NEC Group delivers further impressive growth with earnings now at £60m
NEC Group, operator of five of the UK’s busiest live events venues (“the group”), has filed its financial results for the year to 31 March 2018.
The group – which also owns award-winning caterer Amadeus and national ticketing agency The Ticket Factory – reported revenue of £162.1m, up £4.4m (2.8%) on the previous year. Earnings before interest, depreciation and amortisation (“EBITDA”) were £54.7m, up £4.9m (9.8%).
Earnings have continued to grow since the year end with unaudited EBITDA over the twelve months to 31 May 2018 now standing at £60m, up £12m compared with the year to 31 May 2017.
These results continue the impressive track record of growth since the buyout of the group in 2015.
The earnings growth reflects the group’s strategy to broaden the range of events across the NEC campus and city centre venues following investment in facilities and increasing use of customer data analytics to maximise new event opportunities.
The group also benefitted from increased levels of rent from Resorts World Birmingham, the £150m leisure and entertainment complex at the main NEC site operated by Genting, which enjoyed growth in footfall and customer spend. In addition, revenue has begun to be generated from agreements with Merlin Entertainments for new visitor attractions – The Bear Grylls Adventure at NEC and LEGOLAND Discovery Centre at Arena Birmingham –opening in 2018 and from the planned Moxy Hotel development.
New exhibitions hosted for the first time included This Morning Live, The Fit Show and Collectormania. These added to the programme of well-established exhibitions including Spring Fair, Crufts and the BBC Good Food Show. The group also held its first long-stay event in the exhibition halls, with Dinosaurs in the Wild running over summer 2017.
Attendance at the group’s two arenas grew by 17% against the previous year to over 1.6 million. Acts hosted included Drake, Ed Sheeran, Lady Gaga, Mickey Flanagan and John Bishop, and the arenas also welcomed back Horse of the Year Show, Disney on Ice and Strictly Come Dancing.
The programme of capital investment to drive incremental earnings continued. Capital expenditure of £21.7m was invested, up £4.5m on the previous year. This included the start of a major project to install 185 high-specification digital screens across the NEC campus, hall upgrades at the ICC, continuation of the transformation of catering outlets at NEC and work to prepare the two areas designated for Merlin Entertainments’ visitor attractions.
NEC Group CEO Paul Thandi commented:
“This has been another exceptional year as we see further benefits of what is now a proven strategy. We continue to use our market-leading insight drawn from a wealth of customer data to work with promoters and organisers to grow their shows and launch new content.
“We have a clear plan to expand the leisure offer on our sites, building on the success of Resorts World Birmingham and our fantastic range of consumer exhibitions and arena shows. The opening of two new Merlin Entertainments’ attractions later this year will be important milestones in the delivery of that plan.
Our sporting credentials were reinforced in early 2018, when we hosted a season of international sport at Arena Birmingham, with the IAAF World Indoor Athletics Championships, the Yonex All England Badminton Championships and Gymnastics World Cup. We look forward to showcasing those credentials on a global scale when we host the Commonwealth Games 2022.
“Extensive capital investment into our venues – £48m over the last three financial years – has focused on projects that improve customer experience and deliver earnings growth. This programme will continue into the current financial year with major changes to the NEC site as we continue our roll-out of digital screens and deliver a major facelift to our original exhibition halls.
“We have expanded our footprint further through securing the contract to operate the refurbished Bradford Odeon. We are proud to be working with Bradford Live and other partners to bring this historic building back to life as a unique live events venue.
“The whole team at NEC Group has delivered exceptionally over the three years since the buyout of the business. Our order books for events are at record levels and we will continue to develop existing events and introduce new content and leisure attractions – growing our current audiences and creating new ones.
“We are now exceptionally well positioned for further growth and are targeting earnings growth of 10% year on year over the medium term. In addition, we are finalising the Masterplan for the NEC Campus alongside Birmingham City Council that will further enhance the NEC as a leading leisure destination alongside wider commercial use. The team remain excited at the continuing potential of the NEC campus and business.”