, including the six racecourses owned by Arena Leisure Plc. Following termination of this agreement, the group
negotiated a new media rights contract and a new At The Races channel was launched in June 2004. The new media rights agreement enabled
the group to resolve its rebate liability under the original contract and to receive future rights payments based on a percentage share of the
relevant revenues generated by the broadcasts from the group’s racecourses. Income from the new media rights agreement is credited to the
income statement in the period in which it is earned.
At 29 March 2004, the group held within creditors the sum of £3.2m in respect of deferred media rights income received under the original
contract. This income will be released to the income statement on a straight line basis over the initial ﬁve year period of the new contract.
Horserace Betting Levy Board (‘HBLB’) grants
The HBLB provides revenue grants to racecourses to support the holding of race meetings. These revenue grants can be waived by racecourses
and transferred to ‘capital credits’. Such capital credit grants may be claimed by racecourses, but at the HBLB’s discretion, against expenditure 
on approved capital projects. It is the group’s policy that all such grants are taken to income when the race to which they relate is held. As these 
grants are derived from and are dependent upon trading activities, they are taken to the income statement when the related race meeting is held.
Basis of consolidation
Where the company has the power, either directly or indirectly , to govern the ﬁnancial and operating policies of another entity or business so as 
to obtain beneﬁts from its activities, it is classiﬁed as a subsidiary . The consolidated ﬁnancial statements present the results of the company and 
its subsidiaries (‘the group’) as if they formed a single entity . Intercompany transactions and balances between group companies are therefore
eliminated in full.
Business combinations
The consolidated ﬁnancial statements incorporate the results of business combinations using the purchase method of accounting. In the
consolidated balance sheet, the acquiree’s identiﬁable assets, liabilities and contingent liabilities are initially recognised at their fair values 
at the acquisition date. The results of acquired operations are included in the consolidated income statement from the date on which control 
is obtained.
Notes forming part of the ﬁnancial statements
for the year ended 31 December 2005 38 Arena Leisure Plc Annual Report 2005
Notes forming part of the ﬁnancial statements continued
for the year ended 31 December 2005
1 Accounting policies continued
Goodwill
Goodwill represents the excess of the cost of a business combination over the interest in the fair value of identiﬁable assets, liabilities and contingent
liabilities acquired. Cost comprises the fair values of assets given, liabilities assumed and equity instruments issued, plus any direct costs of acquisition.
Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the income statement.
Where the fair value of identiﬁable assets, liabilities and contingent liabilities exceed the fair value of consideration paid, the excess is credited
in full to the income statement.
Impairment of non-ﬁnancial assets
Impairment tests in respect of goodwill are undertaken annually on 31 December. Where it is not possible to estimate the recoverable amount
of an individual asset, the impairment test is carried out on the asset’s cash generating unit, in this case being the racecourse operations. Other
non-ﬁnancial assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying value may not 
be recoverable. Where the carrying value of an asset exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs 
to sell), the asset is written down accordingly .
Impairment charges are included in the administrative expenses line item in the income statement, except to the extent they reverse gains
previously recognised in the statement of recognised income and expense.
Associates and joint ventures
Associate undertakings are entities in which the group holds a long-term minority interest and has the power to inﬂuence (but not control) the
ﬁnancial and operating policy decisions of the entity . Joint ventures are entities in which the group holds a long-term interest and shares control
under a contractual arrangement. Interests in associate and joint venture undertakings are accounted for using the equity method of accounting.
The group’s share of post acquisition proﬁts and losses is recognised in the consolidated income statement. Any premium paid for an interest 
in a jointly controlled entity or associate above the fair value of the group’s share of identiﬁable assets and liabilities is dealt with under the
goodwill policy .
Foreign currency
Transactions entered into by group entities in a currency other than sterling are recorded at the rates ruling when the transactions occur.
The results of the overseas associate are translated at the average rate of exchange during the year, which is a reasonable approximation 
of the rate of the underlying transaction and the balance sheet is translated into sterling at the rate of exchange ruling on the balance sheet date.
Exchange differences which arise from translation of the opening net assets and from translating the income statement at an average rate are
taken to reserves.
Financial assets
The group classiﬁes its ﬁnancial assets into one of the following categories, depending on the purpose for which the asset was acquired.
The group’s accounting policy for each category is as follows:
Loans and receivables: These assets are non derivative ﬁnancial assets with ﬁxed or determinable payments that are not quoted in an active
market. They arise principally through the provision of goods and services to customers (trade debtors). They are carried at cost less any
provision for impairment.
Available for sale: Non derivative ﬁnancial assets not included in the above category are classiﬁed as available-for -sale and comprise the
group’s strategic investments in entities not qualifying as subsidiaries, associates or joint ventures. They are required to be carried at fair value
with changes in fair value recognised directly in equity . Where an estimate of reasonable fair value cannot be reasonably assessed, the group 
is precluded from measuring the investment at fair value and measures the instrument at cost.
Financial liabilities
Other ﬁnancial liabilities include the following items:
• Trade payables and other short-term monetary liabilities, which are recognised at amortised cost; and
• Bank borrowings are recognised at the outstanding amount advanced less issue costs which are accreted to the income statement 
over the life of the borrowing facility . Interest expense on outstanding borrowings is charged to the income statement as incurred.
The group does not hold or issue derivative ﬁnancial instruments for trading purposes or any other purpose.
Retirement beneﬁts: deﬁned contribution schemes
Contributions to the group’s deﬁned contribution pension scheme are charged to the income statement in the year to which they relate. Arena Leisure Plc Annual Report 2005 39
1 Accounting policies continued
Share-based payments
Where share options are awarded to employees, the fair value of the options at the date of grant is charged to the income statement over the vesting
period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance
sheet date so that, ultimately , the cumulative amount recognised over the vesting period is based on the number of options that eventually vest.
Market vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisﬁed, a charge is
made irrespective of whether the market vesting conditions are satisﬁed. The cumulative expense is not adjusted for failure to achieve a market
vesting condition.
Leased assets
Where substantially all of the risks and rewards incidental to ownership of a leased asset have been transferred to the group (a ‘ﬁnance lease’),
the asset is treated as if it had been purchased outright. The amount initially recognised as an asset is the lower of fair value and present value of
the minimum lease payments payable over the term of the lease. The corresponding lease commitment is shown as a liability . Lease payments
are analysed between capital and interest. The interest element is charged to the income statement over the period of the lease and is calculated
so that it represents a constant proportion of the lease liability . The capital element reduces the balance owed to the lessor.
Where substantially all of the risks and rewards incidental to ownership are retained by the lessor (an ‘operating lease’), the total rentals 
payable under the lease are charged to the income statement on a straight line basis over the lease term.
The land and buildings elements of property leases are considered separately for the purposes of lease classiﬁcation.
Where the group enters into leases for land and buildings, the land element and the building elements are split, with generally the land element
being treated as an operating lease and the building element as a ﬁnance lease. However, if lease payments cannot be allocated reliably
between land and buildings, then the entire lease is classiﬁed as a ﬁnance lease.
As a consequence, the lease in respect of Worcester Racecourse has been classiﬁed as a ﬁnance lease and has been capitalised as a ﬁxed asset
with a corresponding ﬁnance lease creditor. Future lease payments will be allocated between capital and interest accordingly .
Deferred taxation
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the balance sheet differs to its tax base,
except for differences arising on:
• the initial recognition of goodwill;
• goodwill for which amortisation is not tax deductible;
• the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects
neither accounting or taxable proﬁt; and
• investments in subsidiaries and jointly controlled entities where the group is able to control the timing of the reversal of the difference 
and it is probable that the difference will not reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those instances where it is probable that taxable proﬁt will be available against which 
the difference can be utilised.
The amount of the asset or liability is determined using tax rates that have been enacted or substantially enacted by the balance sheet date 
and are expected to apply when the deferred tax liabilities/(assets) are settled/(recovered). Deferred tax balances are not discounted.
Dividends
Dividends are recognised when they become legally payable. In the case of interim dividends to equity shareholders, this is when paid by 
the company . In the case of ﬁnal dividends, this is when approved by the shareholders at the Annual General Meeting.
Property, plant and equipment
Items of property , plant and equipment are initially recognised at cost.
