NEC Group delivers jump in profits and forecasts more to follow

Events and leisure group NEC has increased earnings by 10% as it continues the strong profitable growth of the business.

The group was bought by LDC from Birmingham City Council for £307m in 2015 and there are reports of an £800m-plus sale being considered for next year.

Paul Thandi

Under LDC’s ownership, revenues have increased by more than £30m and earnings, as measured by EBITDA, have jumped by almost the same amount.

NEC Group chief executive Paul Thandi welcomed “another exceptional year” and said his team “remain excited at the continuing potential” of the business.

It generated sales of £162.1m in the year to March 31, which were up 3%, while earnings rose 10% to £54.7m. The group expects to be able to maintain strong future growth in the years ahead and, unusually, also revealed its EBITDA for the 12 months to May had reached £60m.

Thandi said: “We are now exceptionally well positioned for further growth and are targeting earnings growth of 10% year on year over the medium term.

“In addition, we are finalising the masterplan for the NEC Campus alongside Birmingham City Council that will further enhance the NEC as a leading leisure destination alongside wider commercial use.”

A packed crowd at the Genting Arena

NEC Group includes five venues – the National Exhibition Centre (NEC), International Convention Centre (ICC), Genting Arena, Arena Birmingham and the Vox Conference Centre – as well as retail destination Resorts World.

It has continued to develop its offer, with the opening of Legoland Discovery Centre at Arena Birmingham earlier this month.

The Bear Grylls Adventure at NEC, which is also run by Merlin Entertainments, is scheduled to open later this summer with both attractions likely to boost the NEC’s total annual attendance figure above its current level of 7m.

Thandi, who was named TheBusinessDesk.com’s Ambassador of the Year for 2017, said: “We have a clear plan to expand the leisure offer on our sites, building on the success of Resorts World Birmingham and our fantastic range of consumer exhibitions and arena shows.”

Arena Birmingham

The group does face some challenges, however. It has been unable to replace Barclaycard as its naming rights partner at its city centre arena, despite the bank exercising a break clause more than two years ago.

It has also continued to struggle to buck the trend in the casua dining sector, with units remaining empty at Arena Birmingham while it has recently launched its own pop-up bar in place of the closed Strada restaurant at the ICC.

Sporting events have proven to be in better health as the NEC Group, and the city, gears up for the 2022 Commonwealth Games. Arena Birmingham has played host to three major international sporting competitions – the IAAF World Indoor Athletics Championships, the Yonex All England Badminton Championships and Gymnastics World Cup – already this year, with the tae kwon-do world championships and an Amir Khan boxing match to follow.

Outside of the West Midlands, it has secured the contract to operate the refurbished Bradford Odeon in Yorkshire.

IAAF World Indoor Championships at Arena Birmingham

Its services include ticketing agency The Ticket Factory, hospitality brand Amplify, caterering business Amadeus and sponsorship consultancy NEC Connect Group.

“The whole team at NEC Group has delivered exceptionally over the three years since the buyout of the business,” added Thandi.

“Our order books for events are at record levels and we will continue to develop existing events and introduce new content and leisure attractions – growing our current audiences and creating new ones.”