Scottish Exhibition Centre Ltd Corporate Review 2013 2014
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Scottish Exhibition
Centre Ltd
2013 – 2014 Corporate Review
Contents Chairman’s Welcome
Chief Executive’s Review
4
6
Venue Sales 9
Exhibitions 10
Conferences 12
Live Entertainment 14
Financial Review 16
2 Corporate Review 2013 - 14 3
Chairman’s September 30th 2013 was an
eagerly awaited day for the
In its first six months of
operation The SSE Hydro
with the significant one off
costs associated with the lead
notable dates will be in addition
to the many concerts and
Welcome business when we opened the
doors to our 13,000 capacity
attracted over 600,000 visitors.
It was the recipient of several
up to The SSE Hydro opening.
The Board believes that the
events which will be staged
in the arena.
arena, The SSE Hydro. Already, prestigious awards and was benefits of the investment in
Scotland’s new home of live ranked 4th in the Pollstar the enlarged campus, greater The SECC‘s role as an economic
entertainment has been Global Arena results for the space availability, commercial driver for Glasgow and Scotland
acknowledged as one of the quarter to March 2014 which contracts and forward business continues to develop. In the
best purpose-built indoor live measures paid attendees at live secured leave the group well year 2013/14, as a result of the
entertainment arenas in the entertainment events across placed to significantly enhance business conducted by Scottish
world and over the current all international venues. This future years results. Exhibition Centre Limited, the
year has been the engine major rise in visitor numbers net additional expenditure
for a transformation in the to our business brings about a In the current year the campus in Glasgow was estimated
company. The completion of significant increase in EBITDA was a key venue for The at £378m, in Scotland £217m
The SSE Hydro has also allowed and consequently profitability Glasgow 2014 Commonwealth and in the UK, £94m. The full
us to increase the number of from our recurring operations in Games, bringing to fruition impact of The SSE Hydro will be
concerts and events staged the current year. over a decade of planning reflected in the current year.
and with the transfer of for the event. As such, the
existing business from Hall 4, “The Board expects the impact forthcoming year’s results will I offer my thanks and those
will provide the opportunity of the opening of The SSE be significantly enhanced due of the Board to our staff
to grow the exhibition and Hydro to result in a significantly to the contribution from the and partners across the
conference sectors further. increased level of profitability Games and the success of business and to our principal
and indeed is likely to be The SSE Hydro. These profits shareholder, Glasgow City
the highest recorded in the will be fundamental to the Council, for their support
company’s history in the business and will be reinvested throughout the year.
year ahead.” in the campus ensuring that the
rest of our venues are match
It is important to note that fit to meet the future needs
this year’s results witness the of the conference and
months running up to and exhibition markets.
succeeding the opening, when
the existing business suffered There is also a lot to look
considerable disruption to forward to. Other prestigious
its ability to take bookings. events being held in The SSE
However, whilst constructing Hydro in the forthcoming year
our new home of live include The 2014 MTV Europe
entertainment, contribution Music Awards ceremony,
from the other areas of the The Ryder Cup Gala Concert Will Whitehorn
campus and business sectors and The 2014 BBC Sports Chairman
has been maintained, even Personality of the Year. These
4 Corporate Review 2013 – 14 5
Chief Executive’s Through the transformation
of the site positive business
continued to provide a solid
contribution to group results
Review performance has been
maintained. A profit of £157k
with a strong performance
delivered by the existing
was achieved for the year portfolio of shows including
despite the one-off costs The Scottish Caravan Show,
associated with the opening The Wedding Show and The Irn
of The SSE Hydro. Our key Bru Carnival. MCT Congress (a
financial indicators based on trade show) was added to the
recurring activities show a 16% show portfolio during the year.
increase in turnover to £23.3m
and EBITDA up 46%. Live entertainment
turnover increased by 27%
Conference turnover decreased predominantly due to the
by 14% due to the cyclical nature opening of The SSE Hydro.