Freehold land is not depreciated. Depreciation is provided on all other items of property , plant and equipment to write off the cost or valuation,
less estimated residual values of items, over their expected useful economic lives. Depreciation is provided on a straight line basis at the
following rates:
Freehold buildings 2% per annum
Leasehold land and buildings Evenly over the length of lease
All Weather tracks Surface 5% to 10% per annum
Base 2.5% to 3.3% per annum
Plant and machinery 5% to 33% per annum
Fixtures and ﬁttings 5% to 25% per annum
Motor vehicles 25% per annum
Inventories
Inventories are recognised at the lower of cost and net realisable value. 40 Arena Leisure Plc Annual Report 2005
2 First-time adoption of International Financial Reporting Standards (‘IFRS’)
Reconciliations and explanatory notes on how the transition to IFRS has affected proﬁt and net assets for the group previously reported under 
UK Generally Accepted Accounting Principles (‘UK GAAP’)are given below:
Income statement reconciliation for the group for the year ended 31 December 2004
UK GAAP Adjustments IFRS
Sub-note £000 £000 £000
Turnover viii 36,019 1,210 37,229
Cost of sales viii (23,688) (1,210) (24,898)
Gross proﬁt 12,331 – 12,331
Administrative expenses i (7,466) 309 (7,157)
Proﬁt from operations 4,865 309 5,174
Share of proﬁts of associates (40) – (40)
Share of proﬁts of joint ventures 617 – 617
Goodwill in respect of joint venture ii (47) 47 –
Proﬁt before interest and tax 5,395 356 5,751
Net ﬁnance costs iii (751) (92) (843)
Proﬁt before tax 4,644 264 4,908
Corporation tax credit 195 – 195
Proﬁt after tax 4,839 264 5,103
Proﬁt from discontinued operations 482 – 482
Proﬁt for the period attributable to equity shareholders 5,321 264 5,585
Dividends iv (1,084) 1,084 –
Retained proﬁt for the year 4,237 1,348 5,585
Notes forming part of the ﬁnancial statements continued
for the year ended 31 December 2005 Arena Leisure Plc Annual Report 2005 41
2 First-time adoption of International Financial Reporting Standards (‘IFRS’) continued
Balance sheet reconciliation as at 1 January 2004
UK GAAP Adjustments IFRS
Sub-note £000 £000 £000
Non-current assets
Property , plant and equipment v 55,834 1,025 56,859
Intangible assets 4,878 – 4,878
Investment in joint venture – share of gross assets 5,006 – 5,006
Investment in joint venture – share of gross liabilities (41,464) – (41,464)
(36,458) – (36,458)
Loans to joint venture 33,968 – 33,968
(2,490) – (2,490)
Investment in associate 338 – 338
Financial assets – available for sale 345 – 345
Total non-current assets 58,905 1,025 59,930
Current assets
Inventories 55 – 55
Trade and other receivables 3,176 – 3,176
Blocked bank deposit 1,365 – 1,365
Cash and cash equivalents 1,284 – 1,284
Total current assets 5,880 – 5,880
Total assets 64,785 1,025 65,810
Current liabilities
Trade and other payables (8,964) – (8,964)
Short-term borrowings (422) – (422)
Corporation tax liability (200) – (200)
Total current liabilities (9,586) – (9,586)
Non-current liabilities
Other payables vi – (1,311) (1,311)
Long-term borrowings (390) – (390)
Accruals and deferred income (2,912) – (2,912)
Total non-current liabilities (3,302) (1,311) (4,613)
Total liabilities (12,888) (1,311) (14,199)
Total net assets 51,897 (286) 51,611
Capital and reserves attributable to equity 
holders of the company
Share capital 18,075 – 18,075
Share premium 87,625 – 87,625
Merger reserve 5,417 – 5,417
Revaluation reserve 15 – 15
Retained earnings (59,235) (286) (59,521)
51,897 (286) 51,611 Arena Leisure Plc Annual Report 2005 42 42 Arena Leisure Plc Annual Report 2005
2 First-time adoption of International Financial Reporting Standards (‘IFRS’) continued
Balance sheet reconciliation as at 31 December 2004
UK GAAP Adjustments IFRS
Sub-note £000 £000 £000
Non-current assets
Property , plant and equipment v 67,840 1,027 68,867
Intangible assets vii 4,571 307 4,878
Investment in joint venture – share of gross assets 3,795 – 3,795
Investment in joint venture – share of gross liabilities (5,052) – (5,052)
(1,257) – (1,257)
Goodwill in respect of joint venture ii 1,327 47 1,374
Loans to joint venture 2,991 – 2,991
3,061 47 3,108
Investment in associate 298 – 298
Other investments 345 – 345
Total non-current assets 76,115 1,381 77,496
Current assets
Inventories 30 – 30
Trade and other receivables 3,904 – 3,904
Cash and cash equivalents 27 – 27
Total current assets 3,961 – 3,961
Total assets 80,076 1,381 81,457
Current liabilities
Trade and other payables iv (10,538) 1,084 (9,454)
Short-term borrowings (1,843) – (1,843)
Corporation tax liability (5) – (5)
Total current liabilities (12,386) 1,084 (11,302)
Non-current liabilities
Other payables vi – (1,403) (1,403)
Long-term borrowings (8,644) – (8,644)
Accruals and deferred income (2,912) – (2,912)
Total non-current liabilities (11,556) (1,403) (12,959)
Total liabilities (23,942) (319) (24,261)
Total net assets 56,134 1,062 57,196
Capital and reserves attributable to equity 
holders of the company
Share capital 18,075 – 18,075
Merger reserve 5,417 – 5,417
Retained earnings 32,642 1,062 33,704
56,134 1,062 57,196
Notes forming part of the ﬁnancial statements continued
for the year ended 31 December 2005 Arena Leisure Plc Annual Report 2005 43
2 First-time adoption of International Financial Reporting Standards (‘IFRS’) continued
Adjustments
Explanations of the adjustments made to the UK GAAP income statement and balance sheets are as follows:
Sub-note Explanation
i This adjustment reﬂects the reversal of the goodwill amortisation charge of £307,000 in 2004 in respect 
of the group’s racecourse businesses and the net impact of £2,000 on administrative costs following the 
re-classiﬁcation of the Worcester Racecourse lease as a ﬁnance lease.
ii This adjustment reﬂects the reversal of the goodwill amortisation charge of £47,000 in 2004 in respect of the 
group’s investment in At The Races.
iii This adjustment reﬂects the impact on ﬁnance charges of the re-classiﬁcation of the Worcester Racecourse 
lease as a ﬁnance lease.
iv Previously under UK GAAP proposed dividends were included in the balance sheet as a liability even though formal
declaration had taken place after the balance sheet date, whereas under IFRS if an entity declares a dividend after 
the balance sheet date, the entity must recognise the dividend in the period in which it was declared.
This adjustment reﬂects the removal of the 2004 proposed dividend liability from the balance sheet at 
31 December 2004 to be reﬂected in 2005.
v This adjustment reﬂects the capitalisation of the Worcester Racecourse lease following its re-classiﬁcation 
as a ﬁnance lease.
vi This adjustment represents the ﬁnance lease creditor balance in respect of Worcester Racecourse 
following its re-classiﬁcation from an operating lease.
vii This adjustment reﬂects the reversal of the goodwill amortisation charge of £307,000 in 2004 in respect 
of the group’s racecourse businesses.
viii IAS 1 paragraph 32 requires that income and expenses are not offset unless required or permitted by a standard or
interpretation. Previously under UK GAAP industry funding for integrity fees was shown net of integrity costs incurred.
The adjustment is the grossing up of this revenue and cost.
Cash ﬂow statement for the year ended 31 December 2004
The only changes to the cash ﬂow statement are presentational. The key ones include:
• Presenting a statement showing movements in cash and cash equivalents, rather than just cash. Cash under UK GAAP comprised only
amounts accessible in 24 hours without penalty less overdrafts repayable on demand. The components of cash equivalents are shown 
in Note 33.
• Classifying equity dividends as relating to ﬁnancing activities.
3 Revenue
2005 2004
£000 £000
Sale of services 40,747 37,229
4 Proﬁt from operations
2005 2004
£000 £000
This has been arrived at after charging/(crediting):
Staff costs (see Note 5) 5,964 5,392
Depreciation of property , plant and equipment 1,847 1,424
Audit fees 150 136
Fees paid to the company’s auditors for non-audit services 
provided to the company and UK subsidiaries 179 235
(Proﬁt)/loss on disposal of ﬁxed assets (69) 23
Proﬁt from sale of unlisted investment (834) –
Audit fees include an amount of £54,000 (2004: £68,000) in respect of the company .
In November 2005, the group sold its investment in Satellite Information Systems (Holdings) Ltd (‘SIS’) for £1,179,000 resulting in a proﬁt of £834,000. 44 Arena Leisure Plc Annual Report 2005
Notes forming part of the ﬁnancial statements continued
for the year ended 31 December 2005
5 Staff numbers and costs
The average number of persons employed by the group (including directors and part-time staff but excluding race-day casual staff) during 
the period, analysed by category , was as follows:
2005 2004
Management and administration 81 84
Customer service 160 179
241 263
2005 2004
£000 £000
Staff costs (including directors) comprise:
Wages and salaries 5,333 4,775
Deﬁned contribution pension cost 119 120
Share-based payment expense (see Note 31) 5 –
Employer’s national insurance contributions and similar taxes 507 497
5,964 5,392
The table above includes staff costs of £856,000 (2004: £232,000) in respect of 50 staff employed (2004: 66) and recharged to Doncaster
Metropolitan Borough Council as part of the Doncaster Racecourse management contract which commenced on 14 September 2004.
The company employs casual staff to assist during race-days. The number of casual staff varies between 22 and 180 depending on the race-day .
Casual staff are not included in the staff numbers or costs stated above. The aggregate payroll in respect of casual staff for 2005 was £1,290,000 
(2004: £800,000). This includes casual staff costs of £265,000 (2004: £32,000) for Doncaster Racecourse.
6 Directors’ and key management remuneration
2005 2004
£000 £000
Directors’ remuneration
Directors’ emoluments 701 699
Deﬁned contribution pension cost 26 28
Compensation for loss of ofﬁce – 30
Share-based payment expense (see Note 31) 5 –
732 757
There were three directors in the company’s deﬁned contribution pension scheme (2004: 2) during the year.
