The NEC Group has released results for its financial year to 31 March 2014 showing revenues up 1.7 per cent and operating profit rebounding to £22.3m on underlying growth of 2.3 per cent.
Revenues now stand at £122.8m, a total achieved despite the continued redevelopment of the National Indoor Arena and the absence of a political party conference in the year.
The group’s exhibition division, The NEC, posted operating profit up 9.6 per cent to £34.3m.
The total number of events and visitors at the group’s owned venues remained steady. There were 762 events held during the year, compared to just one less (763) during 2012/13. A slight dip in visitor numbers, 3.8m down from 3.9m a year previously, was reported.
Chief Executive Officer of the NEC Group Paul Thandi said, with the City Council deciding to seek offers for the NEC Group in early March, the business was “well positioned to realise our true strategic potential under private ownership, while improving our contribution to the local and national economies”.
After allowing for the one-off nature of the Olympic catering contract in the previous year, the group’s catering revenues were up 1.7 per cent year-on-year and operating profit 2.3 per cent.
Ticket sales were no laughing matter in the past year. The NEC Arenas and Ticket Factory business profits dropped 31 per cent to £3.9m on the previous year, with fewer tickets sold. The group says this result was affected by constraints on venue availability due to the NIA redevelopment, the number of music concerts being down marginally on a very strong year ended 31 March 2013 and a significant fall in the number of comedy events.
The Ticket Factory did secure a number of new contracts but these added costs as the business invested in improving its technology and building its team to meet the long-term increase in the number of tickets to be issued.
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 (20%) decrease in operating profit, which was more than accounted for by the absence of a political party conference in the year.
The group reported a material reduction in the deficit reported in other business areas of £5.7m, which was largely attributable to losses incurred by catering arm Amadeus on the one-off Olympic Park North catering contract in the previous year.
Key catering contract wins for Amadeus during the year included the Library of Birmingham, Dudley Zoo, Stratford Riverside, Cadbury World and Birmingham’s Symphony Hall and Town Hall. Amadeus also won a new contract for London’s Camden Council.
Without giving detail of any shortlisted bidders, the NEC Group said the sale process “continues on schedule and the aim is to complete a sale towards the end of 2014”.
John Hornby, The NEC Group’s Chief Operating Officer, added that the conference order book was “very strong, with 20 per cent more business written in the financial year compared with the prior year”.
He said he was happy with the overall “strong result” in the business.
“Our financial results and the way we have developed the businesses over the last few years have demonstrated the strength of our growth strategy, constrained only by the amount of capital we have available and the level of risk we can take,” said Thandi. “With more access to capital under private ownership, and the ability to expand quickly into new areas, I am certain that we could realise the greater potential to the benefit not just of our shareholders, but also the regional and national economies alike.”
Do you have news for CN? Email: Paul Colston