The Scottish Exhibition and Conference Centre (SECC), Glasgow has announced its financial results for 2011/12, reporting a trading profit of £0.4m, £0.2m ahead of expectations, in line with the previous year.
The SECC also delivered car park development gains in excess of £0.6m and made early provision for an impairment charge in respect of The Hydro of £36.1m to be matched with future development receipts.
“These are encouraging results when you consider the fine balancing act of running a trading business while building a new arena,” says Chief Executive of the SECC John Sharkey. “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 Q20 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.
“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 the SECC became a commercial developer in relation to the disposal and construction contract for a new 1,600 space car park. We secured an operator, contractor and forward sold the development retaining a management interest in the contract. One completed in 2012, it will contribute over £7m to the SECC in terms of profit,” adds Sharkey.
Funding for the 12,000 capacity Hydro arena has been fully secured and it is scheduled to open in September 2013. The business also reported that it has been successful in attracting commercial sponsorships for the Hydro in excess of eight times its original target for the project. Partnerships have been finalised with companies such as its naming rights sponsors Scottish Hydro and Coca Cola.
“We have a healthy calendar of dates for Hydro concert and events,” adds Sharkey. “Further ahead, the sporting legacy of the Commonwealth 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.”
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