NEC Group report rise in profit ahead of sale
The NEC Group has released its results for the financial year to 31 March 2014 showing healthy growth in its turnover and operating profit as it gears up for sale.
Revenue was up 1.7 per cent to £122.8m and operating profit rose 44 per cent to £22.3m, representing underlying growth of 2.3%; totals achieved despite the continued redevelopment of the National Indoor Arena and the absence of a political party conference in the year.
The group’s largest division, The NEC, had a strong year with 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, commented: “Our long-term growth and diversification strategy allied to the gradual recovery of the economy are having a continued positive effect on the NEC Group. The financial result reflects a variety of successful initiatives to improve profitability across our businesses, and together with new business wins this creates a good platform for the years ahead.
“The City Council announced its decision to seek offers for the NEC Group in early March. We are 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% year-on-year and operating profit 2.3%.
However the NEC Arenas and Ticket Factory business profits dropped 31% on the previous year to £3.9m, 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 20 per cent decrease in operating profit to £0.7m, which was more than accounted for by the absence of a political party conference in the year.