Corporate Review 2003-05

SEC LTD CORPORATE REVIEW 2003/2005
Scottish Exhibition + Conference Centre, Glasgow G3 8YW Scotland
Tel: +44 (0) 141 248 3000 Fax: +44 (0) 141 226 3423 E-mail: [email protected] Visit our web site on: www.secc.co.uk
Contents
Chairman’s Statement
2
Chief Executive’s Review
4
Group Profit and Loss Account
6
Group Balance Sheet
7
Operating and Financial Review
8
Business Overview
10
Financial Highlights
2003/05
2002/03
2001/02
2000/01
1999/00
(18 months) (12 months) (12 months) (12 months) (12 months)
£000
£000
£000
£000
£000
Turnover Recurring
Joint Venture Turnover
Non Recurring
Total Turnover
Operating Profit/(loss)
Profit on Ordinary
Activities Before Taxation
Taxation
Net cash inflow/(outflow)
from Operating Activities
Returns on Investment and
Servicing of Finance
Net Capital Expenditure
18,862
2,844
–––––––––
21,706
–––––––––
12,404
11,591
11,247
10,293
–––––––––
12,404
–––––––––
46
–––––––––
11,637
–––––––––
1,631
–––––––––
12,878
–––––––––
824
–––––––––
11,117
–––––––––
687
948
303
284
362
2,201
1,287
851
912
1,044
748
476
303
364
330
6,360
3,173
3,218
2,043
345
994
565
554
610
647
(2,471)
(4,014)
(1,275)
(3,555)
(518)
Chairman’s Statement
staged 91 conferences generating a record
255,128 delegate days for the City and Scotland.
This compares with 78 conferences generating
just under 185,000 delegate days in the
preceding 12 months.
In reviewing the performance of the Company,
there are a number of issues and changes in
presentation from previous years that must be
highlighted.
First of all, we have changed our accounting
period. Henceforth, our financial year will end
on 31 March as opposed to 30 September as it is
felt that this better fits our business and
budgeting cycles. As a consequence, the period
under review is 18 months, covering from 1
October 2003 until 31 March 2005. Secondly, for
the first time we have excluded any contribution
from the Organising Division; it has been
replaced by our joint venture company, Clarion
Events (Scotland) Ltd (CESL). We have therefore
included our 50% share of its turnover and
operating profit in the results. In addition, there
are some costs associated with the QD2 project
that are included in the profit and loss account.
All of this means that any meaningful
comparisons with previous years, even on a pro
rata basis, should not be made, especially as our
business is not evenly distributed throughout the
year.
As has been mentioned on previous occasions,
we are now on a rota of venues for many
national association conferences. This means
that they return to the SECC on a regular three
or four year cycle. Whilst this is fundamentally
a very beneficial development, essentially
creating core conference business, it can have
both a positive and a negative impact. When the
cycles of a number of these conferences
coincide, it can create a bumper year for national
association business.
Unfortunately the
opposite is also true. During this period, it was
not our turn for a number of such clients,
leading to a reduction in the number of national
association conferences staged. We staged 21
national association conferences, generating
almost 57,000 delegate days over the 18
months; this compares with 22 conferences
generating over 72,000 delegate days in the
preceding 12 months.
Having highlighted the difficulty in making
comparisons, I nevertheless believe that we
continue to make good progress. Turnover for
the 18-month period was £21.7 million, including
£2.8 million from CESL and net profit before
taxation was £2.2 million. This is a pleasing
result particularly when there have been upward
pressures on costs. Energy costs, for example,
have risen by 35% and the cost of installing the
seating in Hall 4 for concerts has also risen
significantly. As I have mentioned before,
SECC’s business is primarily low margin and any
increases in costs can have a disproportionate
impact on our bottom line. I am therefore
pleased to report that the Company is
maintaining tight management of costs.