Further disclosures relating to the remuneration of each individual director is included in the Remuneration report of which the information 
on pages 32 to 33 has been audited.
Note that directors’ emoluments include amounts attributed to beneﬁts-in-kind on which the directors are assessed for tax purposes.
This may differ to the cost to the group of providing those beneﬁts included in Note 5 and 6.
2005 2004
£000 £000
Key management remuneration (including directors)
Wages and salaries 1,113 1,038
Deﬁned contribution pension cost 47 46
Compensation for loss of ofﬁce – 30
Share-based payment expense (see Note 32) 5 –
1,165 1,114
There are 3 employees (excluding directors) deﬁned as being key management for 2005 (2004: 3). Arena Leisure Plc Annual Report 2005 45
7 Segment information
Racecourse operations Central costs T otal
2005 2004 2005 2004 2005 2004
£000 £000 £000 £000 £000 £000
Revenue 40,747 37,229 – – 40,747 37,229
Proﬁt from:
Operations 8,021 7,295 (2,128) (2,121) 5,893 5,174
Sale of unlisted investment – – 834 – 834 –
Proﬁt from operations 8,021 7,295 (1,294) (2,121) 6,727 5,174
Balance sheet
Segment assets 72,262 70,352 8,822 7,699 81,084 78,051
Unallocated assets:
Investment in joint venture – unallocated 2,078 3,108
Investment in associate – unallocated – 298
Consolidated total assets 83,162 81,457
Segment liabilities (9,942) (14,256) (3,180) (488) (13,122) (14,744)
Unallocated liabilities:
Bank loans and overdrafts (10,267) (9,517)
Consolidated total liabilities (23,389) (24,261)
Net assets 62,320 56,096 5,642 7,211 59,773 57,196
Other:
Capital expenditure 5,211 13,485 21 52 5,232 13,537
Depreciation 1,823 1,401 24 23 1,847 1,424
Share of associate result 17 (40)
Share of joint venture result (1,529) 617
Discontinued operations – 482
All business segments arise in the UK.
8 Finance income and expense
2005 2004
£000 £000
Finance income
Bank interest receivable 231 106
Other interest receivable 119 86
350 192
Finance expense
Bank interest payable (725) (317)
Other interest payable – (626)
Finance lease interest (36) (92)
(761) (1,035) 46 Arena Leisure Plc Annual Report 2005
Notes forming part of the ﬁnancial statements continued
for the year ended 31 December 2005
9 Tax expense
2005 2004
£000 £000
UK Corporation tax
Current tax – (195)
The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the UK applied to proﬁts 
for the year are as follows:
2005 2004
£000 £000
Tax reconciliation
Factors affecting tax for the period:
Proﬁt on ordinary activities before taxation 4,489 4,908
Proﬁt on ordinary activities at standard rate of corporation tax in the UK of 30% 1,347 1,472
Effects of:
Expenses not deductible for tax purposes 100 1,357
Income not assessable to tax (1,006) (2,019)
Short-term temporary differences – (54)
Accelerated capital allowances (563) (20)
Adjustment for joint ventures and associates 548 (187)
Tax losses utilised (426) (549)
Adjustment to prior year tax charge – (195)
Total tax credit for the year – (195)
At the year end, corporation tax losses representing trading and non trading losses of £54,777,000 (2004: £58,309,000) were available 
for utilisation in future years subject to agreement with the HM Customs & Revenue.
10 Discontinued operations
2004
£000
Group turnover 1,293
Operating costs (565)
Gross proﬁt 728
Administrative costs (246)
Proﬁt before interest and taxation 482
Finance costs –
Proﬁt before and after taxation attributable
to equity holders 482
Earnings per share:
Pence
Basic earnings per share 0.13
Diluted earnings per share 0.13
The cash ﬂow statement includes the following amounts relating to discontinued operations:
2004
£000
Operating activities 427
Investing activities 24
Financing activities (3)
448
Discontinued operations relate to the closure of Arena Online Services Ltd which ceased operation in June 2004. Arena Leisure Plc Annual Report 2005 47
11 Earnings per share
2005 2004
£000 £000
Earnings:
Proﬁt for the year – continuing 4,489 5,103
Proﬁt for the year – discontinued –482
Proﬁt for year – continuing and discontinued 4,489 5,585
Adjustments:
Discontinued operation – Arena Online Services Limited – (482)
Impairment provision re Wolverhampton development 400 –
Impairment provision – Trackplay LLC 315 –
Arena share of At The Races exceptional items 862 923
Arena share of At The Races consortium relief (464) (4,884)
Proﬁt from sale of SIS shares (834) –
Adjusted proﬁt for year used in calculation of adjusted earnings per share 4,768 1,142
An adjusted earnings per share ﬁgure is included as, in the opinion of the directors, this gives a more useful indication of underlying performance.
2005 2004
Weighted average number of shares: No.‘m No.‘m
Weighted average number of shares used in the
calculation of basic and adjusted EPS 361.52 361.50
Dilutive potential ordinary shares:
– Employee share options 2.20 2.70
Weighted average number of shares used in the
calculation of diluted EPS 363.72 364.20
Certain employee options have not been included in the calculation of diluted EPS because their exercise is contingent on the satisfaction of
speciﬁc criteria that had not been met at the end of the year. In addition, certain employee options have also been excluded from the calculation 
of diluted EPS as their exercise price is greater than the weighted average share price during the year (i.e. they are out-of-the-money) and
therefore would not be dilutive.
12 Dividends
2005 2004
£000 £000
Final dividend of 0.3 pence (2004: nil) per ordinary share
proposed and paid during the year relating to the previous year’s results 1,084 –
Interim dividend of 0.25 pence (2004: nil) per ordinary share
paid during the year relating to the current year’s results 904 –
Dividends paid in the year 1,988 –
The directors have proposed a ﬁnal dividend of 0.2 pence (2004: 0.3 pence) per share totalling £728,000 (2004: £1,084,000). This dividend has 
not been accrued at the balance sheet date.
Under IFRS, dividends are shown as a change in shareholders’ equity on the basis of cash paid or dividends declared prior to the year end.
Previously , under UK GAAP , the proﬁt and loss charge was calculated on an accruals basis, with the proposed ﬁnal dividend, declared 
post year end, shown as a charge in the year to which it related. 48 Arena Leisure Plc Annual Report 2005
Notes forming part of the ﬁnancial statements continued
for the year ended 31 December 2005
13 Property , plant and equipment
Freehold land,
Assets under Long leasehold land buildings and Plant and Fixtures, ﬁttings 
construction and buildings All W eather tracks machinery and vehicles T otal
Cost: £000 £000 £000 £000 £000 £000
At 1 January 2004 1,326 2,361 53,216 5,100 5,154 67,157
Additions 1,072 2 8,908 2,497 1,058 13,537
Re-classiﬁcation – – – (3) 3 –
Disposals – – – (41) (994) (1,035)
At 31 December 2004 2,398 2,363 62,124 7,553 5,221 79,659
Depreciation
At 1 January 2004 – (109) (3,120) (3,506) (3,563) (10,298)
Charged in the year – (24) (585) (370) (445) (1,424)
Re-classiﬁcation – – – 2 (2) –
Disposals – – – 8 922 930
At 31 December 2004 – (133) (3,705) (3,866) (3,088) (10,792)
Net book value at 31 December 2004 2,398 2,230 58,419 3,687 2,133 68,867
Net book value at 31 December 2003 1,326 2,252 50,096 1,594 1,591 56,859
Freehold land,
Assets under Long leasehold land buildings and Plant and Fixtures, ﬁttings 
construction and buildings All W eather tracks machinery and vehicles T otal
Cost: £000 £000 £000 £000 £000 £000
At 1 January 2005 2,398 2,363 62,124 7,553 5,221 79,659
Additions 1,700 70 1,356 1,270 836 5,232
Impairment provision (400) –––– (400)
Re-negotiation of lease – (1,112) – – – (1,112)
Disposals – (203) (39) (33) (275)
At 31 December 2005 3,698 1,321 63,277 8,784 6,024 83,104
Depreciation
At 1 January 2005 – (133) (3,705) (3,866) (3,088) (10,792)
Charged in the year – (24) (825) (531) (467) (1,847)
Re-negotiation of lease – (10) – – – (10)
Disposals – – 114 15 31 160
At 31 December 2005 – (167) (4,416) (4,382) (3,524) (12,489)
Net book value at 31 December 2005 3,698 1,154 58,861 4,402 2,500 70,615
Net book value at 31 December 2004 2,398 2,230 58,419 3,687 2,133 68,867
Assets under construction consist of expenditure in respect of proposed developments at Wolverhampton, Windsor, Lingﬁeld Park and 
Doncaster racecourses. The expenditure includes a variety of professional fees incurred in the design and planning process for the individual
developments. This will include amongst other things, fees for building and landscape architects, engineers, surveyors, cost consultants,
planning consultants, legal fees and specialist reports.
The board has reviewed the carrying costs in respect of the development of a hotel extension and casino at Wolverhampton Racecourse,
which a Government call in inquiry rejected principally on the grounds of its impact on the openness of the green belt site. As a result, the board
has written down the carrying value of the expenditure on this project by £400,000. An alternative design and location within the racecourse 
site is being developed which aims to address the principal issue for rejection by the Government inspector.
