Shareholder Executive

Queen Elizabeth II Conference Centre

Purpose

The Queen Elizabeth II Conference Centre (QEIICC)'s role is to provide conference facilities for national and international meetings up to the highest level and to market its facilities commercially as a high quality venue for both Government and private sector use.

Legal Status and Ownership details

The QEIICC is an Executive Agency of the Department of Communities and Local Government (CLG), holding Trading Fund status since 1 April 1997. While the conference centre building is part of CLG's balance sheet, all other assets are held by the Trading Fund.

Government's Objectives

As set out in its Framework Document, the QEIICC is required to achieve best value for money in operating the conference centre as a high quality facility for commercial use by Government and private sector customers. Specifically, management are required to:

• further strengthen commercial performance by optimising use of the Centre
• maximise revenue
• maintain the interior of the building and services consistent with a high quality venue.

A formal review in 2001 concluded that the Agency should remain in the public sector.

Financial Performance

£m	2007	2006	2005
Turnover	10	11	10
Operating Profit	2	2	2
Profit/(Loss) for the year	2	2	2
Net Cash flow	1	1	1
Net Operating Assets	1	2	2
RONA1	164.0%	113.8%	133.6%
ROCE1	26.7%	36.1%	42.1%
Shareholders' Funds	7	6	5
Dividends	2	1	1

¹ Net assets figure does not include the value of the Conference Centre itself, which is incorporated directly into DCLG's accounts and does not sit on the Trading Fund's books.

Commentary

The conference centre had a successful year, hosting 380 conferences, including company AGMs (eg Barclays Bank plc, British Airways plc), Government conferences and international delegations from, amongst others, the United States, Europe, Russia, Africa and India. Strong competition made for a difficult trading environment in the first half of the year, but conditions in the second half were more buoyant. In addition, there was increased demand for the centre’s addedvalue offerings, including catering (supplied by a long-term partnership with Leith's) and production / technology services.

Overall revenue fell 4% to £10.4m from the record £10.8m achieved the year before, largely due to a 6% reduction in room hires compared with the previous 12 months. The strong 2005-06 performance had been driven predominantly by the level of conferences associated with the UK's EU presidency. Operating costs were flat, resulting in a 19% fall in operating profit to £1.75m. Despite this, strong cashflow performance enabled QEIICC to increase dividend by 7% to £1.55m, ahead of the Department’s £1.5m target.

Looking forward, the centre intends to maintain its reputation as an internationally recognised location for major conferences, banquets and award ceremonies via a programme of capital investment aimed at increasing capacity, improving facilities and expanding audio-visual and technological support. In addition, the QEIICC intends continuing its high level of marketing activity to bring in more national and international conferences, and grow occupancy from 70% to 80%.

Since the end of the financial year, John French has replaced Robert Jackson, who has retired as Finance Director.