We staged nine international association
conferences generating a total of 154,996
delegate days. This compares with the 75,951
delegate days generated by the same number of
conferences in 2002/2003. Of particular note
was the European Respiratory Society, the
largest medical meeting ever to be staged in
Scotland, which brought almost 15,000
delegates and exhibiting personnel for their fiveday congress in September 2004.
The concert and events sector continues to grow
and now accounts for 34% of turnover.
However, as mentioned previously, the cost of
erecting and dismantling the temporary seating
for concerts and events has increased
substantially and accordingly, the sector
accounted for 28% of gross profit. We staged a
total of 90 concerts in Hall 4 in 15 separate
seated windows. With each window requiring a
minimum of 3 days to build and dismantle the
seats, it is clearly a factor contributing to the
availability problems we are now facing in Hall
4. The Chief Executive’s Review will cover this
issue in greater depth. We also staged 69
concerts in the Clyde Auditorium. It is proving
an increasingly popular venue for promoters of
concerts with an audience of up to 3,000. With
new venues opening in the City however, we are
In reviewing the individual market sectors in
which we operate, the exhibition market is fairly
static at present. It accounted for some 26% of
turnover and 31% of gross profit. We staged a
total of 69 exhibitions during the period; 23 trade
and 46 consumer. As I have previously stated,
the exhibitions business throughout the UK is
facing a challenging time at present,
nevertheless, we are successfully maintaining
both business levels and margins.
Overall, the conference sector performed very
well. During the 18 months under review, we
2
village” and provide a range of residential
accommodation, from riverside townhouses and
family homes to affordable and key worker
housing. The designs for the Arena are nearing
completion and I believe Fosters have again
created a stunning building which will make a
positive contribution to the Glasgow skyline and
become a national asset, ensuring that the
world’s top entertainers continue to come to
Scotland. The Chief Executive’s Review provides
a fuller account of the project in general and the
Arena in particular.
likely to face increasing competition so we
cannot be complacent.
The Box Office is our fastest growing business
sector; it now accounts for 15% of turnover and
16% of gross profit, which compares with 10%
and 11% respectively in the year to September
2003. The Box Office function was brought inhouse in 2001 with the objective of not only
improving the service to existing clients and to
the public for events staged at the SECC but also
to provide commercial opportunities. With the
infrastructure and staff in place to handle the
SECC business, we introduced SECxtra, a brand
that allowed us to offer a ticketing service for
non-SECC events. During the period under
review, we sold a total of 1.29 million tickets, 65%
for SECC events and the balance through
SECxtra. These tickets had a face value of just
under £30 million, resulting in an obvious
improvement in our core cash position. We now
sell tickets on behalf of clients such as the
Scottish Football Association, the Scottish Rugby
Union, Aberdeen Exhibition and Conference
Centre and the Festival Theatre in Edinburgh, as
well as providing a ticketing service for events
and tours throughout the UK for a number of
clients.
In conclusion, I should like to express my
appreciation to my colleagues on the Board for
their continuing support and for their positive
contribution throughout the period. In particular,
I must pay tribute to Sandy Walker. Sandy is
retiring from the Board after nine years as a
director of the Company and I should formally
like to record my appreciation for his efforts and
for the sound advice he has provided during this
time. I should also like to extend a warm
welcome to Sandy’s successor, Keith Wyness.
Keith has considerable experience in a number
of industries and I am sure his knowledge will be
an important asset to the Company in the years
to come. Last but by no means least, I am
grateful to the management and staff for
producing, what I believe are, excellent results in
sometimes difficult circumstances. Despite the
considerable amount of management time being
spent taking the QD2 project forward, they have
remained focussed on the core business whilst
keeping costs firmly under control.
The potential for further growth in the Box Office
is still extremely strong but over the next few
years, we expect this growth to come primarily
from SECxtra.
Last year, I mentioned that following a review of
the Organising Division, we concluded that the
creation of a joint venture company with Clarion
Events would be the best way to unlock the
potential of the division and to achieve our
ambition of securing growth through expanding
the exhibitions market in Scotland. CESL is now
operating at full strength and I am pleased to
report that on an annualised basis, overall
returns to the Group are up on the 2002/2003
returns from Organising Division, albeit there
was some benefit attributable to the favourable
business cycles in the period under review.