of conferences hosted within the The addition of the Hydro
venue. However, our corporate also broadened the range
meetings doubled with more of events held in the venue
short term space being available which included Top Gear Live,
after the successful opening of Nitro Circus and many leading
The SSE Hydro. artists including Beyoncé,
Michael Buble, Andrea Bocelli,
The exhibitions market, in Calvin Harris and Fleetwood
line with the rest of the UK, Mac along with the opening
remained difficult during the performance by Rod Stewart.
year. Notwithstanding market Our Box Office turnover
conditions, the increased space increased by 82% largely Limited. These partnerships take up of our executive
availability within the exhibition due to the demand for live significantly exceed business suites and premium seating Peter Duthie
halls provides opportunity for entertainment hosted in the plan projections for the project are above expectations. Chief Executive
growth. In particular, a strategy new venue. Demand for future and equally importantly have
As we reflect on the financial is being developed to target events continues to be strong allowed us to align with some In support of our business
year and the challenging the trade exhibition sector with 2014/15 shaping up to be truly iconic brands. partners and as part of our
timescale to deliver and and securing the All Energy a record year. major focus on customer
open The SSE Hydro, we can exhibition and conference, a Our sponsorship deals together experience we have invested
now be proud to be in the prestigious industry event, Further sponsorship deals were with premium seating offers in digital technology. Digital
enviable position of having represents the calibre of event signed in the year in addition have also introduced new signage, high density Wi Fi,
a purpose-built exhibition we are now able to attract. to deals concluded in previous revenue streams previously arenamation, arena external
centre, conference centre years which included the unavailable. The SSE Hydro lighting and projection all
and a stunning new QD Events, our events naming rights deal for The SSE has greatly enhanced our add to the unique SSE Hydro
arena all on one site. management subsidiary, has Hydro with SSE Energy Supply hospitality offerings and the experience.
6 Corporate Review 2013 – 14 7
Chief Executive’s
Review, cont...
saw the relocation of the Our ticketing business is being expect over 1 million attendees
heliport and the opening of a reshaped following a wider per annum at SSE Hydro
new multi storey car park on review of ticketing technology, live events and the forward
site. “Clydebuilt” - a new bar systems and procedures business for the next financial
and restaurant opened in the focused on the long term year will see this target being
SECC Concourse at the same viability and profitability of significantly exceeded.
time as The SSE Hydro. This the business. Ticketmaster
new addition has been very is our new official ticketing The success during the year
successful in its own right provider. We will continue to was based on an extraordinary
servicing visitors to all events own and operate a venue box level of commitment from our
across the campus. A coffee office and contact centre but staff. The period leading up to
kiosk, the Deli and Bakery this exciting new partnership and through the opening of
was also created together will see an improved service The SSE Hydro, placed huge
with a new back-of-house for all customers including the demands on our team and it
production kitchen. All of these provision of an official resale is to their great credit that the
new facilities were built in solution which ensures that venue opened on time and
conjunction with our catering fans are able to buy and operates so effectively.
partner, Levy Restaurants. sell unwanted tickets safely
and securely. The challenge ahead is to
Future developments under grow our business, to grow
consideration will be the In the current year, The SSE our people and to play our
provision of a hotel on the Hydro and SECC venues were part in Glasgow’s developing
campus and the development proud to be a fundamental international reputation as an
of the west end residential site. component of and centrepiece ‘event’ city.
