Scottish Event Campus Limited - Corporate Review 2016 2017
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Scottish Event Campus Limited Corporate Review 2016 – 2017
Contents Chairman’s Welcome
Chief Executive’s Review
4
6
Venue Sales
Exhibitions 8
Conferences 10
Live Entertainment 12
Commercial 14
Financial Review 16
2 Corporate Review 2016 - 17 3
Chairman’s 2016/17 has been another
very successful year for the
to its origins, maintaining a
connection to the excellent The development of two hotels
Welcome Scottish Event Campus Limited
(hereafter SEC, or the Group).
reputation the venue has
built up in each of the market
on the campus is likely to begin
in the final quarter of 2017. The
sectors in which we operate – hotels will add approximately
Of course, our success is Conferences, Exhibitions and 400 bedrooms to the campus
measured not only in financial Live Entertainment. when complete. The hotels will
Key financial and other performance indicators during the year were as follows: terms but also by the economic be an invaluable addition and will
2017 2016 impact of the campus. In the Over the period, trading profits support our growing Conference
year 2016/17, as a result of the continued to be reinvested to and Exhibition sectors as well as
Turnover £28.8m £29.4m business conducted by SEC, ensure the existing facilities meet our Live Entertainment offering
EBITDA ¹ £3.4m £4.3m the net additional expenditure the needs of our customers in an and will help us to continue to
Net cash inflow from operating activities £7.8m (£5.5m) in Glasgow was estimated at increasingly competitive market. generate economic benefits for
Capital Expenditure excluding projects £1.6m 1.8m £414m, in Scotland £272m and in During the year investment in the Glasgow, Scotland and the rest of
Economic Impact (estimated) £414m £411m the UK, £166m which amounts to backstage artist and promoter the UK.
Number of Visitors 1.9m 1.8m expenditure of over £1m per day areas took place along with the
Pollstar Arena Global Ranking 8th 3rd in the Glasgow area. enhancement of hospitality areas The success during the year was
Number of Exhibitions held 45 42 and handrails added in The SSE down to the efforts of the SEC
Number of International Conferences held 12 16 During the year, the business Hydro. Upgraded digital signage team which has made us such
changed its name to Scottish was installed in the SEC Centre a popular destination for event
¹ EBITDA is defined as operating profit from recurring operations before depreciation of assets and release of grants.
Event Campus Limited from and The SEC Armadillo and new organisers, with a reputation for
Scottish Exhibition Centre websites for SEC and The SSE providing a professional friendly
Limited. The new name Hydro were launched. service with a ‘can do’ attitude.
acknowledges that the venue
has developed over a period of In line with this, and to capitalise In November 2016 Rough Guides
more than 30 years – with The on the success that Glasgow and declared Glasgow to be the
Armadillo and The SSE Hydro Scotland have had in the events world’s friendliest city – this
being added to the site over industry over recent years, a is epitomised by the SEC. My
time. In addition, the company feasibility study was prepared thanks go to the Board, our staff
recognises that over this to establish viable options for and the key partners forming the
period, Live Entertainment has upgrading and expanding the wider team for their energy and
grown to be a significant part campus, principally to facilitate commitment during the year.
of the business which is not further growth in the Conference
represented by its former name. and Exhibition sectors. The
ambitious plans are supported Will Whitehorn
As a brand, The Scottish Event by a robust business plan and Chairman
Campus better describes the an economic impact study.
site, is more representative of The focus now will be to secure
what we do and reflects a vision funding support for a project
for the future. It is important which would be of significant
to add that the new name benefit to the Glasgow and
still retains a clear reference Scottish economies.
4 Corporate Review 2016 – 17 5
Chief Executive’s There was a net cash inflow from
operating activities of £7.8m
activities including sponsorship
and hospitality. Commercial
Review for the year. Whilst the business
is inherently cash generative,
turnover for the year increased
by 6%. We continued to add to
there can be variations from year our sponsorships during the year
to year as a result of cash held and renewed some agreements
on behalf of concert promoters. on longer term deals. Our
Significant cash fluctuations can Hydro Club hospitality offering
arise from inflow at the time of is nearing capacity and our
the ticket sales and outflow at Executive Suites are currently all
the performance date. under contract.