Ian D Grant CBE
Chairman
We are making excellent progress with the QD2
project, which, as I mentioned in my previous
report, created a vision for the future
development of the SECC site, in order to raise
capital receipts to help fund the construction of a
new purpose-built entertainments Arena. In
April 2004, following a thorough OJEC tendering
process, we appointed Foster and Partners, who
designed the Conference Centre, as architects for
the Arena. In July 2004, we selected Glasgow
company Elphinstone as preferred developer for
the west end of our site to create a “sustainable
3
Chief Executive’s Review
Our financial performance over the period
October 2003 to March 2005 has continued the
trend of consistent growth of both turnover and
profit. Nevertheless, we can expect the next 12
months to be challenging in all business sectors
as the upward pressures on costs erode profit
margins. We shall therefore be continuing with
our policy of tight control of both our direct and
indirect costs.
weeks; the conference of the European
Respiratory Society, with 15,000 delegates and
exhibiting personnel, was one of the largest
medical conferences ever to be staged in the
UK; and Supercross, where we brought in 200
tons of soil to transform Hall 4 into a multi-lane
dirt track creating dirt ramps and dips for high
powered motocross bikes along with tiered
seating for over 4,500 spectators.
During the period under review, SECC attracted
almost 2.5 million visitors who attended 376
different events; almost 60% attended concerts
and events, 30% attended exhibitions and 10%
conferences. This compares with the 1.4
million attending 230 events in the preceding 12
months. The visitors, exhibitors, delegates and
organisers attending these events injected just
over £169 million into the economy of Greater
Glasgow, providing bednights for the hotels,
diners for the restaurants, passengers for the
taxis and visitors for the galleries, museums
and other tourist attractions throughout
Scotland.
The chart below clearly
demonstrates the disproportionate value that
conferences have for the City. It shows that
although conferences attracted 10% of our
visitors, they injected £58.4 million into the
local economy, some 35% of the total economic
benefit. However, exhibitions continue to
provide the greatest contribution accounting for
£66.7 million, 39% of the total.
The outlook for SECC in the short to medium
term remains positive.
A review of our
business activities over the next three years
highlights continued growth in conferences,
while the exhibition sector will achieve some
organic growth, but will largely remain static.
The potential for growth in the concert and
events sector will be limited by availability in
Hall 4 and the outlook for the Box Office is
exceedingly positive.
Whilst the last 18 months have been extremely
eventful, the biggest catalyst for change and the
determining force in our future is undoubtedly
the QD2 master plan for the site, which we
revealed in October 2003.
At the heart of the project is the construction of
a 12,500-seat purpose-built Arena, which will
expand and enhance the range and quality of
our core activities. Designed as a National
Arena for Scotland, its construction is
imperative if we are to capitalise on the
growing arena concert market. Hall 4, our
biggest and busiest hall, is host to major acts on
the world touring circuit. However, if concert
business grows as expected, we could find
ourselves in the position of having to turn
events away through lack of availability until
the Arena opens. An analysis of Hall Loading
during 2003/2004 highlighted that Hall 4 was
96.6% utilised, which clearly leaves little
opportunity for further growth. Moreover, the
mounting costs of building and dismantling
temporary seating in Hall 4 is squeezing profit
margins and a purpose-built arena will not only
solve this problem, it will free up the hall for
future growth in conferences and exhibitions.
