Features
NEC Wobbles On Exhibition Cycle
With operating profits down nearly £10 million it appears to have been a shaky year for The NEC Group, but head of operations John Hornby said it’s all part of "the exhibition cycle."
Big exhibitions happen every year but many are staged every two, three or four years, which sometimes means business comes around less frequently and takings inevitably drop.
The year ending March 31 was the lowest year in the traditional four-year cycle of exhibitions, and it saw that sector of NEC’s operations turn over £84.1 million and make an operating profit of £26.3 million.
"It’s the result we expected because in the exhibition business the cycle is obviously predictable," Hornby said, explaining the sharp drop from last year’s £97.7 turnover and £38.7 million profit.
Exhibitions account for about 70 percent of NEC’s revenues and profits and heavily impact the bottom line, almost obscuring other operating areas that performed very well, including live entertainment.
Turnover in the live sector was up £1 million to £20.3 million, but rising costs pegged the profit at £2.7 million.
The conference business, which is more regular than exhibitions as most gatherings are annual, returned an operating profit 12 percent up at £3.5 million.
The group reports that almost all of this increase could be attributed to the impact of the contract to operate the new national Convention Centre in Dublin, which is scheduled to open in 2010.
NEC Group revenues were £127.3 million (down from £139.9 million) and operating profit fell from £44.6 million to £34.9 million, but the cyclical nature of the exhibition business should see the figures shoot back up by April 2009.
The 2008 net profit after loan repayments, interest and tax was £2.9 million, well down on the £12.9 million achieved last year.