The results include the impact QD Events, our event
from the disposal of one of the management subsidiary, has
hotel sites on the campus. A continued to provide a solid
Our underlying business trends gain on sale of £2m is included in contribution to Group results
continue to be very positive. the results. The second site was with a robust performance
Turnover for the year (£28.8m) disposed of post year end with delivered by the existing
was in line with last year despite proceeds of £0.6m and will be portfolio of shows including
the expected reduction in included in the following financial The Scottish Caravan Show,
conference business from the year’s results. The Wedding Show and The Irn
record levels of the previous Bru Carnival. During the year
year. A record year for exhibitions QD Events added Insomnia
evidences the growth in this x Resonate – The Festival of but individual approach to recently, SEC was announced
A change to the timing of sector and future conference eSports and Gaming to their learning and development of as the winner of ABPCO’s Best Peter Duthie
recognition of ticketing income business is strong. portfolio with a successful every employee. The People Industry Partnership Award. The Chief Executive
has had a transitional impact launch. Strategy is aligned to the vision SSE Hydro was awarded The
in this year only, leading to a The SSE Hydro continues to be and mission of the business, in Royal Academy of Engineering,
reduced operating profit for one of the world’s top venues An overall vision for the business particular the need to have the Major Project Award, a
the year of £1.1m. Underlying with over 1 million visitors during
– ‘To be the best event campus “Best People”. prestigious award which
business profitability is, the year, returning to number in Europe’ – has been adopted recognises the impact that a
however, also in line with the 2 on the list of the busiest live
with the mission statement SEC continues to be the project has had on society.
previous year. entertainment arenas in the - ‘Best Venues, Best People, recipient of major industry
world in the first quarter of 2017.
Best Events’. The vision and awards having previously been These awards reflect the
The EBITDA of £3.4m was mission drive the strategy for named Large Venue of the increasing standing which SEC,
driven by the strong sector The SSE Hydro not only provides the Group. The implementation Year at The Drum UK Event including The SSE Hydro, now
performances. This is a key a purpose built venue to host of the People Strategy began Awards, the Best Event Space has in the various sectors in
measure for the business our Live Entertainment events, this year, with our Culture and at the Event Magazine Awards, which we operate.
and cash generated has been but also provides an income Values being a key focus. This and Venue of the Year at the
reinvested in the campus. stream from commercial provides a more strategic Exhibition News awards. Most
6 Corporate Review 2016 – 17 7
Exhibitions EXHIBITIONS AT A GLANCE 2016/17 delivered record
turnover for exhibitions and
and outdoor) beautifully
demonstrating our flexibility
the SEC rebrand and continue
the awareness building activity
— 15% growth in revenue a third consecutive year of and operational capabilities as a through content marketing and
— 45 events including 5 new shows growth. This continues to be broader event campus. PR.
through a combination of high
— Over £460k in new business accounting
retention levels and strong new We created a marketing role Moving forwards, we are
for 11% of turnover business wins. dedicated to exhibitions with focussing on our catering
— 97% retention of year on year revenue the dual purpose of raising proposition, customer insight
This year saw the launch of the awareness of the campus and and strategic marketing
— 9% increase in visitor footfall Ignition Festival of Motoring, a supporting organisers to drive support. All of which should help
spectacular event celebrating visitor attendance. Through drive footfall and associated
all elements from the world initiatives such as the affiliate commercial opportunities whilst
of motor sport, interactive marketing scheme, this is delivering the best possible
experiences and a live street already paying dividends and has customer experience.
circuit on the streets of been very well received by both
Glasgow. Not only was Ignition new and existing customers.
a great partnership between
Brand Events, Visit Scotland We agreed a year long strategic
and Glasgow Life, it also utilised partnership with the Association
all areas of the SEC (indoor of Event Organisers to support
8 Corporate Review 2016 – 17 9
Conferences CONFERENCES AT A GLANCE Whilst the conference turnover
decreased by 21% in the year,
This has been reinforced with
the volume and value of business
Scottish Event Campus will
support further growth in this
- 50 association conferences and corporate the previous financial year was secured in the reporting period. important sector which delivers
events (10% reduction on 2015/16) a record year for the sector. During 2017, based on current significant economic benefit to
The lower level of turnover turnover levels, the equivalent Glasgow, Scotland and the UK.