Economic Benefit to Greater Glasgow
for 18-month period to March 2005 (£m)
43.9
66.7
Exhibitions
Conferences
Concerts/events
58.4
With an increased level of activity in all market
sectors we staged some landmark events
during the period: the visit by his Holiness, the
Dalai Lama; the Tsunami Relief Concert,
organised, sold out and staged in just five
The Arena is therefore crucial and our 64-acre
site is to be redeveloped to raise capital receipts
to ensure its construction. Since we revealed
our plans, we have made considerable progress
4
on this front. In April 2004, following a rigorous
tendering process, we appointed worldrenowned architects Foster and Partners, who
also designed our iconic Clyde Auditorium, as
design team leader for the Arena and final
designs are almost complete.
continued growth in turnover and profit, but
behind those top line figures, we have
witnessed a significant increase in the number
of events we stage. The number of times where
we are simultaneously staging three or even
four events has grown dramatically. For a
venue that only closes on one day a year, this
puts incredible stresses and strains on our staff
and I am indebted to them for their dedication
and commitment to making sure that all events
are presented successfully and professionally. I
am delighted to be able to report that despite
these added pressures, we have seen an
increase in the number of letters of
commendation we receive from clients about
the
helpfulness,
professionalism
and
friendliness of our staff – it is this that
distinguishes us from other venues.
As with the Clyde Auditorium, the Arena will be
constructed with functionality in mind. It has
therefore been designed from the inside out to
ensure it fulfils its purpose of delivering the
ultimate entertainments experience.
The
seating layout was designed first to guarantee
superb sightlines from every seat, followed by
circulation spaces, bars, restaurants, catering
and merchandising outlets and toilet facilities.
Only when we were happy with these elements
did the architects begin to design the exterior. I
believe we shall create a venue with the
winning combination of practicality encased in
a stunning building for a first-class visitor
experience.
To the west of our site we have appointed
Glasgow company, Elphinstone as the
preferred developer to build a sustainable
urban village providing around 1,700 homes in
an arrangement of housing, including riverside
townhouses, key-worker accommodation and
affordable homes. It will also include space for
a nursery and primary school, as well as
commercial and retail opportunities.
Michael J Closier
Group Chief Executive
In the early stages of the Arena concept,
revenue from the development of a casino had
been factored into its proposed funding
package and in July 2004 we appointed Kerzner
International as our preferred developer,
pending changes in gaming legislation which
were required to allow the casino to be built.
Kerzner’s proposed £162 million destination
resort casino would not only consist of the
regional casino but would also include a 5-star
150-room hotel, associated bars, restaurants
and leisure facilities as well as a 1,600-vehicle
multi-storey car park, providing additionality for
the site.
The Government will appoint a selection
committee in October this year to advise
ministers on possible locations for regional
casinos and we hope further clarification on the
potential for one in Scotland will follow.
Finally, I should like to pay tribute to the staff.
Over the past few years, we can demonstrate
5
Scottish Exhibition Centre Limited
Group Profit and Loss Account
for the 18 months ended 31 March 2005
2005
18 months
£
21,705,925
2003
12 months
£
12,404,238
(2,843,500)
–––––––––––
18,862,425
–––––––––––
12,404,238
Operating costs
18,559,607
–––––––––––
302,818
11,890,848
–––––––––––
513,390
Other operating income
384,000
–––––––––––
686,818
435,000
–––––––––––
948,390
264,163
–––––––––––
950,981
(223,000)
–––––––––––
725,390
263,752
–––––––––––
1,214,733
(3,542)
–––––––––––
721,848
816,515
485,120
169,615
–––––––––––
2,200,863
80,116
–––––––––––
1,287,084
747,934
–––––––––––
