The rejuvenation of racecourse owner Arena Leisure following the collapse of its Attheraces media deal has been marked by a maiden dividend payment.

Arena, which hosts a quarter of all UK racing fixtures and is still holding out for the Governmental greenlight over a hotel and casino at Wolverhampton racecourse, offered the payout after bouncing back into the black with pretax profits of £200,000 in 2004 and enjoying record prize money levels at its race tracks.

Its revival was underpinned by investment in its six racecourses, including new racing surfaces at Wolverhampton and Southwell and the redevelopment of a grandstand at Lingfield Park.

Alongside new bar and concourse facilities and the planting of 3,000 trees, Arena has installed a £3 million new track at Wolverhampton - the second busiest course in the country - allowing all weather, flood-lit racing.

Wolverhampton City Council-approved the development of the casino complex last year, but it has since been held up by an inquiry at the Office of the Deputy Prime Minister.

The proposal for the track, which technically falls in the greenbelt, involves building a hotel and gaming complex on the car park.

"Even if approval were to come tomorrow the facilities would not open until Christmas next year and with a busy conference centre on site the group is hoping the wait will not be too long," said chief executive Ian Penrose.

The London-based group has concentrated on its racecourses since its specialist TV channel Attheraces, a joint venture with BSkyB and Channel 4, collapsed in January 2004 due to a row over betting revenues. The collapse of the ten-year, £307 million media rights deal, led to losses of £42.2 million in 2003.

The Office of Fair Trading later ruled in an unrelated decision that the collective sale of certain media rights to Attheraces by the 49 racecourses breached competition law.

Mr Penrose yesterday described 2004 as a transformational year for the company as he unveiled a 0.3p dividend payment to shareholders.

He said: "The group continues to accelerate with all our key performance indicators ahead of this time last year."

Turnover rose nine per cent to £37.3 million although this masked faster growth in revenues from its racecourses, which were up 24 per cent to £36 million during the year.

The difference reflected the closure of its software development arm Arena Online Services in June. Arena runs racecourses at Lingfield Park, Wolverhampton, Southwell, Windsor, Worcester and Folkestone.

The profits performance from Arena means that it is in the black for the first time since the 1990s, with underlying profits rising 20 per cent last year after stripping out the loss of income from Attheraces and changes to industry funding.

Shares closed up 2.5p at 43p last night as investors welcomed comments that the group was currently trading ahead of expectations and it was watching for any potential acquisitions.

The group expects to host more than 350 race meetings between January and December - up from 315 a year ago.