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To add to welsh wizard.It seems to me the the EEC was saying just a year ago the the government could not hold shares in large enterprises such as airlines or power companies but suddenly it is OK to hold shares in banks.What a turn around from the free market economy that was supposed to save us all.I guess it depends on whose oxx is being gored.And who the free market is saving.As Groucho Marx would say "Are you going to believe me or your own eyes"?
the new rich will start working for a change instead of stealing money from us all.
The good old capitalist world has a way of putting us all back in our place when we get uppity.The cause of this situation Andyod.
It is this lot, the ruthless possession collector that has no feelings for his fellow man, that needs chastising.
Working for a change would imply a new found consience and that is unfortunately unlikely. It will be some time before deliberation will be sought before unloading funds from grandma’s purse in the name of sales.When the possession of respect and admiration can rise above the misconceived need for material ownership then the correction will be complete.
When a hard days work equals fair renumeration instead of a massive wage increase, several million shares and a bonus to boot.Oh wake up you buffoon, thats not the real world, just a fertile imagination.
Maxilon
It is not all bad news. Those who live within their means, save responsibly, and are competent in their jobs will be fine, though some may have to change employers and all will have to bear part of the burden of bailing out the feckless through higher taxes.
The real crime is that those few in SOME of the banks, and those who thought it "clever" to put their savings in foreign banks for an extra percent or two interest over what the Chelsea or Skipton Building Societies and similar, well run UK financial institutions offer will demand to be bailed out by the responsible majority. And this principle-less, gutless government, led by the man who, single-handedly, is the architect of most of the UK’s economic difficulties by years of socialist spend, borrow and tax policies, is so desperate for votes that is responding to these demands rather than letting people bear the consequences of their decisions. (Not that the chinless wonder who leads the Conservative Party wouldn’t do exactly the same – another opportunistic "Blair" type without principles, though in fairness probably more honest. But there again, who isn’t more honest than Blair?)
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Does the economy at current mean that the will be…
A) More triers
B) More non-triersThe real crime is that those few in SOME of the banks, and those who thought it "clever" to put their savings in foreign banks for an extra percent or two interest over what the Chelsea or Skipton Building Societies and similar, well run UK financial institutions offer will demand to be bailed out by the responsible majority.
George if you are referring to the failure of Landsbanki and Icesave may I respectfully suggest you check the facts.
Icesave is a subsidiary of Landsbanski but operates under a British banking licence, therefore any investments in Icesave would be covered by the same scheme compensation scheme as a wholly owned British based bank – ergo savers are covered up to £50,000 anyway – as in investor in Icesave myself I checked the cover before investing and I ensured I invested well under the limit as it was then. Making an investment in Icesave was from a legal perspective the same as investing in a UK bank. Icesave would have to have lodge a substantial cash deposit with the Bank Of England as part of its being granted a banking licence and that sum should be enough to cover the deposit protection scheme – presumably these are amongst the assets frozen by the Government..
It doesn’t help that Mr Darling, whilst trying to claim back the money from the Icelandic government, is conveniently forgetting to mention Icesave was a British licensed bank, which is slightly disingenuous. Then again why not blame Johnny Foreigner to detract from your own failings? The money Mr Darling seems to be pursuing is the "uninsured" investments i.e. those above the deposit protection limit and those not covered at all by deposit protection.
For what it is worth I don’t believe the government should bail out any monies above what is covered by the existing compensation scheme and certainly no money should be returned to corporate investors, including councils. If investors cannot be bothered to check investment guarantees before investing they deserve to get their fingers burnt.
As for getting the extra percentage point on an investment – what is wrong with that?
Paul, Iceland is strictly liable for the first £16K of compensation. I think when their finance minister told Darling they intended defaulting on that guarantee is when we started to get tough with them.
Paul, Iceland is strictly liable for the first £16K of compensation. I think when their finance minister told Darling they intended defaulting on that guarantee is when we started to get tough with them.
I have seen those reports as well but it does not ring true – unless there has been a significant change in how depositis are held in the last two years – there should be sufficient funding to cover the deposit guarentee scheme without having to go to the Icelandic government.
This says to me either the BoE have been lax in their overview or Icesave have not been up front in their dealings – obviously I wouldn’t want to say which.
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In the case of Landsbanki, the first £16,500 is guaranteed by the Icelandic authorities, with the FSCS covering the excess up to the level set out in the British deposit guarantee scheme (was £18,500, now presumably £33,500).
Should the (European) deposit guarantee directive come into force, the FSCS would cover their ‘share’ within a week, whilst the foreign institution would be required to offer compensation within three months.
Interesting thread!
Pre Credit Crunch when times were good, racecourse goers had issues with
1. The expense of getting to the races
2. Course Entrance Fees
3. Expensive Beer/Food at race courses
4. Poor course facilities
5. {and the list goes on}Yet the racing industry like the [Government, Bankers, Financial Services, and Hedge Funds et al] decided to create its own bubble and feed high on hog by fleecing the punter.
