News

The NEC Group

25 Jul 2011

A strong financial performance with major achievements in the transformation of The NEC Group

2010/11 financial headlines:

• Revenue: £123.9m – up 12.8% (from £109.8m in 2009/10)
• Operating profit: £29.4m – up 22.0% (from £24.1m in 2009/10)

The NEC Group, Birmingham and Solihull-based operator of four of the country’s leading exhibition and events venues and owner of catering business Amadeus and national ticketing agency The Ticket Factory, made an operating profit of £29.4m in the year to 31 March 2011. This was £5.3m (22.0%) up on the previous financial year.

After meeting long-term venue upgrade costs and taking interest into account on historic loans to build the venues, there was a deficit in the year of £7.7m. This was down from £12.3m in the previous financial year, despite the cost of investment in upgrading the venues having increased by £2.0m in the year.

The Group’s exhibition business, based at The NEC in Solihull, individually delivered a profit of £37.6m, up 27.0% (£8.0m) on the previous year. This increase reflected an “up” year in the normal four yearly exhibition cycle, but also a gradual recovery in the performance of a number of large trade exhibitions held at The NEC, following on from very difficult trading in the previous financial year.

The Arenas and Ticket Factory business delivered a record operating profit of £5.2m, up 36.8% (£1.4m). The newly refurbished LG Arena traded well and national ticketing agency The Ticket Factory increased ticket sales by 81% to 2.35m. For the first time the number of tickets sold by The Ticket Factory for events at the LG Arena and The NIA was exceeded by sales of tickets for other venues and events.

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 25.0% (£0.9m) increase in operating profit to £4.5m, reflecting a partial recovery in activity levels following the severe downturn in corporate conference business due to recessionary factors in 2009/10.

John Hornby, The NEC Group’s chief operating officer, said: “These results represent a strong recovery from the very difficult trading conditions we had to deal with last financial year. The exhibitions and conferencing businesses have performed well, delivering slow but sure recovery from their results in 2009/10, and we are delighted with the growth levels reported in our arenas and ticketing business. Record level of profitability there underline the benefit of the investment in the LG Arena and also the significant potential we have to grow The Ticket Factory, which is now firmly established as a major ticketing force in the UK.

2011/12 will be a less profitable year for our exhibition business due to the normal exhibition cycle, and markets are still difficult, in particular those involving direct spending on events by consumers. But we have robust strategies and plans in place in all of the businesses to continue to move our financial performance forward.”

Chief Executive, Paul Thandi, added: “I am pleased with these financial results, which are testament to the efforts of everyone across our businesses in markets that remain challenging. Once again, we welcomed almost four million visitors to our venues during the year to an impressive array of events. And I am delighted that we have continued to deliver initiatives that will strengthen the group and its performance for many years to come.

Our team made a major contribution to the successful opening and early operation of The Convention Centre, Dublin. The venue is in my view, together with The ICC, one of the finest in Europe and the expertise and efforts of The NEC Group team, working with our partners in Dublin, have paid real dividends in a strong start to its trading life. Our venue and service management skills are highly regarded internationally and we are involved at the early stages of a number of further projects.

We continue to develop aggressively and successfully our services businesses, Amadeus and The Ticket Factory. The respect the catering industry has for Amadeus was clear for everyone to see when we were awarded the contract to provide catering services at Olympic Park North during the London 2012 Olympic and Paralympic games. There were also other significant contract wins for Amadeus during the year, such as the Hampton Court Palace Flower Show.

The Ticket Factory delivered impressive growth. We were delighted to win the contract to be national ticket agent for promoter 3A Entertainment and we continue to grow our non-music credentials through contracts such as that with the Royal Horticultural Society to provide ticketing services to the Chelsea Flower Show.

Both Amadeus and The Ticket Factory have major potential for growth and we will continue to invest in them.

More recently, there was another major milestone in our journey of transforming the group, in the decision last month by Solihull Metropolitan Borough Council’s Licencing Committee to award our partner, Genting, a Large Casino licence. There is still a lot of hard work for us and Genting to do until the Leisure and Entertainment Complex opens, but we are confident we will jointly deliver what will be an important early step in creating a true destination at The NEC site.”

FOR INTERVIEWS WITH JOHN HORNBY, COO NEC GROUP, PLEASE CALL ANDREA BENN, HEAD OF COMMUNICATIONS 0121 767 3208