Property , plant and equipment include non-depreciable assets of £40,168,000 (31 December 2004: £38,081,000).
The net carrying amount of property , plant and equipment includes the following amounts in respect of assets held under ﬁnance leases:
2005 2004
£000 £000
Long leasehold land and buildings 1,154 2,230
At 31 December 2005 the gross original cost of all assets with a nil net book value still in use was £1,487,000 (2004: 1,425,000). Arena Leisure Plc Annual Report 2005 49
14 Intangible assets
Racecourse operations
£000
Goodwill
At 1 January 2004 and 2005 4,878
Additions – goodwill re investment in Doncaster Racecourse Management Co Ltd 718
At 31 December 2005 5,596
In December 2005 Arena Leisure Plc and Doncaster Racecourse Management Co Ltd entered into various agreements with Doncaster
Metropolitan Borough Council to re-develop Doncaster Racecourse, which, following completion of the re-development, will lead to the grant 
of a 99-year lease to Doncaster Racecourse Management Co Ltd. The various legal and professional fees associated with the process leading 
to the signing of agreements with Doncaster Metropolitan Borough Council have been capitalised by Arena as an investment in Doncaster
Racecourse Management Co Ltd and, on consolidation, is recognised as goodwill.
15 Goodwill and impairment
A review of the carrying value of goodwill arising from the acquisition of the group’s racecourse operations was undertaken at 
31 December 2005. The board based its review on the anticipated level of proﬁtability and cash ﬂow generated from the group’s racecourse
operations for the coming year. As a result, the board considers that the carrying value of goodwill is well supported and does not consider 
that any impairment provision is necessary .
16 Subsidiaries
The principal subsidiaries of Arena Leisure Plc, in which the company owns 100% of the ordinary share capital (with the exception of Worcester
Racecourse Ltd (81%) and Doncaster Racecourse Management Company Ltd (81%) are as follows:
Name Country of incorporation Principal activity
Windsor Racing Ltd Great Britain Racecourse
Lingﬁeld Park (1991) Ltd Great Britain Racecourse
Dunstall Park Centre Ltd * Great Britain Racecourse/Hotel
Southwell Racecourse Ltd * Great Britain Racecourse
Folkestone Race Course Ltd Great Britain Racecourse
Worcester Racecourse Ltd *** Great Britain Racecourse
Windsor Concessions Ltd Great Britain Racecourse concessions
Doncaster Racecourse Management Co Ltd ** Great Britain Racecourse management
Windsor Racecourse Co Ltd Great Britain Holding company
* Denotes indirect holdings.
** No minority interests have been recognised on the grounds of materiality .
*** Worcester minority interest has not been recognised on the grounds of net liabilities and that the minority investee has no obligation to fund.
17 Joint ventures and associates
Joint venture and associate companies in which the company owns an equity share are as follows:
Equity share Classiﬁcation Country of registration Principal activity
Attheraces Holdings Ltd 47.5% Joint venture Great Britain Racing broadcaster
Trackplay LLC 30% Associate United States Gaming technology 50 Arena Leisure Plc Annual Report 2005
Notes forming part of the ﬁnancial statements continued
for the year ended 31 December 2005
17 Joint ventures and associates continued
The movement in the group’s investment in associate and joint venture operations was as follows:
Associate Joint venture
2005 2004 2005 2004
£000 £000 £000 £000
At 1 January 722 722 1,374 2,260
Additions – – 206 1,445
Disposals – – – (71)
Provisions utilised – – – (2,260)
At 31 December 722 722 1,580 1,374
Provisions:
At 1 January – – – (2,260)
Provisions (created)/utilised (315) – – 2,260
At 31 December (315) – – –
Share of proﬁt/(loss):
At 1 January (424) (384) (1,257) (36,458)
At The Races – group reconstruction 
(capitalisation of shareholder loans) – – – 35,368
Proﬁt/(loss) for the year 17 (40) (1,529) 617
Increase in share of net liabilities in At The Races 
due to acquisition of Channel 4 shares – – – (820)
Reduction in share of net liabilities in At The Races 
due to issue of shares to Ascot racecourse – – – 36
At 31 December (407) (424) (2,786) (1,257)
Net book value at 31 December – 298 (1,206) 117
The group had the following aggregate interests in the At The Races joint venture:
31 December 2005 31 December 2004
£000 £000
Non-current assets 125 143
Current assets 3,062 3,652
Current liabilities (2,675) (1,881)
Non-current liabilities (3,298) (3,171)
Share of net liabilities (2,786) (1,257)
Income 5,156 6,203
Expenses (6,685) (5,586)
(Loss)/proﬁt after tax (1,529) 617
Arena Leisure Plc and BSkyB as part of its shareholders agreement have a commitment to fund At The Races by way of loans up to an amount 
not exceeding £10,000,000 pro rata to shareholding. Arena Leisure is therefore committed to fund up to £5,000,000 of which £3,284,000 has 
been provided by way of loans at 31 December 2005.
At The Races Holdings Ltd and its subsidiaries have commenced proceedings against The Racecourse Association (‘RCA’) and various
racecourses to recover rebates in excess of £50 million in connection with a former media rights contract with attheraces. The rebates are
payable from monies received by the racecourses from prospective media agreements. To date, 29 racecourses have reached agreement 
with At The Races, with the effect that the amount being sought in the form of rebates is around a net £30 million.
Following claims made by Attheraces Holdings Ltd and Attheraces Ltd as detailed above, the RCA and the racecourses have made 
a counterclaim for £210 million against Attheraces Ltd which it is vigorously defending.
At this point the directors of Arena Leisure Plc cannot reliably assess the ﬁnancial impact of the rebate claim and counterclaim and as such 
no contingent asset or liability has been recognised in these accounts. Arena Leisure Plc Annual Report 2005 51
18 Financial assets (non-current)
2005 2004
£000 £000
Available-for -sale investments
– unquoted – 345
In November 2005 the group sold its investment in Satellite Information Systems (Holdings) Ltd (see Note 4).
19 Inventories
2005 2004
£000 £000
Consumable stock 19 30
20 Trade and other receivables
2005 2004
£000 £000
Trade debtors 2,253 1,889
Other debtors 890 926
Prepayments and accrued income 1,642 1,089
4,785 3,904
All amounts shown above are due within one year.
An analysis of the interest rate receivable on ﬁnancial assets and information about fair values is given in Note 25.
21 Trade and other payables – current
2005 2004
£000 £000
Trade creditors (4,011) (2,988)
Sales and social security taxes (290) (293)
Other creditors (509) (594)
Accruals and deferred income (4,558) (5,579)
(9,368) (9,454)
22 Other ﬁnancial liabilities – current
2005 2004
£000 £000
Finance lease creditor (Note 29) (19) (75)
Other loans (296) (326)
(315) (401)
An analysis of the interest rate payable on ﬁnancial liabilities and information about fair values is given in Note 25. 52 Arena Leisure Plc Annual Report 2005
Notes forming part of the ﬁnancial statements continued
for the year ended 31 December 2005
23 Non-current ﬁnancial liabilities
2005 2004
£000 £000
Bank loans (7,000) (8,000)
Finance lease creditor (Note 29) (284) (1,328)
Other loans (348) (644)
(7,632) (9,972)
The bank loans and overdraft are secured by a ﬁxed and ﬂoating charge on the assets and undertakings of the group companies, and a ﬁrst 
legal charge on all the freehold and leasehold properties owned by the group. This security is subject to deeds of priority and permitted 
charges in favour of the Horserace Betting Levy Board in respect of security for interest free loans provided to the group.
24 Financial instruments – risk management
The group is exposed through its operations to one or more of the following ﬁnancial risks:
• Fair value or cash ﬂow interest rate risk
• Liquidity risk
• Credit risk
The policy for each of the above risks is described in more detail below .
Fair value and cash ﬂow interest rate risk
With the exception of interest free borrowing from the Horserace Betting Levy Board, the group’s bank borrowings are in sterling and at ﬂoating
interest rates. In the current economic climate and with the current low level of bank debt, hedging for interest rate risk is not considered
appropriate. However the board constantly monitors the ﬁnancial markets and the group’s future borrowing requirements to ensure that this
policy remains in the group’s interest.
Liquidity risk
Liquidity risk is managed centrally on a group basis. Bank facilities are agreed at appropriate levels having regard to the group’s forecast 
operating cashﬂows and future capital expenditure requirements.
Credit risk
The group has limited exposure to credit risk. A high proportion of the group’s income is derived from the Horserace Betting Levy Board
operated under Government statute; from fees payable by the Bookmakers Afternoon Greyhound Service Ltd (‘BAGS’) for transmission of
pictures of live racing into licensed betting shops across the UK, and from the sale of other media rights to our 47.5% joint venture company 
At The Races. Income derived from much of the group’s race-day activity is paid on the day of the event or is invoiced and paid in advance 
of the event. With the exception of a small number of signiﬁcant centrally negotiated transactions, credit control is managed on a local basis.