1,452,929
–––––––––––
1,452,929
–––––––––––
476,437
–––––––––––
810,647
–––––––––––
810,647
–––––––––––
1,512,292
(59,363)
–––––––––––
1,452,929
–––––––––––
752,315
58,332
–––––––––––
810,647
–––––––––––
Group and share of joint venture turnover
Share of joint venture turnover
Group turnover
Group operating profit
Share of operating profit/(loss) in joint venture
Total operating profit
Gain/(Loss) on sale of fixed assets
Interest receivable
Investment income
Profit on Ordinary Activities Before Taxation
Tax on profit on ordinary activities
Profit on Ordinary Activities After Taxation
Retained Profit for the Year
Attributable to:
Parent company
Subsidiaries and Joint Venture
Group Statement of Total Recognised Gains and Losses
for the 18 months ended 31 March 2005
Profit for the Financial Period
Unrealised surplus on revaluation of investments
Total Recognised Gains and
Losses Relating to the Period
6
2005
18 months
£
2003
12 months
£
1,452,929
810,647
253,531
–––––––––––
106,664
–––––––––––
1,706,460
–––––––––––
917,311
–––––––––––
Scottish Exhibition Centre Limited
Group Balance Sheet - 31 March 2005
31 March
2005
£
30 September
2003
£
22,426,263
4,245,858
–––––––––––
26,672,121
19,383,990
2,745,919
–––––––––––
22,129,909
2,944,960
15,531,760
–––––––––––
18,476,720
3,128,662
12,283,835
–––––––––––
15,412,497
Total Assets Less Current Liabilities
13,051,464
–––––––––––
5,425,256
–––––––––––
32,097,377
8,266,965
–––––––––––
7,145,532
–––––––––––
29,275,441
Provision for Liabilities and Charges
1,840,808
1,130,105
3,308,482
–––––––––––
26,948,087
1,403,709
–––––––––––
26,741,627
21,900,000
1,250,000
1,500,000
253,531
2,044,556
–––––––––––
26,948,087
21,900,000
2,750,000
Fixed Assets
Tangible assets
Investments
Current Assets
Debtors
Cash at bank and in hand
Creditors
Amounts falling due within one year
Net Current Assets
Accruals and Deferred Income
Deferred grants
Capital and Reserves
Equity share capital
Non-equity share capital
Capital redemption reserve
Revaluation reserve
Profit and loss account
Total Shareholders’ Funds
(496,008)
2,587,635
–––––––––––
26,741,627
Summarised Group Cash Flow Statement
for the 18 months ended 31 March 2005
Net cash inflow from operating activities
Returns on investment and servicing of finance
Corporation tax (paid)/received
Capital expenditure
Financing
Increase/(decrease) in cash
Net funds at 1 October
Net funds at 31 March/30 September
7
2005
18 months
£
2003
12 months
£
6,359,983
3,173,082
993,630
565,236
(134,513)
33,769
(2,471,175)
(4,013,887)
(1,500,000)
–––––––––––
3,247,925
–––––––––––
(241,800)
12,283,835
–––––––––––
15,531,760
–––––––––––
12,525,635
–––––––––––
12,283,835
–––––––––––
Operating and Financial Review
Operating
and CESL to Group results, profits increased
by 80% over the 18-month period compared
with the previous year. This was mainly due
to a strong final 6 months which is typically
the busiest period in the business cycle.
The results represent an 18-month period
as the date of the financial year end has
been changed from 30 September to
31 March to better fit the business cycle
and other reporting disciplines. The results
also bring for the first time the 50% share
of the Clarion Events (Scotland) Ltd
(CESL) joint venture into turnover. In
addition, the business cycles of the various
divisions are not evenly distributed
throughout the year and also included within
the profit and loss account are a number of
costs incurred in relation to the QD2 project.
As a result pro-rata comparisons with the
previous year to September 2003 are not
readily made. Nevertheless, turnover and
pre-tax profit showed continued growth
during the period.
Figure 1 shows the continuing improvement
in the Group turnover (excluding that from
CESL) over the last five years from recurring
business. During this period, turnover from
space letting and services has increased from
£10.3million to £18.9million – some 83%.
However it must be recalled that the figure for
2005 relates to an 18-month period.
Turnover 2000 - 2005 (£m)
15
10
5
0
The conference sector had a good year to
September 2004 offset to some extent by a
slower final six months to March 2005.