- 44% of events were medical or scientific
was not unexpected and was of 18 months’ worth of future
reflecting Glasgow’s key strengths in line with a typical annual business was secured.
- SEC welcomed 60,226 conference participants performance from the sector.
Given the cyclical nature of The conference sector remains
- 182,587 participant days some national and international highly competitive and new
- Secured a strong pipeline of future business as conferences, a similar pattern entrants into the market will
will be seen through 2017/18 continue to drive up the quality
far as 2022/23 followed by stronger years of facilities both in the UK and
in 2018/19 and 2019/20. The overseas. The AIPC Annual
number of corporate meetings Member Survey published in
rose from 25 to 27, and 12 July 2017 indicates that 72%
international conferences were of participating venues are
held during the year reflecting currently engaged in new build,
our solid reputation as a leading expansion or major renovation.
international conference venue. Our plans for an expanded
10 Corporate Review 2016 – 17 11
Live LIVE ENTERTAINMENT AT A GLANCE Visitor numbers to The SSE
Hydro again exceeded 1 million
A wide range of events
continued to be staged
demand for future events
remains buoyant with 2017/18
- Number 1 ranking in Billboard
Entertainment - Current number 2 position in the Pollstar
and a strong first quarter
returned the venue to number 2
throughout the campus -
musical and stage productions,
shaping up well with a host of
international artists including
in the Pollstar rankings of Global
comedy, including the return Ed Sheeran, Bruno Mars, Celine
Rankings
Arenas in 2017. of the highly anticipated Still Dion and Metallica fuelling
- Major sporting televised events Game for a 15 performance forward ticket sales. We were
- 15 performances of Still Game The venue achieved a number run, world class live music and also delighted to have secured
1 ranking in the Billboard the seventh successful year the acclaimed national theatre
ranking of global arenas which of our pantomime offering production of “War Horse” in the
measures venues with a capacity which was one of the top three Armadillo for 2019.
between 10,000 and 15,000. pantomimes in the UK.
Both organisations measure
paid attendees at concerts and Live Entertainment turnover
events. reduced by 3% during the year
in line with the UK trend. The
During the year The SSE Hydro slight decrease was driven by the
staged televised broadcasts mix of touring productions. Box
of Andy Murray Live, our first Office turnover reduced by 3% in
tennis event, WWE Raw and line with the Live Entertainment
Smackdown Wrestling. turnover reduction. However,
12 Corporate Review 2016 – 17 13Commercial COMMERCIAL AT A GLANCE The Commercial Department
enjoyed a successful year driven
The eleven Executive Suites at
the venue are fully occupied,
With our principal hospitality
offerings approaching capacity,
- Commercial turnover increased by 6% YOY by strong visitor numbers to The providing our clients with an the team are presently
- Significant new Partnerships, in addition to the SSE Hydro and a strong calendar excellent platform to engage investigating opportunities
of events including major acts in entertaining clients and staff to develop new products and
extension of existing agreements
such as Justin Beiber, Andy at a diverse range of world facilities within The SSE Hydro.
- Executive Suites fully occupied Murray Live! and Rod Stewart. class events. The Hydro Club
- Continued growth in the Hydro Club membership membership scheme which
Our Partnership programme offers a range of ticketing
scheme, approaching capacity continues to grow, with new and hospitality benefits to
partnerships with Bacardi and corporate clients and private
Exsel Group enhancing our individuals continues to grow.
existing portfolio headed by The membership will shortly be
our successful naming rights capped, which is a testament
agreement with SSE. We to the value that clients receive
have also been pleased to through the quality of events
extend our agreements with a that The SSE Hydro continues
number of existing partners, to deliver, as well as the quality
demonstrating the strength of of hospitality facilities within the
our partner relationships and the arena and service levels provided
opportunities associated with by the full Hospitality team.
The SSE Hydro.