25 Financial assets and liabilities – numerical information
Maturity of ﬁnancial liabilities
The carrying amounts of ﬁnancial liabilities, all of which are exposed to cash ﬂow or fair value interest rate risk, are repayable as follows:
2005 2004
£000 £000
In less than one year (9,531) (7,331)
In more than one year but not more than two years (116) (8,296)
In more than two years but not more than three years (116) (116)
In more than three years but not more than four years (116) (116)
In more than four years but not more than ﬁve years (7,000) (116)
In more than ﬁve years – –
(16,879) (15,975)
All ﬁnancial assets mature in less than one year. Arena Leisure Plc Annual Report 2005 53
25 Financial assets and liabilities – numerical information continued
Interest rate risk
The currency and interest proﬁle of the group’s ﬁnancial assets and liabilities are as follows:
Floating rate liabilities Interest free liabilities T otal
2005 2004 2005 2004 2005 2004
£000 £000 £000 £000 £000 £000
Sterling (10,267) (9,517) (6,612) (6,458) (16,879) (15,975)
Floating rate assets Interest free assets T otal
2005 2004 2005 2004 2005 2004
£000 £000 £000 £000 £000 £000
Sterling – – 3,143 3,160 3,143 3,160
The rate at which sterling ﬂoating liabilities are payable is 1% (2004: 1%) above Bank of Scotland base rate or LIBOR.
Fair values
The book value and fair value of ﬁnancial liabilities are as follows:
Book Fair Book Fair
value value value value
2005 2005 2004 2004
£000 £000 £000 £000
Bank loans and overdrafts (10,267) (10,267) (9,517) (9,517)
Other loans (644) (644) (970) (970)
Other (5,968) (5,968) (5,488) (5,488)
(16,879) (16,879) (15,975) (15,975)
Fair values of ﬁnancial liabilities have been determined by discounting cash payments at prevailing market rates of interest having regard 
to the speciﬁc risks attaching to them.
To the extent ﬁnancial assets are not carried at fair value in the consolidated balance sheet, book value approximates to fair value at 
31 December 2004 and 2005.
Borrowing facilities
The group has undrawn committed borrowing facilities available at 31 December 2005 in which all conditions have been met:
Floating rate 2005 Floating rate 2004
£000 £000
Expiry within one year 1,733 3,483
Expiry within one and two years – 2,000
Expiry in more than two years 3,000 –
4,733 5,483
26 Unrecognised deferred tax
At 31 December 2004 Movement in the year At 31 December 2005
£000 £000 £000
Depreciation in excess of capital allowances 1,648 (1,101) 547
Other short-term temporary differences 33 – 33
Tax losses 17,493 (1,060) 16,433
Unrecognised deferred tax assets 19,174 (2,161) 17,013
The group has not provided for the deferred tax asset on losses, accelerated capital allowances and other short-term temporary differences 
as it is prudent to assume that the group will not make sufﬁcient taxable proﬁts in the short-term to absorb these amounts. 54 Arena Leisure Plc Annual Report 2005
Notes forming part of the ﬁnancial statements continued
for the year ended 31 December 2005
27 Share capital
Authorised
2005 2005 2004 2004
Number £000 Number £000
Ordinary shares of 5p each 429,353,724 21,468 429,353,724 21,468
Issued and fully paid
2005 2005 2004 2004
Number £000 Number £000
Ordinary shares of 5p each
At beginning of the year 361,495,535 18,075 361,495,535 18,075
Exercise of employee share options 500,000 25 ––
At end of the year 361,995,535 18,100 361,495,535 18,075
28 Reserves
Share premium account Merger reserve Revaluation reserve Retained earnings
£000 £000 £000 £000
At 1 January 2004 87,625 5,417 15 (59,521)
Proﬁt for the year – – – 5,585
Capital reorganisation (87,625) – (15) 87,640
At 31 December 2004 – 5,417 – 33,704
Share premium account Merger reserve Revaluation reserve Retained earnings
£000 £000 £000 £000
At 1 January 2005 – 5,417 – 33,704
Exercise of employee share options 46 – – –
Proﬁt for the year – – – 4,489
Dividends paid – – – (1,988)
Share-based payment expense – – – 5
At 31 December 2005 46 5,417 – 36,210
The following describes the nature and purpose of each reserve within owners’ equity .
Reserve Description and purpose
Share premium Amount subscribed for share capital in excess of nominal value.
Merger reserve The merger reserve arose due to availability of merger relief in connection with the acquisitions 
of RAM Racing Leisure Ltd (Wolverhampton and Southwell Racecourses) and Royal Windsor Racecourse 
partly paid by a share for share exchange and represents the difference between the fair value 
of the consideration given for the shares issued and the nominal value of those instruments.
Retained earnings Cumulative net gains and losses recognised in the consolidated income statement. Arena Leisure Plc Annual Report 2005 55
29 Leases
Finance leases
Future lease payments are due as follows:
Minimum lease Interest Present 
payments 2005 2005 value 2005
£000 £000 £000
Not later than one year 19 18 1
Later than one year and not later than ﬁve years 76 69 7
Later than ﬁve years 746 451 295
841 538 303
Minimum lease Interest Present 
payments 2004 2004 value 2004
£000 £000 £000
Not later than one year 75 75 –
Later than one year and not later than ﬁve years 400 399 1
Later than ﬁve years 8,925 7,523 1,402
9,400 7,997 1,403
The present value of future lease payments are analysed as:
2005 2004
£000 £000
Current liabilities 19 75
Non-current liabilities 284 1,328
303 1,403
30 Retirement beneﬁts
The group operates a deﬁned contribution pension scheme. Pension costs for the deﬁned contribution scheme in 2005 were £119,000 
(2004: £120,000). The unpaid contributions outstanding at the year end, included in other creditors were £2,000 (2004: £2,000).
31 Share-based payment
The company operates two share option schemes for employees: a HM Customs & Revenue approved share option scheme and an unapproved
discretionary share option scheme. Performance criteria based upon the future market price of the company’s shares are attached to each 
grant of options which must be met prior to exercise. In normal circumstances employees will forfeit rights over share options six months after
leaving the company’s employment although directors have discretionary power to extend this to one year following cessation of employment 
or three and a half years from the date of grant.
2005 2005 2004 2004
W eighted Weighted
average average
exercise exercise
price Number price Number
Outstanding at beginning of the year 50.61 8,451,540 53.95 9,509,040
Granted during the year 40.75 1,000,000 ––
Forfeited during the year 64.17 (2,027,500) 80.60 (1,057,500)
Exercised during the year 14.25 (500,000) ––
Lapsed during the year –– ––
Outstanding at the end of the year 47.84p 6,924,040 50.61p 8,451,540
The exercise price of options outstanding at the end of the year ranged between 13p and 105p (2004: 13p and 105p) and their remaining
weighted average contractual life was 4.6 years (2004: 4.9 years).
Of the total number of options outstanding at the end of the year, 2,206,472 (2004: 2,706,472) had vested and were exercisable at the end 
of the year.
The weighted average share price (at the date of exercise) of options exercised during the year was 42.25p.
The weighted average fair value of each option granted during the year was 10.7p. 56 Arena Leisure Plc Annual Report 2005
Notes forming part of the ﬁnancial statements continued
for the year ended 31 December 2005
31 Share-based payment continued
The following information is relevant in the determination of the fair value of options granted during the year under the equity-settled 
share-based remuneration schemes operated by the group. There were no share options granted during 2004.
2005
£000
Equity-settled
Option pricing model used Black-Scholes
Share price at grant date 40.75p
Exercise price 40.75p
Estimated period to exercise of options 5 years
Expected volatility 21%
Risk-free interest rate 4.5%
The volatility assumption is based on a statistical analysis of daily share prices over a period of 90 days.
2005 2004
£000 £000
The share-based remuneration expense (Note 5) comprises:
Equity-settled schemes 5 –
32 Related party transactions
Details of directors’ and key management remuneration are given in the Remuneration report on pages 31 to 33 and Note 6.
Other related party transactions are as follows:
T ransaction amount Balance owing
Related party T ype of 2005 2004 2005 2004
relationship transaction £000 £000 £000 £000
Joint venture Payments for media rights, contribution to picture 1,110 1,457 268 54
provision and interest receivable on loans.
2004 comparative ﬁgures include payments for the 
provision of technology services from Arena Online.
Joint venture Loans 293 2,991 3,284 2,991
In December 2005, I R Penrose, a former director, exercised options over 500,000 ordinary shares at 14.25 pence which realised a gain 
of £140,000.
The group has not made any provision for bad or doubtful debts in respect of related party debtors nor has any guarantee been given 
or received during 2005 or 2004 regarding related party transactions.
All transactions with the joint venture have been undertaken on a commercial arm’s length basis.