Historically, October to March is the quieter
period in the business cycle. This resulted in
an 18% increase in turnover and 3% increase
in profits for the 18 months compared with
the preceding year. Exhibitions, concerts and
events had an excellent period with
impressive growth in turnover and profit,
both of which have almost doubled in the 18month period compared with the previous
year. Concerts in particular had an extremely
good period and this had a consequential
benefit in Box Office revenues. The Box
Office business has enjoyed remarkable
growth over the last few years and it has
successfully expanded its external sales
operation as well as satisfying venue
demand.
Margins have remained under
control across the period under review
despite increased pressures in core space
letting costs.
12 mths
2000
12 mths
2001
12 mths
2002
Space letting and services
Total Turnover
12 mths
2003
18 mths
2005
Exhibition/Event Organising
Figure 1
The group continues to benefit from turnover
and profit streams over a number of
complementary areas serving to underpin
continuous positive performance and growth.
Nevertheless, excluding investments and
other operating income, the business works
on extremely tight margins. The outlook for
the next 12 months remains challenging in
view of the tight constraints on space
availability in Hall 4 and upward pressures on
costs.
Financial
Profit and Loss Account - Operating profit at
trading level in the 18-month period 2003/2005
was down on the previous 12-month period.
This was due to a combination of the transfer
of the Organising business and associated
costs into CESL, the absorption of early QD2
costs and some one-off benefits recognised in
The Organising Division activity is included in
the comparative results up to the transfer of
its activities to CESL in March 2003. In terms
of overall return of the Organising Division
8
2002/03. The overall result however was a 70%
increase in pre-tax profit to £2.2m for the 18month period compared with £1.3m in the
previous year.
Cash Flow - The Group continued with
another strong inflow of cash from operations
over the 18 months amounting to some £6.4m,
mainly from improved working capital
management arising as a result of the healthy
Box Office business. The operational cash
inflow was bolstered by £1.0m of investment
income cash inflows, mainly arising from
interest receipts. The main focus of cash
outflow was net capital expenditure of £2.5m
on fixed assets and investments and £1.5m on
the repurchase of preference share capital.
Figure 2 highlights the Group’s total
performance over the last five years in terms
of net profit before exceptional and
extraordinary items and taxation.
Trading Profit 2000 - 2005 (£m)
2.5
2
1.5
1
0.5
0
12 mths
2000
12 mths
2001
12 mths
2002
12 mths
2003
The Group made no contribution to any
political organisation. It did however stage a
charity concert in conjunction with the major
Scottish promoters in response to the
overwhelming Tsunami disaster in December
2004. The event raised over £340,000 with
everyone involved donating their time and
services free of charge. The Group’s ordinary
share capital remains unchanged. The major
shareholder is Glasgow City Council which
holds 90.86% of the ordinary share capital.
The balance of the share capital is held by the
private sector including the three major
Scottish clearing banks and other financial
institutions.
18 mths
2005
Figure 2
The decision to diversify the investment
portfolio in 2003 has resulted in a more
diversified non-cash asset base as well as a
strong cash position. The Group’s objective
remains one of investing for the future in
capital infrastructure whilst achieving capital
and income growth on its investment assets.
Recognised Gains and Losses - The
Investment Portfolio changes implemented
during the period have begun to show
promising returns against a backdrop of a
more diversified risk strategy.
John Sharkey C.A.
Director of Finance
Balance Sheet - The significant movements
on the balance sheet were the level of fixed
asset expenditure incurred in capital and
investment and the increase in cash position
partly due to cash held on behalf of clients
which is shown as an increase in creditors, as
ticket sales less costs are due to Box Office
clients on settlement of events.
Capital
expenditure has been supported to some
extent by grants which will be released in line
with depreciation on grant-funded assets. The
Group began a preference share capital
redemption programme during the period and
redeemed £1.5m of preference share capital.
The programme will be completed in the
current year.
9
Business Overview
reduction in biennial exhibitions creates a
more stable environment, freeing up tenancy
and offering greater flexibility to secure annual
exhibitions.
Exhibitions
Exhibitions continue to make a significant
contribution to both turnover and gross profit.
