Earls Court & Olympia exhibition centre owner Capital and Counties Properties (CapCo) has seen 2010 profits crash 39 per cent, due to the weak economic recovery’s impact on its London exhibition centres.
CapCo’s adjusted earnings for 2010, before asset revaluations and several other items, fell from £15.2m (2.4 pence per share) to £9.2m (1.5 pence a share) year-on-year. A spokesman for the property company, created by last year’s breakup of Liberty International, said it generated half its rental income from exhibitions and conference business by leasing space at the Olympia and Earls Court centres in west London, as well as The Brewery in London’s financial district.
However, demand from exhibitors at the three venues fell last year, causing net rental income for the unit to decline by more than 20 per cent. The company said in a statement that it was a "good performance in a weak macroeconomic environment".
Turnover for EC&O Venues was £50.7m (down 9.3 per cent) and EBITDA was £18.9m (down 11 per cent) for the year, which comprises net rental income of £22.6m, less related administration expenses of £3.7m.
CapCo’s performance means it missed the 1.9 pence a share estimate of 13 analysts compiled by financial services and news company, Bloomberg. Its net asset value rose from 127 pence to 148 pence year-on-year and its share price rose 1.4 pence to 150.2 pence this morning, valuing the company at £928m.
CapCo CEO Ian Hawksworth said in a conference call that the UK’s 18-month recession deterred exhibitors from leasing space in the first half of 2010. However, he was upbeat about the centres’ relative performance, commenting that the exhibitions business is currently “performing very well” and is “ahead of plan”, although he conceded net rental income would remain “choppy”.
CapCo is seeking approval and finance to redevelop the Earls Court and Olympia exhibition centres and surrounding area into a mix of housing, shops and offices.
The company confirmed last month that it was in talks with the Kwok family, owner of Hong Kong’s largest listed property developer Sun Hung Kai Properties, about its redevelopment plans for the site.
The Kwok family confirmed last week that it was in preliminary talks with CapCo to take a stake in the venture.
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