M&S Bank Arena and Exhibition Centre Liverpool operator ACC Liverpool reveals annual losses of more than £4.3m and warns of the impact of soaring energy costs. Tony McDonough reports
ACC Liverpool faces another tough financial year due to the high cost of energy as it reports annual pre-tax losses of more than £4.3m.
In its latest accounts posted on Companies Hiuse, covering the year to March 31, 2022, ACC Liverpool reported revenues of just under £18.5m. This was significantly better than the £4.8m reported for the 12 months to March 2021.
That period covered the height of the COVID-19 pandemic which saw the M&S Bank Arena, Exhibition Centre Liverpool and Pullman Hotel closed for long periods. It also owns TicketQuarter, a regional ticketing agency.
It wasn’t until September 2021, halfway through the period covered by these latest results, that the events industry started to get properly back up and running.
In the months after these results, ACC Liverpool delivered a number of successful events including the Labour Party conference, which is due to return in 2023, and World Artistic Gymnastics Championships. Late last year it was also announced it would host Eurovision 2023 in May.
These events generate significant revenues not just for the business itself but for the wider LIverpool city centre visitor economy.
However, while its events calendar is now looking much healthier, the business still faces significant challenges over the next year or so. The number of people employed by ACC Liverpool fell from 222 to 186.
In the reports its directors said: “Economically, the aftershocks of the pandemic, soaring inflation, supply-side challenges and the threat of recession means that the operating environment will remain extremely tough through to the end of 2024.”
In particular, the report highlighted the challenges of meeting the energy costs that come with operating such large space. ACC Liverpool had “limited” hedging on its energy deal only until autumn 2022.
It added: “With an events diary sold highly forward in advance (we) cannot respond with complete agility to market price risk.
“Rather than anticipate slowdown, our immediate objective is to deliver the busy programme of events scheduled across a new financial year and beyond.
“This may mean that some of our future financial performance expectation will be lower than initially envisaged compared to the high optimism following lifting of restrictions.
“The impact of energy will be particularly detrimental to future results through the end of 2024.”
In order to mitigate some of the energy costs, and with a view to pushing forward its net zero carbon emissions, ACC Liverpool is looking to install LED lighting across its estate early in 2023.
It is also joining the rest of the industry in urging the Government to extend energy bill support for businesses beyond the current support scheme which ends in March.
It is now in the midst of a new three-year business plan. This will see an investment of £5m across its campus to upgrade facilities between 2022 and 2024. Its aim is to ensure the venues “maintain their competitive advantage”.
Auditors are satisfied the group is able to continue to operate as a “going concern”, despite its reserves being in deficit to the tune of almost £18m. However, ACC Liverpool says it “remains reliant” on the financial support of its owner, Liverpool City Council.
Click here to read the full ACC Liverpool accounts on Companies House
Directors added: “Liverpool City Council remains committed to extending this financial support as the group continues to monitor immediate trading risks.”
It was reported in December that ACC Liverpool could be sold by the council, which is facing its own financial problems, during the 2023/24 financial year.
The business is one of four council-owned companies that are now subject to review which follows the Max Caller Best Value inspection report of Liverpool City Council published in March 2021.