Now Jo Punter is strapped for cash, the racing industry is about to feel the pain of its own credit crunch!
As someone mentioned earlier the construction of Ascot, Kempton and Great Leighs are based on the flawed logic which has been proven to be woeful wrong. The notion that punters will always go racing and spend their hard earned to repay the construction costs and create profits for the owners.
The same flawed logic assumes that owners will always find the cash to purchase expensively breed horses at the sales and that horses can be traded like asset; their intrinsic value is a one way bet.
Having lived through the lows of the 80s, 90’s bookmakers back then did ok as people like a bet whatever their liquidity.
However the Turf accountant shops of today have been extensively modernised. Does anyone think the money to fund this expansion was created out of thin air like our FIAT monetary system?
The racing industry is heavily leveraged, owes debt and is about to feel the pain of repayment!
A quick flick through today’s RP and BBC news highlights that racing will soon be feeling the chilly draft of the forthcoming recession:-
– unemployment up to 1.8 m
– FTSE down 300 odd points in a day to just over 4000
-inflation at 5%
-Irish budget increases taxation on betting
– sale of Tote suspended given poor economic conditions
-Levy down with consequent impact on prize money (may be due to internet betting and other factors)
– disappointing figures at the yearling and other horse sales yesterday
– race sponsors, especially those in finance and construction, pulling out
– racecourse attendances down 8-10% this calendar yearWhile I’m sure the likes of Ballydoyle, Godolphin, the Queen and the Aga Khan will carry on regardless, I’m sure there will be belt tightening further down the food chain.
Doubtless the PR and Marketing types who run racing will have their work cut out!
Google search on "Arena Leisure trading statement October 2008" and you’ll have an interesting read
…and here is that statement in full, lovingly culled from http://www.investegate.co.uk/Article.aspx?id=200810160700119634F;
RNS Number : 9634F
Arena Leisure PLC
16 October 2008
16 October 2008
ARENA LEISURE PLC
INTERIM MANAGEMENT STATEMENT
Arena Leisure Plc (‘Arena’), the UK’s largest operator of horseracing fixtures, today issues its Interim Management Statement for the period from 1 July 2008 to 15 October 2008.
Trading Update
In line with other leisure businesses, and as a result of the current economic conditions, Arena’s results for the period, and the outlook for the full year, are below expected levels. Public attendances, on a like-for-like basis, are down on 2007 levels, although are ahead of those of the UK horse racing industry as a whole. There has also been a reduction in the spend of customers on-course compared to the prior year and, in particular and as referred to in earlier statements, a marked decrease in the sale of private and corporate hospitality packages has exacerbated this impact on profitability.
In the nine months to 30 September 2008, Arena hosted 275 fixtures (2007: 243) with total attendance of 531,000 (2007: 440,000). Doncaster Racecourse, which reopened in August 2007, accounted for this increase, hosting 25 meetings in 2008 (2007: 5) with attendance of 173,000 (2007: 74,000). On a like for like basis, excluding Doncaster, the moderate year on year decrease compares to a period in 2007 when weather disruption was significant and when both Southwell and Worcester Racecourses were closed as a result of flooding. Four successful days racing were delivered at the 2008 St Leger Festival in September with attendance over the four days of 59,000 (2007: 66,000), including the St Leger being run in front of a crowd of 26,000 (2007: 31,000).
In this nine month period, 45,600 (2007: 51,300) private and corporate hospitality packages were sold, of which 14,000 (2007: 14,000) were at the 25 Doncaster Racecourse meetings (2007: 5). The 2008 St Leger festival delivered 10,000 hospitality packages (2007: 13,000), highlighting the decrease in this valuable income stream during 2008. Whilst the drop in corporate demand appears to have stabilised, we have experienced some price resistance with customers down-trading between package levels, most notably at Royal Windsor Racecourse.
Early indications from the first weeks of Wolverhampton Racecourse’s Autumn-Winter series of 44 Friday and Saturday fixtures are that attendance and revenues are down on expected levels. In addition, Worcester Racecourse has again suffered flooding, resulting in the loss of one fixture and the transfer of five fixtures at short notice to Southwell Racecourse.
In light of the current market conditions, Arena has put in place actions to protect profitability. We are ensuring our operating cost base is aligned with the reduced level of attendances and the operating synergies arising from bringing our catering operation in-house are being actively exploited. In particular, a specific plan to materially reduce operating costs at Doncaster Racecourse is in progress.
Arena is also focused on maximising revenue opportunities. A restructured sales organisation has seen the appointment of three new sales managers and the implementation of new procedures to enhance revenue generation. Benefits will continue to be delivered from the recent implementation of ticketing, reservations and sales management systems. Initiatives to increase the proportion of pre-booked ticket sales are focused on promotions through enhanced customer relationship management processes that identify and target customers for this and other promotional activities. Arena racecourses regularly review pricing in light of changing market conditions and, in general, they offer a range of price points to suit all segments of the market.
