Leeds Arena puts in “incredible” performance for SMG

LEEDS’ First Direct Arena, which opened in 2013, had an “incredible first year” for operators SMG Europe, helping the firm raise revenues whilst other parts of the business put in a poor performance.

The company’s 2014 results showed revenue growth of 3.7% to £45.2m – due to the first full year of operations at the Leeds First Direct Arena, which hosted the pre-tour event for the Tour de France.

Director John Burns said: “This iconic indoor arena has very quickly established itself as an important venue on the touring dates of leading artists.”

The collapse of retailer Phones4U and fewer high profile events however led to a fall in profits at SMG, which also operate the Manchester Arena, and 12 venues across Europe including Manchester’s Bridgewater Hall, the York Barbican and sites in Germany and Poland.

These other areas of the business fell flat, leading ultimately to a dip in pre-tax profits at the company fell 22% from £6.7m to £5.2m.

In January, SMG Europe announced a deal to buy Leeds-based caterer CGC Events. The accounts refer to the business as Value Catering Ltd and reveal that the price paid was £9.48m.

Burns says this deal provides SMG Europe with an “excellent platform” to enhance the food and beverage offering.

Writing in a strategic review, director John Burns said: “The concert market in 2014 saw less touring and playing of live performances, particularly in the second half of the year. The mix of events was also different, which impacted overall margins.”

Burns said the Manchester Arena had been “particularly impacted” by the reduced touring programme if major artists during the year, but remains the second busiest arena in the world after London’s O2.

Opened 20 years ago this year the Manchester Arena is estimated by city council chiefs to have contributed £3bn to the Greater Manchester economy.

Referring to the consequences of the demise of Phones4u, he added: “In 2014 its naming rights partner, Phones4u , went into administration. This has impacted revenues and costs which were previously being amortised relating to securing the naming rights deal, have been written off. The business is actively looking to secure a new naming rights partner.”