Relative to 2002/2003, the exhibition market
has in last 18 months remained relatively
static, producing 26% of gross turnover and
31% of gross profit. This can be viewed as a
positive result given that we had expected a
downturn in the short-term future of this
sector.
Events
The events sector, consisting of concerts and
special events, has gone through a period of
significant growth to become an increasingly
important part of our business; not only
directly but also indirectly through the
business it creates for our Box Office. During
the period under review, the events sector
generated 34% of turnover and 28% of gross
profit. In the preceding 12 months, the
equivalent figures were 28% and 27%
respectively, which is indicative of the impact
increasing costs are having on gross profit.
In the 18-month term we staged 69
exhibitions, 33% of which were trade shows
and 66% were consumer events.
This
compares with 39 exhibitions in the 12 months
to September 2003 when the ratio was 61%
consumer and 39% trade. The sector is
essentially reflecting a general move in the
economy from manufacturing to retail and
services. Consequently we can expect to see
an increase in retail exhibitions, which have
enjoyed strong consumer attendance in the
period under review. However, the principal
change for this sector is the erosion of the
biennial cycle with the number of large
biennial events being reduced in favour of
smaller annual events. This shift can be
attributed to a reduction in importance in large
biennial trade exhibitions and also a change in
the way the motor industry markets itself to
the consumer. The Scottish Motor Show,
which was our largest biennial event, ended its
exhibition run for this reason. Nonetheless the
We staged 172 music concerts, covering all
genres, during the 18-month period which
compares favourably with the 88 staged
during the previous 12 months. In Hall 4, our
largest capacity hall, 90 were staged, Hall 3
and Hall 5 each staged four and Hall 2 held
one. A total of 69 concerts were also staged in
the Clyde Auditorium and there were five in
the 624-seat Lomond Auditorium.
The increase in number of concerts brought a
more varied selection of artist to the venue
and included performers such as Eric Clapton,
Justin
Timberlake,
David Cassidy and 50
Cent.
Particularly
noteworthy was Kylie
Minogue’s five-night
sell-out show in Hall 4
which marked the first
leg of her Showgirl
world tour, generating
unprecedented press
coverage throughout
the UK and beyond
and reaffirming our
important position on
the tour circuit as the
venue to start or finish
a major tour.
Kylie’s five night sell-out Showgirl Tour made her the SECC’s biggest selling solo artist to date. We were honoured,
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business, we held fewer national association
conferences than in the 12 months of
2002/2003.
There were nine international association
meetings and whilst this matched the number
staged in 2003, they generated a record 154,996
delegate days in comparison to 75,951 in the
period last reviewed. This doubling of the
number of delegate days can largely be
attributed to the European Respirator Society
(ERS), which brought 14,518 people from more
than 100 countries to the City for one of the
UK’s largest medical conferences. Comprising
11,000 delegates and accompanying patrons, as
well as a large concurrent exhibition, the
conference injected over £10 million into the
local economy and was widely considered to be
a major success.
Supercross riders competed on a specially created dirt
track in Hall 4.
along with some of the biggest names in the
live music industry and many others working
behind the scenes, to stage the Tsunami Relief
Concert in February 2005. Everyone involved
gave their services for free and the concert
raised over £340,000 for the Disasters
Emergency Committee.
Throughout the 18-month period, we also
staged 44 special events ranging from the
World Snooker Championships, comedy with
Eddie Izzard, teachings from His Holiness the
Dalai Lama and for the first time, Supercross a
spectacular motorcycle sporting event. The
market for children’s shows in particular is
growing and we staged live events for major
BBC programmes such as Thomas the Tank
Engine, Balamory and The Tweenies.
During the period we also completed £1.75
million improvements for the Hall 4 concert
facilities.
The seating configuration was
turned around 180∞ and in February 2004, we
opened a new dressing room block, complete
with production offices, green room and
purpose-built crew catering kitchen and dining
area. It also increased the capacity within the
hall to 10,103 seated and standing and 9,213
fully seated and enhanced the ambience of the
Arena by additional theatre lighting and
improved access to the auditorium.
