14 August 2012
The NEC Group, the Birmingham and Solihull-based operator of four of the country’s leading exhibition and live events venues and owner of catering business Amadeus and national ticketing agency The Ticket Factory, made an operating profit of £16.9m in the year to 31 March 2012. Over the same period it welcomed three and a half million visitors to its venues at over 700 events.
The Group’s exhibition business, based at The NEC in Solihull, individually delivered a profit of £27.5m, down £10.1m (27.0%) on the previous year. However, this decline was anticipated as it was due to the regular pattern of trade exhibitions, whereby not all shows are scheduled to take place every year.
The exhibition business traded ahead of budget expectations as the recovery in the average amount of space taken by trade exhibitions scheduled to take place in the year continued.
The Arenas and Ticket Factory business delivered an operating profit of £3.7m, down £1.5m (29%) on the previous year, reflecting the depressed state of the touring music market in the UK during 2011 and early 2012. However, firm artist bookings and other strong prospects are now much more positive and a strong increase in numbers of music concerts in the current financial year is confidently predicted.
Group Convention Centres (incorporating the trading results of The ICC together with fees earned from the contract to provide management services to The Convention Centre, Dublin), reported a £0.7m (4%) increase in revenue to £17.6m, but operating profit fell marginally (by £0.3m or 7%) due to the impact of higher energy and property costs.
John Hornby, The NEC Group’s chief operating officer, said: “Overall, we delivered a financial result that was marginally ahead of our budget expectations. We are pleased with that result, given the extent of the macro-economic headwinds we and our customers faced during the year.
“The exhibition business delivered a strong result taking into account the regular exhibition pattern which meant that a number of large trade shows were not scheduled to take place in the year. And our conferences division was able to deliver further revenue growth in what remains a fragile and very competitive market.
“Our arenas, like many large UK, Continental Europe and US venues, suffered from a fall in the number of major music artists touring, and this also affected our ticketing business. The consequence was a disappointing result in those areas which fell short of our budget expectations. However, levels of bookings mean that we are once again looking forward to a year in which both of our arenas are very busy with music artists from across a wide range of genres. This will supplement the comedy, family entertainment and sporting programmes which remained strong during the last financial year and show every sign of doing so in the forthcoming year.”
Chief Executive, Paul Thandi, commented: “I am pleased that the efforts of everyone across our businesses resulted in us achieving a financial result for the 2011/12 year that was ahead of our budget expectations. Although our planning anticipated an unhelpful macro-economic environment, the extent of economic uncertainty has been such that our markets have been tougher than we expected. However, our teams have delivered by remaining firmly focused on giving our visitors great experiences of the vast array of live content that our venues continue to host.
“In addition to delivering a strong financial result given the market conditions, we have continued to invest in the future of our business. In particular, we now have a fully-funded project underway to re-develop The NIA into an exciting and iconic contemporary venue in the heart of the City of Birmingham. We are delighted to be partnering Barclaycard in this re-development and elsewhere in our businesses, and look forward to The NIA, A Barclaycard Unwind Experience completing its revitalisation in late 2014.”
The NEC Group has also made significant progress with partners Genting on the project to deliver a ground-breaking Leisure and Entertainment Complex at The NEC site. Genting received outline planning permission from Solihull Metropolitan Borough Council in May 2012, and the Group now looks forward to the remainder of the planning process concluding in early autumn. Genting is on-track to open the complex in early 2015, and this will be a major step in The NEC Group’s plans to create ‘Destination NEC’. The intention of Destination NEC is to create one of Europe’s leading business and leisure destinations, introducing fresh vibrancy across the site that will help ensure that the visitor experience remains engaging and compelling for future generations to come.
Paul Thandi added: “The current financial year is set to be an exciting one for The NEC Group. Our international team is busy across Europe and beyond on a number of projects that we hope will secure us further international management contracts. Our team at Amadeus is working tirelessly to deliver a number of major catering contracts over the summer period, including for the northern part of the Olympic Park during the Olympic and Paralympic games, the Aberdeen Asset Management Scottish Open and the Hampton Court Flower Show.
“And across the Group, we are continuing to invest in our businesses, from ticketing, catering and other services, as well as in the venues themselves where we are hosting a rich programme of world-class content that provides the millions of people who visit us with truly memorable experiences.”