33 Notes supporting cash ﬂow statement
Cash and cash equivalents comprises:
2005 2004
£000 £000
Cash and cash equivalents 69 27
Overdrafts (3,267) (1,517)
Net cash and cash equivalents (3,198) (1,490)
Decrease in cash and cash equivalents (1,708) (2,774)
Cash and cash equivalents at beginning of year (1,490) 1,284
Cash and cash equivalents at end of year (3,198) (1,490) Arena Leisure Plc Annual Report 2005 57
Company balance sheet
2005 2004
(as restated)
Note £000 £000
Fixed assets
Tangible assets 4 59 64
Investments 5 48,192 48,184
48,251 48,248
Current assets
Debtors – due within one year 8 632 880
Debtors – due in more than one year 8 38,384 13,499
39,016 14,379
Cash at bank and in hand 517 –
39,533 14,379
Creditors: amounts falling due within one year 9 (3,639) (5,570)
Net current assets 35,894 8,809
Total assets less current liabilities 84,145 57,057
Creditors: amounts falling due after one year 9 (7,000) (8,000)
Net assets 77,145 49,057
Called up share capital 10 18,100 18,075
Share premium 11 46 –
Merger reserve 11 5,417 5,417
Proﬁt and loss account 11 53,582 25,565
Shareholders’ funds – equity 77,145 49,057
The notes on pages 58 to 60 form part of these ﬁnancial statements. These ﬁnancial statements were approved by the board of directors 
on 28 February 2006 and signed on its behalf by:
M J Elliott R D Withers
Chief Executive Chairman
Company balance sheet – UK GAAP ﬁnancial statements
at 31 December 2005 58 Arena Leisure Plc Annual Report 2005
Notes forming part of the UK GAAP ﬁnancial statements
for the year ended 31 December 2005
1 Accounting policies
The ﬁnancial statements of the company have been prepared under the historical cost convention and are in accordance with applicable accounting
standards. The following principal accounting policies have been applied on a basis consistent with the IFRS ﬁnancial statements and are
explained on pages 37 to 39.
Depreciation
Share-based payments
Dividends
Pension costs
The following accounting policies differ from the IFRS accounting policies: Financial assets and liabilities – all ﬁnancial assets and liabilities 
are accounted for consistently with the IFRS ﬁnancial statements with the exception of investments in subsidiaries which are held at cost less
provisions for impairment; and Deferred tax – deferred tax assets and liabilities arise from timing differences between the recognition of gains 
and losses in the ﬁnancial statements and their recognition in a tax computation. In accordance with FRS19, deferred tax is provided in respect 
of all timing differences that have originated, but not reversed, at the balance sheet date that may give rise to an obligation to pay more or less 
tax in the future. The recognition of deferred tax is limited to the extent that the group anticipates making sufﬁcient taxable proﬁts in the future to 
absorb the reversal of underlying timing differences. Deferred tax is measured on a non-discounted basis.
2 Change of accounting policy
Dividends
Previously where the company declared dividends to holders of equity instruments after the balance sheet date, the company recognised 
those dividends as a liability at the balance sheet date. Now where dividends are declared after the balance sheet date they are not recognised
as a liability as they do not meet the deﬁnition of a present obligation.
The company has adopted FRS21 ‘Events after the balance sheet date’ and as a result changed its accounting policy .
The effect of this accounting policy change on the comparative ﬁgures is that net assets have been increased by £1,084,000 and retained proﬁt 
for the year increased by £1,084,000. Had this accounting policy not changed, at 31 December 2005, current year net assets would have been
£728,000 lower and retained proﬁt for the year would have been £728,000 lower.
3 Result for the period
The company has taken advantage of the exemption allowed under Section 230 of the Companies Act 1985 and has not presented its own proﬁt
and loss account in these ﬁnancial statements.
Proﬁt after tax for the company was £30,005,000 for the period, including intercompany dividends of £28,693,000 (2004: proﬁt of £69,000 as restated).
4 Tangible assets
Fixtures, ﬁttings and vehicles
£000
Cost 
At 1 January 2005 95
Additions 21
Disposals (6)
At 31 December 2005 110
Depreciation
At 1 January 2005 (31)
Charged in the year (24)
Disposals 4
At 31 December 2005 (51)
Net book value at 31 December 2005 59
Net book value at 31 December 2004 64
5 Investments
Associate Unlisted investment Joint venture Subsidiaries T otal
£000 £000 £000 £000 £000
Cost:
At 1 January 2005 722 195 2,025 45,242 48,184
Additions – – 206 719 925
Disposals – (195) – – (195)
At 31 December 2005 722 – 2,231 45,961 48,914
Provisions:
At 1 January 2005 –––––
Impairment provision (722) – – – (722)
At 31 December 2005 (722) – – – (722)
Net book value at 31 December 2005 – – 2,231 45,961 48,192
Net book value at 31 December 2004 722 195 2,025 45,242 48,184
Disclosure in respect of the company’s funding obligation to At The Races is detailed in Note 17 to the IFRS ﬁnancial statements. Arena Leisure Plc Annual Report 2005 59
6 Staff numbers and costs
The average number of persons employed by the company (including directors) during the period was as follows:
2005 2004
Management and administration 20 16
2005 2004
£000 £000
Staff costs (including directors) comprise:
Wages and salaries 1,521 1,395
Deﬁned contribution pension cost 68 62
Employer’s national insurance and similar taxes 188 169
1,777 1,626
7 Subsidiaries
The principal subsidiaries of Arena Leisure Plc are detailed in Note 16 to the IFRS ﬁnancial statements.
8 Debtors
2005 2004
£000 £000
Amounts falling due within one year
Trade debtors 155 1
Other debtors 259 487
Prepayments and accrued income 218 392
632 880
Amounts due after one year
Amounts owed by subsidiary undertakings 35,100 10,508
Loans to joint venture 3,284 2,991
38,384 13,499
9 Creditors
2005 2004
(as restated)
£000 £000
Amounts falling due within one year
Bank overdraft (secured) – (1,139)
Trade creditors (1,986) (597)
Amounts due to subsidiary undertakings (953) (3,111)
Other taxation and social security (120) (60)
Other creditors – (123)
Accruals and deferred income (580) (540)
(3,639) (5,570)
Amounts falling due after one year
Bank loan (secured) (7,000) (8,000)
The bank loan and overdraft is secured by a ﬁxed and ﬂoating charge on the assets and undertakings of the group companies, and a ﬁrst legal
charge on all freehold and leasehold properties owned by the group. This security is subject to deeds of priority and permitted charges in 
favour of the Horserace Betting Levy Board in respect of security for interest free loans provided to the group. 60 Arena Leisure Plc Annual Report 2005
Notes forming part of the UK GAAP ﬁnancial statements continued
for the year ended 31 December 2005
10 Called up share capital
2005 2004
£000 £000
Authorised
429,353,724 ordinary shares of 5p each (31 December 2004: 429,353,724) 21,468 21,468
Allotted, called up and fully paid
361,995,535 ordinary shares of 5p each (31 December 2004: 361,495,535) 18,100 18,075
Total share options in issue at 31 December 2005 were as follows:
Number of ordinary shares Exercise price Period exercisable
(i) Under the Share Option Plan 41,294 14.25p 3 August 2001 – 2 August 2008
230,355 105p 25 May 2004 – 24 May 2011
73,619 40.75p 3 October 2008 – 2 October 2015
345,268
(ii) Under the Discretionary Share Option Scheme 2,165,178 13p 18 June 2000 – 17 June 2007
877,378 62p 25 January 2003 – 24 January 2010
37,690 62p 25 January 2005 – 24 January 2010
2,075,000 62p 25 May 2006 – 24 May 2011
497,145 105p 25 May 2004 – 24 May 2011
926,381 40.75p 3 October 2008 – 2 October 2015
6,578,772
Total 6,924,040
Details of directors’ share options, included above are disclosed in the Remuneration report.
11 Reserves
Share premium account Merger reserve Proﬁt and loss 
account (as restated)
£000 £000 £000
At 1 January 2005 (as previously stated) – 5,417 24,481
Prior year adjustment (Note 2) – – 1,084
At 1 January 2005 (as restated) – 5,417 25,565
Retained proﬁt for the year – – 30,005
Issue of shares 46 – –
Dividends paid – – (1,988)
At 31 December 2005 46 5,417 53,582
12 Reconciliation of movement in shareholders’ funds
2004
(as restated)
£000
Loss for the year (as previously stated) (1,015)
Prior year adjustment (Note 2) 1,084
Proﬁt for the year (as restated) 69
Opening shareholders’ funds 48,988
Closing shareholders’ funds (as restated) 49,057
2005
£000
Proﬁt for the year 30,005
Dividends (Note 12 – IFRS ﬁnancial statements) (1,988)
Issue of shares 71
28,088
Opening shareholders’ funds (as restated) 49,057
Closing shareholders’ funds 77,145
13 Share-based payment
The company operates two share option schemes for employees: a HM Customs & Revenue approved share option scheme and an unapproved
discretionary share option scheme. Details are disclosed in Note 31 to the IFRS ﬁnancial statements.
14 Contingent assets and liabilities
Disclosure in respect of contingent assets and liabilities relating to At The Races is detailed in Note 17 to the IFRS ﬁnancial statements. Arena Leisure Plc Annual Report 2005 61
Independent auditor’ s report 
To the shareholders of Arena Leisure Plc
We have audited the group and parent company ﬁnancial statements
(the ‘ﬁnancial statements’) of Arena Leisure Plc for the year ended 
31 December 2005 which comprise the Group Income Statement,
the Group and Parent Company Balance Sheets, the Group Cash Flow
Statement, the Group Statement of Change in Shareholders’ Equity
and the related notes. These ﬁnancial statements have been prepared
under the accounting policies set out therein. We have also audited 
the information in the Directors’ Remuneration Report that is described
as having been audited.
