NEC Group profits head in the right direction as Arena business sets new records

The NEC Group has seen full year profits rise, supported by a record-breaking performance from its Arenas operation.

The group, which comprises the National Exhibition Centre, International Convention Centre, National Indoor Arena and the LG Arena, and is owner of catering business Amadeus and national ticketing agency The Ticket Factory, made an operating profit of £15.5m in the year to March 31, 2013. Over the same period it welcomed almost four million visitors to its home venues at over 750 events.
 
The group’s exhibition business, based at The NEC, was responsible for a profit of £31.3m, up £3.8m (13.8%) on the previous year.  The improvement was as a consequence of both new exhibition business and increases in revenues from existing exhibitions as they grew in size.
 
The Arenas and Ticket Factory business delivered an operating profit of £5.6m, up £1.9m (51%) on the previous year. Concert numbers grew in a strong market for live music, which had a positive effect on the numbers of tickets sold by The Ticket Factory. Additionally, the Arenas’ result benefitted from further development of non-ticket revenues such as sponsorship.
 
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 £0.5m (2.9%) increase in revenue to £19.2m, although operating profit fell by £0.4m (9.5%) due to higher energy and Uniform Business Rates costs. The business also bore the cost of positioning the venue to take advantage of improving levels of market confidence and future activity.
 
There was a material increase in the deficit reported in other business areas of £6.1m, which was largely attributable to losses incurred by Amadeus on the Olympic Park North catering contract.
 
John Hornby, The NEC Group’s Chief Operating Officer, said: “The exhibition business delivered solid growth from both existing and new shows and is well-positioned to grow further as market conditions in the UK improve.
 
“As we had anticipated, the Arenas business bounced-back very well from a difficult previous financial year.  The music programme was particularly strong, with acts such as One Direction, The Killers, Jay Z, Madonna, Muse and Justin Bieber playing our arenas, and The Ticket Factory benefitted from more concerts by selling over 100,000 additional tickets for LG Arena and NIA shows than it did in the previous financial year.
 
“Although revenue levels in the convention business were only marginally up, the level of bookings for future years has shown significant signs of improvement, and we are more confident about the prospects for that business than we have been since the start of the economic downturn in the UK.”
 
He said the Olympic result for Amadeus was a significant financial disappointment.  However, the result was a one-off and did not affect the ability of the business to generate profit on a sustained basis.

Group Chief Executive, Paul Thandi, added: “With the exception of the Olympic result, I was pleased by the financial performance of the group’s businesses, and how they are being developed.  All parts of the group are well-placed to take advantage of improving economic and market conditions in the UK, which we are starting to witness.”