The company, which owns six UK racecourses, said pre-tax losses for the first six months of 2003 came in at �2m ($3.2m), down from �4.5m during the same period last year.

Revenues were sharply higher, climbing 22% on the year to �19.1m thanks in part to strong growth in attendance figures at the company's racecourses.

The bulk of the loss reflected the cost of funding specialist racing television channel attheraces, backed jointly with broadcasters BSkyB and Channel 4.

Arena's share of attheraces' operating loss was �5.6m during the first half of the year, outweighing strong growth in earnings from the rest of Arena's businesses.

Audience growth

But Arena said attheraces, launched last year, had put in a strong performance, with audience figures rising to a record 368,000 during this year's Grand National in April.

ATTHERACES DIGITAL CHANNEL JAN-JUN 03 Total betting turnover �13m Up from �1m in Jan-Jun 02 Losses reduced slightly to �5.6m 659,000 individual viewers during Royal Ascot Up 100,000 on the previous year

It said it expected Channel 4 Racing would later this month start offering attheraces betting for its digital viewers.

Arena added that it had continued to pay down its debts, with total borrowings down to �2.2m at the end of June from �10.5m six months earlier.

Arena said it had started upgrading the facilities at its Lingfield Park, Wolverhampton and Folkestone racecourses ahead of the upcoming season.

The company is due to stage a total of 305 meetings during the season, making it the UK's busiest racecourse operator.

Arena has teamed up with rival Gala to build Britain's first so-called racino - a racecourse with on-site casino - at Wolverhampton.