Respective responsibilities of directors and auditors
The directors’ responsibilities for preparing the Annual Report and 
the group ﬁnancial statements in accordance with applicable law and
International Financial Reporting Standards (‘IFRS’) as adopted by 
the European Union, and for preparing the parent company ﬁnancial
statements and the Directors’ Remuneration Report in accordance
with applicable law and United Kingdom Accounting Standards
(United Kingdom Generally Accepted Accounting Practice) are set 
out in the Statement of Directors’ Responsibilities.
Our responsibility is to audit the ﬁnancial statements and the part 
of the Directors’ Remuneration Report to be audited in accordance
with relevant legal and regulatory requirements and International
Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the ﬁnancial statements
give a true and fair view and whether the ﬁnancial statements and the
part of the Directors’ Remuneration Report to be audited have been
properly prepared in accordance with the Companies Act 1985 and
whether, in addition, the group ﬁnancial statements have been
properly prepared in accordance with Article 4 of the IAS Regulation.
We also report to you if, in our opinion, the Directors’ Report is not
consistent with the ﬁnancial statements, if the company has not kept
proper accounting records, if we have not received all the information
and explanations we require for our audit, or if information speciﬁed
by law regarding directors’ remuneration and other transactions is 
not disclosed.
We review whether the Corporate Governance Statement reﬂects 
the company’s compliance with the nine provisions of the 2003 FRC
Combined Code speciﬁed for our review by the Listing Rules of the
Financial Services Authority , and we report if it does not. We are not
required to consider whether the board’s statements on internal
control cover all risks and controls, or form an opinion on the
effectiveness of the group’s corporate governance procedures 
or its risk and control procedures.
We read other information contained in the Annual Report and consider
whether it is consistent with the audited ﬁnancial statements. The other
information comprises only the Directors’ Report, the unaudited part
of the Directors’ Remuneration Report, the Chairman’s Statement,
the Chief Executive’s review of operations, the Financial review and
the Corporate Governance Statement. We consider the implications
for our report if we become aware of any apparent misstatements 
or material inconsistencies with the ﬁnancial statements. Our
responsibilities do not extend to any other information.
Our report has been prepared pursuant to the requirements of the
Companies Act 1985 and for no other purpose. No person is entitled
to rely on this report unless such a person is a person entitled to rely
upon this report by virtue of and for the purpose of the Companies 
Act 1985 or has been expressly authorised to do so by our prior
written consent. Save as above, we do not accept responsibility 
for this report to any other person or for any other purpose and 
we hereby expressly disclaim any and all such liability .
Basis of audit opinion
We conducted our audit in accordance with International Standards 
on Auditing (UK and Ireland) issued by the Auditing Practices Board.
An audit includes examination, on a test basis, of evidence relevant 
to the amounts and disclosures in the ﬁnancial statements and the 
part of the Directors’ Remuneration Report to be audited. It also
includes an assessment of the signiﬁcant estimates and judgements
made by the directors in the preparation of the ﬁnancial statements,
and of whether the accounting policies are appropriate to the 
group’s and company’s circumstances, consistently applied and
adequately disclosed.
We planned and performed our audit so as to obtain all the information
and explanations which we considered necessary in order to provide
us with sufﬁcient evidence to give reasonable assurance that the
ﬁnancial statements and the part of the Directors’ Remuneration
Report to be audited are free from material misstatement, whether
caused by fraud or other irregularity or error. In forming our opinion
we also evaluated the overall adequacy of the presentation of
information in the ﬁnancial statements and the part of the Directors’
Remuneration Report to be audited.
Opinion
In our opinion:
• the group ﬁnancial statements give a true and fair view , in
accordance with IFRS as adopted by the European Union,
of the state of the group’s affairs as at 31 December 2005 and 
of its proﬁt for the year then ended;
• the group ﬁnancial statements have been properly prepared in
accordance with the Companies Act 1985 and Article 4 of the 
IAS Regulation;
• the parent company ﬁnancial statements give a true and fair 
view , in accordance with United Kingdom Generally Accepted
Accounting Practice, of the state of the parent company’s affairs 
as at 31 December 2005; and 
• the parent company ﬁnancial statements and the part of the
Directors’ Remuneration Report to be audited have been properly
prepared in accordance with the Companies Act 1985.
BDO Stoy Hayward LLP
Chartered Accountants and Registered Auditors
London
28 February 2006 62 Arena Leisure Plc Annual Report 2005
Notice of Meeting
Notice is hereby given that the 42nd annual general meeting of the
company will be held at Royal Windsor Racecourse, Maidenhead
Road, Windsor, Berkshire, SL4 5JJ on Monday 8 May 2006 at 3.30pm
for the following purposes:
Ordinary business
1 To receive the Directors’ report, the accounts for the year ended
31 December 2005 and the auditors’ report on the accounts.
2 To approve the directors’ Remuneration report for the year ended
31 December 2005.
3 To authorise the payment of a ﬁnal dividend for the year ended 
31 December 2005 of 0.2 pence per share.
4 To re-appoint as a director A H Parker Bowles who retires by
rotation pursuant to the company’s Articles of Association and who,
being eligible, offers himself for re-election.
5 To re-appoint as a director M J Elliott who having been appointed
during the year retires and offers himself for election.
6 To re-appoint H R Mould who having been appointed during the
year retires and offers himself for election.
7 To re-appoint BDO Stoy Hayward LLP as auditors of the company
from the conclusion of this meeting until the conclusion of the next
general meeting at which accounts are laid before the company in
accordance with the provisions of the Companies Act 1985, and to
authorise the directors to ﬁx the auditors’ remuneration.
Special business
As special business to consider and, if thought ﬁt, to pass the following
resolutions of which resolution 8 will be proposed as an ordinary
resolution and resolution 9 will be proposed as a special resolution.
Ordinary resolution
8 That the board of directors (the ‘board’) be and is hereby generally
and unconditionally authorised to exercise all powers of the
company to allot relevant securities (within the meaning of 
Section 80 of the Companies Act 1985 (the ‘Act’)) up to an
aggregate nominal amount of £3,259,650 provided that the
authority hereby conferred shall expire 15 months after the
passing of this resolution or on the conclusion of the annual
general meeting of the company held in 2007, whichever ﬁrst
occurs, unless this authority is renewed, varied or revoked before
such expiry by the company in general meeting, save that the
company may at any time before such expiry make an offer or
agreement which would or might require any relevant securities 
to be allotted after such expiry , and the board may allot relevant
securities in pursuance of such offer or agreement as if the
authority hereby conferred had not expired.
Special resolution
9 That, subject to the passing of resolution 8 above, the board be
and is hereby empowered pursuant to Section 95 of the Act to allot
equity securities (within the meaning of Section 94 of the Act) 
for cash, pursuant to the authority conferred by that resolution,
as if Section 89(1) of the Act did not apply to any such allotment,
provided that this power be limited to:
a) the allotment of equity securities in connection with an offer 
by way of rights or any other offer on a pre-emptive basis in
favour of holders of ordinary shares where the equity securities
comprised in that offer are offered to the holders of ordinary
shares on a ﬁxed record date in proportion (as nearly as may
be) to the respective numbers of such shares held by them on
that date, but subject to such exclusions or other arrangements
as the directors may deem necessary or expedient to deal with
any legal or practical problems under the laws of any overseas
territory or the requirements of any regulatory body or any
stock exchange in any territory or in relation to fractional
entitlements; and
b) the allotment (other than pursuant to sub-paragraph (a) above)
of equity securities having, in the case of relevant shares,
a nominal amount, or in the case of other equity securities
giving the right to subscribe for or convert into relevant 
shares having a nominal amount, not exceeding in aggregate
the sum of £910,401 (representing approximately 5% of the
issued share capital of the company at the date of the notice 
of meeting in which this resolution appears) 
provided always that the power conferred by this resolution shall
expire on the earlier of the date falling 15 months following the
passing of this resolution and the date of the annual general
meeting of the company held in 2007, save that the company may
before such expiry make an offer or agreement which would or
might require equity securities to be allotted after such expiry ,
and the board may allot equity securities in pursuance of such offer
or agreement as if the power conferred hereby had not expired.
By order of the board
Robert Mercer FCMA
Company Secretary
28 February 2006
Registered ofﬁce:
1 Hay Hill 
Berkeley Square 
London W1J 6DH Arena Leisure Plc Annual Report 2005 63
Explanatory notes to resolutions 8 and 9
Resolution 8 is proposed as an ordinary resolution to renew the
directors’ authority to allot shares and other relevant securities up to
an aggregate nominal amount of £3,259,650 (which represents 17.9%
of the total issued ordinary share capital of the company at the date of
this notice). The authority will last until next year’s annual general
meeting or 15 months after the passing of the resolution, whichever is
the earlier. This is standard practice for many public companies. The
directors have no present intention of exercising this authority . If shares
are to be allotted under this authority and are to be paid for in cash,
Section 89(1) of the Companies Act 1985 requires that those shares
are offered ﬁrst to existing shareholders in proportion to the number 
of shares that they hold at that time. This is the statutory ‘pre-emption
right of existing shareholders’. There may be circumstances when it is
in the interest of the company for the directors to be able to allot some
of the shares for cash other than in proportion to the holdings of
existing shareholders.