14 Corporate Review 2016 – 17 15OUR KEY FINANCIAL AND OTHER CONSOLIDATED STATEMENT Year end
PERFORMANCE INDICATORS DURING THE Year end 31 March 2017
OF COMPREHENSIVE INCOME
YEAR WERE AS FOLLOWS: 31 March 2017
2017 2016
Restated
2017 2016 Note £ £
Turnover
£28.8m £29.4m TURNOVER 28,810,542 29,386,018
EBITDA ¹ £3.4m £4.3m OPERATING COSTS (27,696,963) (27,364,893)
Net cash inflow from operating activities £7.8m (£5.5m) OPERATING PROFIT 4 1,113,579 2,021,125
Capital Expenditure excluding projects £1.6m £1.8m Gain on sale of asset 1,989,049 10,800
Interest receivable and similar income 7 30,503 35,033
Economic Impact (estimated) £414m £411m
Interest payable 8 (406,160) (355,721)
Number of Visitors 1.9m 1.8m
Gain/(Loss) on financial liability at fair value 11,237 (190,347)
Pollstar Arena Global Ranking 8th 3rd
PROFIT BEFORE TAXATION 2,738,208 1,520,890
Number of Exhibitions held 45 42
Tax on profit on ordinary activities 9 (194,842) (289,410)
Number of International Conferences Held 12 16
PROFIT FOR THE FINANCIAL YEAR 2,543,366 1,231,480
¹ EBITDA is defined as operating profit from recurring operations before depreciation of assets and release of grants.
OTHER COMPREHENSIVE INCOME FOR THE
- -
FINANCIAL YEAR
TOTAL COMPREHENSIVE INCOME FOR THE
2,543,366 1,231,480
FINANCIAL YEAR
PROFIT ATTRIBUTABLE TO
Owners of the parent Company 2,543,366 1,231,480
2,543,366 1,231,480
TOTAL COMPREHENSIVE INCOME
ATTRIBUTABLE TO
Owners of the parent Company 2,543,366 1,231,480
2,543,366 1,231,480
16 Corporate Review 2016 – 17 17CONSOLIDATED STATEMENT OF As at CONSOLIDATED STATEMENT Year end
FINANCIAL POSITION 31 March 2017 OF CASH FLOWS 31 March 2017
2017 2016 2017 2016
Note £ Restated £ Note £ £
Fixed Assets Net cash flow from operating activities 21 7,765,633 (5,508,799)
Tangible Assets 11 100,761,506 102,412,809 Returns on investments and servicing of finance 22 (375,657) (320,688)
Investments 60,300 - Capital expenditure and financial investment 22 (613,611) (1,801,961)
100,821,806 102,412,809
Current Assets CASH (OUTFLOW)/INFLOW BEFORE
6,776,365 (7,631,448)
FINANCING
Debtors: amounts falling due within one year 12 8,671,546 9,238,626
Bank current accounts 13,707,309 6,930,944
(DECREASE)/INCREASE IN CASH IN THE YEAR 6,776,365 (7,631,448)
22,378,855 16,169,570
Creditors: amounts falling due within one year 13 (31,442,357) (26,722,001)
RECONCILIATION OF NET CASH FLOW TO
MOVEMENT IN NET FUNDS/DEBT
Net current liabilities (9,063,502) (10,552,431)
Total assets less current liabilities 91,758,304 91,860,378 2017 2016
£ £
Creditors: amounts falling due after more than Increase/(Decrease) in cash in the year 6,776,365 (7,631,448)
14 (42,023,935) (43,221,199)
one year
CHANGE IN NET DEBT RESULTING FROM
6,776,365 (7,631,448)
Provisions for liabilities CASHFLOWS
Deferred taxation 17 (848,221) (653,379)
Other provisions 18 (36,645,457) (38,288,475)
MOVEMENT IN NET DEBT IN THE YEAR:
(37,493,678) (38,941,854)
Net funds at 1 April 2016 6,930,944 14,562,392
Net Assets 12,240,691 9,697,325 Movement in net debt resulting from cash flows 6,776,365 (7,631,448)
Capital and reserves NET FUNDS AT 31 MARCH 2017 13,707,309 6,930,944
Called up share capital 19 21,900,000 21,900,000
Capital redemption reserve 20 2,750,000 2,750,000
Profit and loss account 20 (12,409,309) (14,952,675)
Equity attributable to owners of the parent
12,240,691 9,697,325
Company
12,240,691 9,697,325
18 Corporate Review 2016 – 17 19Scottish Event Campus
Glasgow G3 8YW
T: +44(0)141 248 3000
F: +44(0)141 226 3423
www.sec.co.uk
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