We are also delighted that Award and Glasgow Institute of capacity entertainment arena to The Glasgow 2014
The SSE Hydro has received Architects Supreme Award. (The SSE Hydro), the relocation “Further investment in our Commonwealth Games.
numerous awards in its first of a heliport, roads and venues is planned to ensure
six months of operation. These Over the past few years infrastructure development, that we are well placed to meet Our 4th place in the Pollstar
include The Scottish Property the business has invested hotel, multi storey car park the needs of the conference Global Arenas rankings during
Award for Architectural in the campus facilities and construction and residential and exhibition markets through the quarter to March 2014,
Excellence, The 2014 RICS infrastructure under the development located on the coming years in the face of rising to 3rd for the six months
Scotland Award for Best Project QD2 project. In total, the west end of the campus. increasing UK and international to June 2014, has seen one of
- Tourism and Leisure, Scottish QD2 project comprises the Along with the completion competition.” the key targets for The SSE
Style Most Stylish Venue construction of a 13,000 of The SSE Hydro, this year Hydro being achieved. We
8 Corporate Review 2013 – 14 9
Exhibitions EXHIBITIONS AT A GLANCE In 2013/14 exhibitions delivered
a solid performance when
The objective for 2014/15 will
be to maintain strong retention
— Total Revenue £2.59m, (down from £2.71m) confidence in the market is still business and increase show
— Total GP £2.04m (down from £2.3m) fragile. We saw a 4% drop in numbers with a focus on
revenue although this is a year new business and specifically
— 33 total shows ( 36)
in which two of our biggest trade events. We are proud
— 11 trade (12) biennial shows (Scothot and The to include some of the UK’s
— 22 consumer (24) Scottish Golf Show) do not occur. largest show organisers as
clients but equally pleased to
— 5 new launches We retained 86% of our tenancy be working with smaller, niche
— Total attendance 275,649 (296,645) revenue and continued with organisers especially around
another strong year for new new events. Customer service
business attracting five new and client experience are among
shows that generated £227k. All the SECC’s strengths and will
are set to repeat with us and in continue to be a fundamental
particular Comic Con will almost part of our proposition.
double its size year on year.
10 Corporate Review 2013 – 14 11
Conferences CONFERENCES AT A GLANCE The performance from the
conference sector remained solid
The SECC once again
demonstrated its position as
Looking forward, conference
sales are on target to provide
— 59 conferences (16% increase) for 2013/14 delivering 24% of a major UK and international an increased return for the
— 65,925 delegates (53% increase) overall venue turnover and 28% conference venue for association company in 2014/15, with a
of GP. Whilst the turnover and meetings, hosting numerous further increase forecast for
— 176,163 delegate days (7% increase)
GP were both down by 14% on prestigious events which 2015/16. Recently secured
— Turnover down 14% the previous year, which was included the Association of business as far ahead as
— GP down 14% a particularly strong year, the Surgeons of Great Britain and 2022 suggests that the
sector delivered 59 meetings in Ireland, the British Society of SECC and Glasgow remain
— 24% of venue turnover total, which saw a 16% increase Gastroenterology, the Liberal an attractive venue and
— 28% of venue GP on the number of events that Democrats Annual Party location for conferences
were held in 2012/13. Conference, and the European and corporate events.
Society of Environmental
An increase in tenancy Toxicology and Chemistry.
availability with the opening The sector’s business for the
of The SSE Hydro created year closed with the European
greater opportunities for short Breast Cancer Conference which
lead corporate meetings which attracted over 3500 delegates.
generated a record return for
the company and accounted
for 29 events.
12 Corporate Review 2013 – 14 13
Live CONCERTS AND EVENTS AT A GLANCE Undoubtedly the highlight of
this year was the completion
Across the whole SECC campus,
the Live Entertainment sector
The mix of quality content
and an increased number
— 270 performances over 118 unique events
Entertainment — 1,297,963 Live Entertainment visitors across
and opening of The SSE Hydro.
