NEC Group strategy drives significant financial growth
The NEC Group (“the group”), the Birmingham-based operator of five of the UK’s leading live events venues, has filed its second set of financial results since being acquired by LDC on 1 May 2015.
The group – which also owns caterer Amadeus and national ticketing agency The Ticket Factory – reported revenue of £157.7m for the year to 31 March 2017, up £23.9m (17.9%) on the previous year. Reported EBITDA for the trading businesses (including valuation gains on investment properties of £2.6m) was £50.4m, up £18.6m (58%) on the underlying position for the previous year.
This earnings growth reflects the initial benefits from the strategic focus introduced as part of a transformation agenda which has an emphasis on improving the utilisation and range of uses of the NEC campus and city centre venues and further developing ancillary services. Of particular note were several new exhibitions, increased levels of non-exhibition activities held at the NEC and the first full year of rentals from Resorts World Birmingham, operated by Genting.
New exhibitions hosted for the first time included Automechanika, Destination Star Trek and the UK Games Expo. These supplement the programme of well-established exhibitions including Spring Fair, Crufts and the BBC Good Food Show and more recently introduced formats such as Insomnia, the UK’s biggest gaming festival.
The group’s two arenas welcomed over 1.4 million visitors during the year. International music acts hosted included Adele, Justin Bieber, Drake and Black Sabbath and the arenas also welcomed back Horse of the Year Show, BBC Sports Personality of the Year, Strictly Come Dancing and Cirque du Soleil.
The development of new formats, including the launch of B1 at Arena Birmingham, further benefit the business. This new event layout, which is based on and caters for market demand, features both seated and standing options, providing the intimacy of a smaller venue with all the facilities, capabilities and expertise of a world-class arena.
The group continued its programme of capital investment. Capital expenditure of £17.2m was incurred during the financial year, up £0.6m on the previous year, with a focus on projects to enhance the customer experience and drive trading performance. This programme included major enhancements to hospitality facilities at the Genting Arena and further significant refurbishments of in-hall catering facilities at the NEC.
NEC Group CEO Paul Thandi commented:
“This has been an exceptional year, building on the strong maiden results the group posted 12 months ago.
“As part of our transformation agenda, we are implementing an exciting and focussed strategy which starts with a deep understanding of the needs of our customers and visitors. That understanding is in large part obtained from the insight we draw from data. We invest our resources to address those needs and improve the experience of our customers and visitors, and we can see the benefit of that approach in the significant levels of new business we have secured.
“We are not content to stand still. We will continue to deliver against our proven strategy, whilst broadening our business through a focused leisure strategy to give our visitors more compelling reasons to visit. This includes two visitor attractions to be delivered by Merlin Entertainments at our NEC and city centre sites in the next 12 months and new long-stay content such as Dinosaurs in the Wild, which we hosted at NEC this summer.
“We are progressing other planned developments on our NEC site within the context of our wider campus Masterplan, and we will continue to extend our footprint through winning third-party venue management contracts and by securing new external opportunities for Amadeus.
“We are continuing to invest in our venues to improve the visitor experience, with a particular focus on digital technology. That investment will supplement our already exceptional capabilities to draw insight through the analysis of customer data.
“We are proud to be a central part of the West Midlands’ visitor economy, and look forward to our growth in scope and activity enhancing further the regional economy and its national and international profile.
“We are at an early stage of our strategic development. The initiatives we have recently implemented and those planned, allied with the profile of contracted forward bookings across the group, provide us with confidence that our businesses will continue to grow strongly.”