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April 16, 2008

Birmingham sees benefit of NEC's £12m rise in profit

Midlands-based NEC Group, which runs five major UK events and exhibition venues, made an operating profit of £44.6 million in the year to 31 March 2007 – over £12 million more than in the previous year.

According to the group, this increase, during the second year of the its turnaround plan, was due mainly to a number of significant exhibitions over this period, including the quadrennial printing show IPEX and the biennial machine tool show MACH.

After taking into account interest payments on the historical loans taken out to build the venues, there was a surplus of £12.3 million for Birmingham City Council. This compares with a £1 million deficit for the Council in 2005/06.

Strong performances

As well as 2006/07 being at the high point of the cycle of exhibitions, there were strong performances from the other areas of the group’s business.

Birmingham city-centre facility the ICC achieved record results in 2005/06, increasing revenues by 3% on the previous year.

Operating profits for the group’s two music and sport arenas (The NEC Arena and The NIA) and Box Office were also up by more than 9% on the previous year. This was put down to “the exceptional programme of activity delivered in the year”.

Significant events hosted by The NEC Group’s venues in 2006/07 included Scissor Sisters, Take That, George Michael, BBC Sports Personality of The Year Awards, Horse of the Year Show, European Indoor Athletics, Grand Designs Live, Crufts, The BSAVA 50th Congress, Marks and Spencers’ AGM and Spring Fair, Birmingham.

Continued investment
The NEC Group has continued with its investment programme spending £12.6 million to improve The NEC, bringing the total expenditure to £23.8 million to date, in what will eventually be £40 million.

Key areas of the investment programme during the year included transforming a number of in-hall catering facilities and the upgrading of car parks.

Commenting on the results, John Hornby, The NEC Group’s chief operating officer, said: “We are now starting to see the benefits of the significant investment in the venues, not only through customer and visitor feedback but also in our financial results.

“The upcoming year will be a busy one. Not only are we managing the next phase of our £40 million investment programme at The NEC site, but our plans are gathering pace to ensure all of the venues can respond to the increasingly competitive environment and also changing customer needs. In particular, we are working hard to realise our aspirations to deliver a gaming-anchored entertainment complex at the Solihull site as the first phase of creating Destination NEC”.

The West Midlands region also benefits from The NEC Group’s estimated £1.3 billion economic impact, based on expenditure with local hotels, restaurants, florists, stand builders and other businesses. Figures show that for every £1 of group revenue, around another £10 is spent locally, by visitors, exhibitors and organisers.

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