Almost 15,000 delegates from all over the world attended
the ERS conference.
The corporate meeting sector also experienced
growth with a total of 43 meetings as opposed
to 23 in 2002/2003, which produced a very
healthy 27,020 delegate days.
Looking to the current financial year we can
anticipate
a
better
balance
between
international, national and corporate meetings.
Highlights include the European Congress of
Clinical Chemistry (3300 delegates) the World
Congress of Chemical Engineers (2000
delegates) and the return of the World Science
Fiction Convention (5000 delegates). Strong
booking activity to 2013 indicates that the SECC
continues to be a venue of choice for corporate
meetings as well as medical and scientific
associations.
Conferences
The conference sector performed very
satisfactorily during the period. A total of 91
conferences were staged over the 18-month
period generating 25% of both turnover and
gross profit. This was despite the fact that, due
to the cyclical nature of UK association
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Box Office
International and one off events like the Festival
of the Sea in Portsmouth. Major new contracts
include the Scottish Football Association and the
Aberdeen Exhibition and Conference Centre.
The SECC Box Office sells tickets for SECC
events as well as for other venues in the UK
through its SECxtra brand. It is now the fastest
growing sector of our business, accounting for
15% of turnover and 16% of gross profit in the
period under review compared with 10% and
11% in the previous 12 months.
Clarion Events (Scotland)
For Clarion Events (Scotland) (CESL), a joint
venture company, which was created with
London-based Clarion Events following a review
of our Organising Division, the last 18 months
have been challenging.
Since its launch almost four years ago, the Box
Office has surpassed business projections and in
the 18-month period, sold 1,293,920 tickets
equating to a gross ticket value of £29.5 million.
Of this total, 838,154 tickets were for SECC
hosted events and 455,766 were SECxtra sales.
Based on current trends, the Box Office is set to
exceed the business plan target of selling one
million tickets during the 2005/2006 financial
year.
Created to develop and cater for the Scottish
exhibition market, the company has established
itself but has also experienced difficulties, which
have presented a steep learning curve and led to
a period of consolidation and restructure.
However, the company continues to build on the
success of its two Scottish Weddings Shows, the
Irn Bru Christmas and New Year Carnival and
The Scottish Caravan & Leisure Show, which all
performed well during the period. In 2004, the
company also introduced The Baby Show
Scotland, a consumer exhibition providing a
range of products for expectant mothers and
new parents. It successfully completed its
second presentation in March 2005, attracting an
audience of almost 12,000 over its three open
days.
Naturally the buoyant Events sector has boosted
Box Office results and we are consistently selling
a higher percentage of ticket allocation for SECC
hosted events than we are contractually bound
to receive, despite increasing pressure from
promoters to allocate an increasing number of
tickets to other ticket agents working on behalf of
the promoter. Whilst there are many factors
contributing to this, one important reason is
loyalty from the general public to SECC Box
Office.
Looking to the future, CESL has now established
a firm foundation which will let it build on its
core activity by replicating its successful shows
at other venues in Scotland while continuing to
work on expanding the exhibition market by
introducing new shows at the SECC.
Recent research indicates that we are achieving
exceptionally high levels of customer
satisfaction, with 99% of ticket purchasers stating
that they were very satisfied/satisfied with the
service we provided. In particular, we achieved
very positive ratings (90%+) on the
friendliness, knowledge and patience of
the team.
Consistent with 2002/2003, SECxtra is a
driving forward growth in the Box Office
and with ticketing for events such as U2 at
Hampden Stadium and BBC Radio
Readings at Oran Mor, it now accounts for
40% of total tickets sales. Undoubtedly,
SECC Box Office has hit the national
ticketing market with greater force than
predicated and we are running national
booking lines for DC Entertainments’
national arena tours for Noddy, Tweenies
and Balamory, as well as London-based
exhibitions such as Country Living, Salon
The Scottish Wedding Show’s striking catwalk presentation is one of the
main highlights for visitors.
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