SECC AHEAD OF EXPECTATIONS AS IT LOOKS FORWARD TO THE HYDRO

The Scottish Exhibition + Conference Centre (SECC) today announced its financial results for 2011/12. During that period it reported a trading profit of £0.4m, £0.2m ahead of expectations with EBITDA of £1.9m, in line with the previous year. It also delivered car park development gains in excess of £6.0m and made early provision for an impairment charge in respect of the Hydro of £36.1m to be matched with future development receipts.

The news has been welcomed by the company which reported that despite a difficult economic climate all sectors of its business have performed in line with expectations.

Speaking at the announcement, John Sharkey, Chief Executive, SECC said:
“These are encouraging results when you consider the fine balancing act of running a trading business whilst building a new arena. The main item which has affected the company’s results this year is the impairment charge recognised at this time in relation to the Hydro project.
“When originally conceived in 2002, the SECC expected to incur an Arena impairment charge which would be covered by the development gains arising from the connected West development site, given that the 20 acre land value is carried on our balance sheet at £200. The QD2 project comprising The Hydro, a car park, a heliport relocation and the mixed residential west development site are interconnected in that the car park and heliport relocation is needed to release development land and the development is needed to fund The Hydro which could not be delivered in the absence of a sufficiently coordinated campus plan.
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“I am pleased to report that our original impairment estimation has been significantly reduced and this is largely as a result of better than anticipated business plan projections for The Hydro.”
“This year, due to a previous scheme for the site not materialising, the SECC became a commercial developer in relation to the disposal and construction contract for a new 1600 space car park. We secured an operator, contractor and forward sold the development retaining a management interest in the contract. Once completed in 2012, it will contribute over £7.0m to the SECC in terms of profit with £6.0m included in the results for the year, and more importantly a funding receipt for the QD2 project.
The SECC also reported that the forward outlook for the business is extremely promising. Funding for the 12,000 capacity Hydro arena is now fully secured and delivery is scheduled for a September 2013 opening. The business also reported that it has been successful in attracting key commercial sponsorships for the Hydro in excess of eight times its originaltarget for the project. Partnerships have been finalised with major companies such as its naming rights sponsors SSE (Scottish Hydro) and soft drinks company Coca Cola with a significant number of other sector deals agreed and in thecourse of contract completion.
Sharkey continued:
“We have a healthy calendar of dates held for Hydro concert and events which will be announced over the coming months. Further ahead, the sporting legacy of theCommonwealth Games in which The Hydro will play a significant role will continue when the Arena hosts the World Gymnastic Championships in 2015 as well as being a venue for the 2018 Youth Olympics Games bid..
“Forward bookings in our key conference sector are healthy and business opportunities from the enhanced capacity in our existing SECC halls look set to be captured.”
Ends

For further information please contact:
Kirsten McAlonan, Corporate Communications Manager SECC Tel 0141 275 6215 – www.thehydro.com