Opened by Rod Stewart on 30th
enjoyed a healthy year, with
an increase in turnover of 27%
of performances resulted in
significantly stronger revenues
September 2013, this state- on the previous year. A wide from ticketing operations. Box
the campus (an annual increase of 33%)
of-the-art arena significantly range of events contributed to office revenue was further
— 61% of venue turnover changed the Glasgow skyline the numbers including Cirque supported by solid demand
— 54% of venue gross profit and the Live Entertainment Du Soleil, Disney on Ice and for events already on sale, but
landscape. Since opening, many of the world’s top touring scheduled for the next fiscal
The SSE Hydro delivered artists including Prince, Justin year (such as the impressive
622,456 visitors this year - and Timberlake, Arctic Monkeys, twenty one performances of
consequently the arena was Queens of the Stone Age and Still Game, scheduled for the
placed fourth in the Pollstar Dolly Parton. Once again our end of 2014).
listing of top global arenas pantomime offering (one of the
(based on attendee numbers). top three in the UK) delivered The Live Entertainment outlook
strong returns. for next year remains positive,
with a healthy flow of events in
the pipeline.
14 Corporate Review 2013 – 14 15
Year end Scottish Exhibition Centre Ltd Year end
Scottish Exhibition Centre Ltd 31 March 2014 Group Balance Sheet 31 March 2014
Key performance indicators
2014 2013
2014 2013 Change Fixed Assets £ £
Turnover – recurring £23.3m £20.0m 16% Tangible fixed assets 104,861,795 64,415,254
EBITDA ¹ £1.8m £1.2m 46% 104,861,795 64,415,254
Net cash inflow from operating activities £17.0m £7.5m 125% Current Assets
Capital Expenditure £42.6m £32.3m 32% Debtors 7,950,178 11,578,129
Economic Impact (estimated) £378m £357m 6% Cash at bank 8,690,265 29,274,720
Number of Visitors 1.4m 1.3m 7% 16,640,443 40,852,849
Pollstar Arena Global Ranking 4th 13th 9 places Creditors
Amounts falling due within one year (31,940,592) (21,062,389)
¹ EBITDA is defined as operating profit from recurring operations before depreciation of assets and release of grants.
Net Current Assets (15,300,149) 19,790,460
Total Assets Less Current Liabilities 89,561,646 84,205,714
Creditors
Amounts falling due after more than one year (45,818,325) (40,000,000)
Provision For Liabilities And Charges (1,692,679) (1,788,373)
Accruals And Deferred Income
Scottish Exhibition Centre Ltd Year end Deferred grants (40,023,693) (40,547,495)
Group Profit and Loss Account 31 March 2014 Net Assets 2,026,949 1,869,846
2014 2013 Capital And Reserves
Turnover £ £ Equity share capital 21,900,000 21,900,000
Operating Turnover 23,321,828 20,049,905 Capital Redemption Reserve 2,750,000 2,750,000
Car Park Construction 9,458,244 Revaluation reserve - -
Group Turnover 23,321,828 29,508,149 Profit and loss account (22,623,051) (22,780,154)
Group Operating costs (23,121,843) (28,379,322) Total Shareholders’ Funds 2,026,949 1,869,846
Group Operating Profit 199,985 1,128,827
Year end
Investment Income - 75,609 Group Cash Flow Statement
31 March 2014
Gain on sale of investments - 42,093
Interest receivable 110,034 185,764 2013 2012
Interest payable (248,610) - £ £
Profit On Ordinary Activities Before Taxation 61,409 1,432,293 Net cash inflow from operating activities 16,974,756 7,541,211
Tax on profit on ordinary activities 95,694 (346,288) Returns on investment and servicing of finance (138,576) 261,373
Profit for the Financial Year 157,103 1,086,005 Taxation 133,500 (220,023)
Capital expenditure net of grant receipts (42,554,135) (31,291,435)
Sale and Leaseback - 40,000,000
Receipt from sale of tangible fixed assets and investments - 4,665,212
Increase/(decrease) in cash before Financing (25,584,455) 20,956,338
Bank Loan 5,000,000 -
Increase/(decrease) in cash in the Year (20,584,455) 20,956,338
Net funds at 1 April 29,274,720 8,318,382
Net funds at 31 March 8,690,265 29,274,720
16 Corporate Review 2013 – 14 17Scottish Exhibition + Glasgow G3 8YW
Conference Centre T: +44(0)141 248 3000
F: +44(0)141 226 3423
www.secc.co.uk
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