The NEC Group has delivered a strong set of maiden results under private sector ownership.
The Midlands venues group – which also owns caterer Amadeus and national ticketing agency The Ticket Factory – was acquired from Birmingham City Council by LDC, the private equity arm of Lloyds Banking Group, on 1 May 2015.
The results for the Group to 31 March 2016 include one-off transactions relating to the restructuring required to complete the acquisition from Birmingham City Council. After adjusting for such transactions, revenues for the year to 31 March 2016 increased by £6.4m (5.0%) to £133.8m and EBITDA (earnings before interest, taxation, depreciation and amortisation) increased by £4.2m (15%) to £31.8m.
The significant improvement in EBITDA was achieved despite the effect of the regular cycle of non-annual exhibitions, which depressed EBITDA by around £3.1m in the period compared with the year to 31 March 2015. Underlying EBITDA growth before this effect of the exhibition cycle was £7.3m (26%).
For the first time results include rentals from Resorts World Birmingham, developed and operated by Genting UK, which opened in the final quarter of 2015. Also included for the first time are results from NEC Group’s new conference centre, the Vox, which it operates within Resorts World Birmingham.
The group invested significantly in its venues during the year, with £16.6m of capital expenditure incurred, of which £6.2m related to the completion of the Vox.
The filing of the group’s financial results closely follows its announcement of the appointments of Sir David Arculus, former ExCeL London chair, and Mike Rusbridge, former CEO of Reed Exhibitions, as non-executive directors. They join a board chaired by Peter Phillipson, former chair of Merlin Entertainments.
NEC Group CEO Paul Thandi – who oversaw the change of ownership to LDC – commented: “This is a strong set of maiden financial results for the group under private-sector ownership, and it’s very pleasing to see Resorts World make a financial contribution after considerable planning internally and with Genting UK.
“We continue to invest in our venues to improve our customers’ experience and within Resorts World, our new conference centre, the Vox, has been well received and is trading ahead of our expectations. The positive effect of investment across our portfolio is evident in in our financial results.
“We have a clear strategy and the management team is making great progress in delivering against that strategy, having embraced very positively the change in ownership. We have excellent visibility of future trading due to the profile of forward bookings for events and we will continue to invest in and move all of our businesses forward, maximising the opportunities presented by High Speed Two and the significant investment in and around our Solihull site that will bring.
“I am very confident that we will, in due course, be posting an even more impressive set of financial results for the current year ending 31 March 2017.”