The owner of Brighton racecourse posted a fall in profits a after it was hit by poor weather and a drop in attendances during the football World Cup.

Northern Racing, which also owns Fontwell, near Arundel, said 2006 had been a "significant challenge" with 18 fixtures abandoned in the year to December 31.

The group said it expected to lose a certain number of fixtures each year but 18 was "unusually high", leading to a £700,000 fall in income, compared with £400,000 in 2005. The firm said attendance income also dropped 24 per cent after clashes between principal race meetings and World Cup games.

Pre-tax profits came in at £3.4 million, down from £4.2 million. However, the firm said 2005 figures were boosted by a one-off sale of an investment.

Turnover was up 2.9 per cent to £31.5 million from £30.6 million in 2005.

Northern Racing confirmed takeover talks were continuing after the group received an approach at the end of last year but it said there was no certainty of a sale.

Growth in the company's corporate hospitality business - up 16.2 per cent - and its event and venue hire arm - up 15.9 per cent - helped offset the fall in income from cancelled fixtures and lower attendance.

The racecourses staged a number of events, from banquets and business meetings to music performances last year, including the HSBC Summer Ball at Brighton.

The group also extended its agreement for the supply of racing pictures to British betting shops.

The deal with bookmakers Afternoon Greyhound Service is expected to be worth about £25 million during the extended five-year period from 2008.

The company said trading this year had started well, with race day results in line with expectations, despite a continued loss of fixtures due to wet weather.

Chairman Graham Stow said he was confident about the coming year.

He also announced he would be stepping down from his position at the company's forthcoming annual general meeting. He said this was in accordance with his plans when he accepted the position in 2004. He is to be replaced by Simon Clarke.

Northern Racing also owns racecourses at Bath, Newcastle, Chepstow, Great Yarmouth, Hereford, Sedgefield in Durham and Uttoxeter in Staffordshire.