Arena’s catering business is performing well, with good control over purchasing and menu planning enabling input cost pressures to be managed within our target operating margins. However, as catering performance is ultimately linked to customer demand and overall attendance levels it has been impacted accordingly. We are nevertheless pleased that the level of customer satisfaction has shown dramatic improvement and that Arena remains on course to generate a record level of profit from its catering operations in 2008.
At The Races, in which Arena owns a 45.85% stake, continues to perform in line with expectations.
Property Developments
The Lingfield Park hotel and leisure development remains on budget and on schedule to open in Spring 2010. Plans for the sale of surplus land at Arena racecourses are progressing.
Funding
Despite the challenging trading conditions, debt remains at manageable levels in terms of both interest and cash cover and, in comparison to Arena’s asset base, gearing remains low. Bank facilities total £61.75m, which includes sufficient capacity to finance the Lingfield Park hotel project to completion. Arena has recently hedged a further £10.0m of debt through a 75/25 mix of fixed and capped contracts; for which the effective LIBOR rate is a maximum of 5.27% for the period to 31 December 2012.
Outlook
The Board is of the opinion that trading conditions over the final quarter of the year will remain challenging and that the current disappointing attendance and spending trends are likely to continue. As a result, despite the measures being taken to protect profitability, the Board now expects that Arena’s performance for the full year will be significantly below current market expectations.
Arena continues to build on its strong operating credentials in order to remain well placed for when trading conditions improve and continues to make progress on its development strategy. The Board remains confident of Arena’s long term prospects.
Jeremy
(graysonscolumn)Jeremy Grayson. Son of immigrant. Adoptive father of two. Metadata librarian. Freelance point-to-point / horse racing writer, analyst and commentator wonk. Loves music, buses, cats, the BBC Micro, ale. Advocate of CBT, PACE and therapeutic parenting. Aspergers.
They may call it an "Interim Management Statement" I would call it a profits warning.
Interesting they are focusing on Donny – perhaps if they reduced the admission costs they would get more punters through the door and a greater spend (which is where the profit seems to come from) once inside.
I can still see Worcester being the prime candidate for the chop if circumstances worsen.
I know it isn’t scientific by certainly in the last couple of weeks there seem to be far fewer general public at meetings – although the numbers in hospitality seem to be holding up – this may well be to advance bookings and the next few months will be interesting.
Kempton last night was even quieter than usual, although that one may be down to the football.
It seems to me the the EEC was saying just a year ago the the government could not hold shares in large enterprises such as airlines or power companies but suddenly it is OK to hold shares in banks.What a turn around from the free market economy that was supposed to save us all.
They just make laws up as they go along. The EU should just stick to doing things that they are good at like getting a legal definition of what chocolate is and working out the legal curvature of a cucumber, instead of twatting about with our economy. It would seem that this month’s EU law goes something like, it’s ok for the governement to hold shares or nationalise anything that makes a loss but not anything that makes a profit.
It will be interesting to see if they try and maintain the bloated fixtures list next year.
This crunch won’t bite properly for a few months. With all of those folk soon to be hanging around the streets all day, the bookies must be rubbing their hands and getting their FOBT’s dusted down.
I’ve often thought that the half an hour between races schedule doesn’t do racecourses any favours from a business point of view. Unless you’re the sort of racegoer who spends the whole meeting in the bar, there’s never really time to sit down for a pint or a bite to eat other than before racing starts. I reckon if they increased the time between say the third and fourth races to 45 minutes they’d get a lot more money through the tills in the bars and eateries.
It will be interesting to see if they try and maintain the bloated fixtures list next year.
Do you mean 2009 or 2010? The list for the former has been cast in stone for a couple of months already. I always regard it as a moot point whether the fixture list is actually bloated in any case – barring those thinly-contested AW meetings last winter, the horse population in Britain is easily large enough to sustain such a programme. That the money to sustain so many meetings may be in shorter supply doesn’t alter that fact.
gc
Jeremy Grayson. Son of immigrant. Adoptive father of two. Metadata librarian. Freelance point-to-point / horse racing writer, analyst and commentator wonk. Loves music, buses, cats, the BBC Micro, ale. Advocate of CBT, PACE and therapeutic parenting. Aspergers.
Max , fantastic post , laughed heartily for ages , and yes it must be in line for the Gamble AWARD for the most entertaining post of the year
generally I think we have not yet seen the full impact of the credit crunch , there are a lot of tough times ahead ,which hopefully most folks will get by unscathed
Racing has been bloated by excess charging for years , and with the exception of some outstanding concert events allied with racedays , this year the value for money concept has been missing presumed dead
its simple , Racecources will adapt or go broke , particularily those that offer low grade racing habitually over the winter months , how long before they slip down the Walthamstow route
the brighter slicker operations wont go near that trap and will thrive , and rightly so
cheers
Ricky
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