2017/18 has been another very successful year for Scottish Event Campus Limited. Turnover increased by 1% to £29.1m, EBITDA* increased by 11% to £3.8m and Operating Profit increased by 19% to £1.3m.
Peter Duthie, Chief Executive, SEC commented:
“This has been a really encouraging year with solid performances across all the sectors in which we operate. The SEC continues to be an economic driver for Glasgow and Scotland and the results are measured not only in financial terms but also by the economic impact of the campus which generated net additional expenditure of over £1m per day in the Glasgow area, a total of £400m for the year.
“The results include the impact from the disposal of the second of two hotel sites on the campus. The development of the two hotels is expected to begin in the summer of 2018 with opening anticipated in 2019. This will increase the number of hotel bedrooms around the campus from 950 to almost 1,400 and will be an invaluable addition to support our growing Conference and Exhibition sectors as well as our Live Entertainment offering.
“In line with this, a key focus will be to secure funding for our expansion project which will be of significant benefit to the Glasgow, Scottish and UK economies. The development plans fit with the objectives of Glasgow City Council, as major shareholder, to ensure additional economic benefit across the city in terms of spend on hotels, restaurants, retail, and the related employment creation.”
“We continue to be recognised with a string of plaudits and major industry awards which reflect the increased standing which the SEC, including The OVO Hydro, has in the various sectors in which we operate.”
The SEC continues to win business and during the year a record level of future conferences was secured. Nine international conferences were held during the year and whilst conference turnover decreased by 2%, the lower level of turnover was expected and was in line with the cyclical nature of some national and international conferences. Looking ahead, stronger conference years are predicted in 2018/19 and 2019/20.
Live Entertainment turnover was in line with the previous year and with the number of performances in line with UK trends. Visitor numbers to The OVO Hydro were over nine hundred thousand which saw the venue listed at number 4 in the Pollstar ranking of Global Arenas for the year to December 2017, an improvement of four places compared to the previous year. The venue achieved a number 1 ranking in the Billboard list of global arenas which measures venues with a capacity between 10,000 and 15,000. Both organisations measure paid attendees at concerts and events. During the year The OVO Hydro has placed the campus on the world stage for hosting live entertainment with the venue hosting many of the world’s top artists such as Celine Dion, Bruno Mars and Ed Sheeran. Other event highlights included Andy Murray Live, Boxing, Disney Ice Productions and WWE Wrestling.
A wide range of events continued to be staged across the full campus including musical and stage productions, comedy, live music and the 7th successful year of our pantomime offering which was one of the top three pantomimes in the UK. 2018/19 will see a three week run of the acclaimed theatre production, War Horse, in the SEC Armadillo and demand for future events also continues to be strong with 2018/19 shaping up well with a host of international artists including Justin Timberlake, Paul Simon and a multi night run by Kevin Bridges fuelling forward ticket sales.
Following the record year in 2016/17, Exhibition turnover increased during the year with five new events added. The All Energy exhibition and conference, the largest sustainable energy show in the UK, continues to be an annual event on the campus. A wide range of consumer events was hosted including MCM Comic Con® for the 4th year with a record number of attendees recorded this year. The SEC also hosted Brick Live, a Lego exhibition for the first time. Further new shows will be added in 2018/19.
QD Events, our event management subsidiary, has continued to provide a solid contribution to Group results driven by the existing portfolio of shows including The Scottish Caravan, Motorhome and Holiday Home Show, The Scottish Wedding Show and The Irn-Bru Carnival.
Overall cash balances increased by £5.8m in the year. The level of ticket sales for future OVO Hydro performances during the year was a key contributor. Whilst the business is inherently cash generative, there can be variations from year to year as a result of cash held on behalf of concert promoters.
Trading profits continue to be reinvested to ensure the existing facilities meet the needs of our customers in an increasingly competitive market. An example of this, and a significant addition, has been the creation of the recently launched SEC Meeting Academy which caters for smaller conferences and meetings.
To capitalise on the success that Glasgow and Scotland have had in the events industry over recent years a feasibility study was prepared in the previous financial year to establish viable options for upgrading and expanding the campus, principally to facilitate further growth in the Conference and Exhibition sectors. In the current financial year, a Planning Permission in Principle application has been proposed and supported by a robust business plan and an economic impact study.
* EBITDA is defined as operating profit from recurring operations before depreciation of assets and release of grants. The increase in EBITDA was driven by efficient cost management in our event delivery and supply chain management whilst investing in additional staff in our event delivery teams.