Resolution 9, which is proposed as a special resolution, gives the
directors authority to disapply the statutory pre-emption rights of
existing shareholders. The resolution gives the directors the power 
to allot shares and other equity securities for cash other than in
proportion to the holdings of existing shareholders up to a maximum
nominal value of £910,401, representing approximately 5% of the
company’s issued ordinary share capital at the date of this notice,
which is in accordance with the guidelines issued by institutional
investors. The resolution also gives the directors the power to allot
shares for cash in connection with a rights issue or any other offer 
on a pre-emptive basis in favour of holders of ordinary shares, subject
to the exclusions and arrangements set down in the resolution. This
disapplication of pre-emption rights will last until next year’s annual
general meeting or 15 months after the passing of the resolution,
whichever is earlier.
Notes
A member entitled to attend and vote at this meeting is entitled to
appoint one or more proxies to attend and, on a poll, vote in his stead.
A proxy need not be a member of the company . A form of proxy is
enclosed with this notice for your use in connection with the meeting.
To be effective, the instrument appointing a proxy and the power of
attorney or other authority , if any , under which it is signed (or a notarially
certiﬁed copy of such power or authority) must be lodged with the
company’s registrars not later than 48 hours before the time appointed
for the meeting. The company , pursuant to regulation 41 of the
Uncertiﬁcated Securities Regulations 2001, speciﬁes that only those
shareholders registered in the register of members of the company 
as at 3.30pm on 6 May 2006, or in the event that the meeting is
adjourned, in such register 48 hours before the time of any adjourned
meeting, shall be entitled to attend or vote at the meeting in respect 
of the number of shares registered in their name at the relevant time.
Changes to entries in the register of members after 3.30pm on 6 May
2006 or, in the event that the meeting is adjourned, in such register
less than 48 hours before the time of any adjourned meeting, shall 
be disregarded in determining the rights of any person to attend or
vote at the meeting. Copies of all the directors’ service contracts are
available for inspection at the company’s registered ofﬁce during
normal business hours on business days from the date of this notice
until the close of the meeting and will be available for inspection at 
the place of the meeting for 15 minutes before the meeting and during
the meeting.
CREST members who wish to appoint a proxy or proxies by utilising
the CREST electronic proxy appointment service may do so by
utilising the procedures described in the CREST manual. CREST
personal members or other CREST sponsored members, and those
CREST members who have appointed a voting service provider(s),
should refer to their CREST sponsor or voting service provider(s),
who will be able to take the appropriate action on their behalf. In
order for a proxy appointment made by means of CREST to be valid,
the appropriate CREST message (a ‘CREST Proxy Instruction’) 
must be properly authenticated in accordance with CRESTCo’s
speciﬁcations and must contain the information required for such
instructions, as described in the CREST manual. The message must 
be transmitted so as to be received by the issuer’s agent (ID RA 10) 
by the latest time(s) for receipt of proxy appointments speciﬁed in the
Notice of meeting. For this purpose, the time of receipt will be taken 
to be the time (as determined by the timestamp applied to the
message by the CREST Application Host) from which the issuer’s
agent is able to retrieve the message by enquiry to CREST in the
manner prescribed by CREST .
CREST members and, where applicable, their CREST sponsors or
voting service providers should note that CRESTCo does not make
available special procedures in CREST for any particular messages.
Normal system timings and limitations will therefore apply in relation
to the input of CREST Proxy Instructions. It is the responsibility of the
CREST member concerned to take (or, if the CREST member is a
CREST personal member or sponsored member or has appointed 
a voting service provider(s), to procure that his CREST sponsor or
voting service provider(s) take(s)) such action as shall be necessary
to ensure that a message is transmitted by means of the CREST system
by any particular time. In this connection, CREST members and,
where applicable, their CREST sponsors or voting service providers
are referred, in particular, to those sections of the CREST manual
concerning practical limitations of the CREST systems and timings.
The Company may treat as invalid a CREST Proxy Instruction in the
circumstances set out in Regulation 35 (5) (a) of the Uncertiﬁcated
Securities Regulations 2001. 64 Arena Leisure Plc Annual Report 2005
Five year record
Y ear to Y ear to Y ear to Y ear to Y ear to
31 December 2005 31 December 2004 31 December 2003 31 December 2002 31 December 2001
IFRS IFRS UK GAAP UK GAAP UK GAAP
£000 £000 £000 £000 £000
Turnover* 40,747 37,229 29,094 25,106 22,954
Operating proﬁt/(loss) before discontinued operations 
and exceptional items* 6,727 5,174 4,698 2,625 (87)
Tangible ﬁxed assets 70,615 68,867 55,834 54,824 54,531
Net assets 59,773 57,196 51,897 94,074 100,861
The principal adjustments that would be made to the UK GAAP results to comply with IFRS relate to the treatment of goodwill, leases,
dividends and share-based payments.
*Excludes Arena online Services Ltd which was discontinued during 2004.
Shareholder information
Analysis of shareholders
Number of shareholders: 6,313 as at 24 February 2006
Shareholders % Shares %
1,000 and under 50.1 0.4
1,001 to 5,000 34.0 1.5
5,001 to 10,000 6.9 0.9
10,001 to 100,000 7.1 3.7
Over 100,000 1.9 93.5
Held by
Banks 0.1 8.1
Nominee companies 7.5 34.6
Other corporate bodies 1.2 50.4
Individuals 91.2 6.9 Principal bankers
Bank of Scotland
New Uberior House
11 Earl Grey Street
Edinburgh EH3 9BN
Stockbroker
Numis Securities Ltd
Cheapside House
138 Cheapside
London EC2V 6LH
Financial advisors
Investec Bank (UK) Limited
2 Gresham Street
London EC2V 7QP
Deutsche Bank
Winchester House
1 Great Winchester Street
London EC2N 2DB
Registrar and transfer office
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Company information
Head and registered office
1 Hay Hill
Berkeley Square
London W1J 6DH
Telephone +44(0) 20 7495 2277
Facsimile +44(0) 20 7491 7174
contact@arenaleisureplc.com
www .arenaleisureplc.com
Company secretary
Robert Mercer FCMA
Registered number
857819
Auditors
BDO Stoy Hayward LLP
8 Baker Street
London W1U 3LL
Solicitors
Freshfields Bruckhaus Deringer
65 Fleet Street
London EC4Y 1HS
Kirkpatrick & Lockhart Nicholson Graham LLP
110 Cannon Street
London EC4N 6AR
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Arena Leisure at a glance
Arena Leisure Plc stages 25% of all horseracing in the UK. Our portfolio of
racecourse assets provides a solid base for the future development of the
group. Continued focus on improving our fixture list, increasing attendance
and expanding non-racing facilities will enable us to develop venues which
operate for 365 days a year.
Horseracing media/broadcast
At The Races
UK, Irish and international horse
racing on Sky , ntl, ntl Ireland,
Telewest and Chorus. Average
monthly reach over 1.2 million
Income streams:
• Advertising, sponsorship 
and teletext
• International distribution
• Interactive betting and gaming
• Live Web streaming and 
video archive
• Casino and poker
• Distribution to UK 
commercial premises
Doncaster
101 Acres (leasehold)
29 Race meetings (2005)
3% Share of UK horserace 
betting turnover
2% Of UK race meetings
224,000 Attendance (2005)
Other information
• Closed, undergoing major 
re-development
• Home of the St Leger, the world’s
oldest classic horse race
• Flat turf and National 
Hunt racing
• Exhibition centre
Wolverhampton
105 Acres
97 Race meetings (2006)
4% Share of UK horserace 
betting turnover
7% Of UK race meetings
76,000 Attendance (2005)
Other information
• The UK’s busiest racecourse
• Only floodlit All Weather track
• Only racecourse in the UK 
with an onsite hotel
Worcester
100 Acres (leasehold)
21 Race meetings (2006)
1% Share of UK horserace 
betting turnover
1% Of UK race meetings
48,000 Attendance (2005)
Other information
• Summer jumps track
• Popular family racecourse
Royal Windsor
167 Acres
27 Race meetings (2006)
2% Share of UK horserace 
betting turnover
2% Of UK race meetings
135,000 Attendance (2005)
Other information
• The ‘jewel in the crown’
• Affluent residential, London 
and tourist market
• Popular summer Monday 
evenings fixtures
Lingfield Park
450 Acres
90 Race meetings (2006)
6% Share of UK horserace 
betting turnover
6% Of UK race meetings
168,000 Attendance (2005)
Other information
• All Weather and turf track
• Championship golf course
• Sports and leisure club
• Second busiest racecourse 
in the UK
Folkestone
203 Acres
23 Race meetings (2006)
2% Share of UK horserace 
betting turnover
2% Of UK race meetings
37,000 Attendance (2005)
Other information
• Five minutes from the 
Channel Tunnel
• Railway station and 
immediate motorway access
• Kent’s only racecourse
Southwell
145 Acres
75 Race meetings (2006)
5% Share of UK horserace 
betting turnover
6% Of UK race meetings
70,000 Attendance (2005)
Other information
• All Weather and turf track
• Golf course
• Third busiest racecourse 
in the UK Arena Leisure Plc Annual Report 2005
Annual Report 2005
Arena Leisure Plc
1 Hay Hill
Berkeley Square
London W1J 6DH
Telephone +44(0) 20 7495 2277
Facsimile +44(0) 20 7491 7174
www .arenaleisureplc.com