BRDC pleased with financial results
13 June 2011
The British Racing Drivers' Club has reported continuing business growth for the past year, despite the cost of redeveloping Silverstone in line with the wishes of F1's powers that be.
For the year ending 31 December 2010, the company's results showed an increase in turnover as Silverstone, its primary asset, succeeded in diversifying beyond motorsport interests. The figures include the income and revenue from Silverstone's property, corporate and retail interests, as well as those generated from the circuit's major events, including the F1 and MotoGP British grands prix.
The business continued to grow through 2010, with turnover of £48,580,000 showing an increase of 23 per cent over 2009 levels. The net loss before tax reached £1.9m in 2010, versus a profit of £1.3m a year earlier, therefore down £3.2m on 2009 results. Of this, gross profits were £1.4m lower at £12.8m, but this was attributed solely to the combination of a shorter F1 sales cycle - with tickets on sale for only seven months rather than twelve - and an increase in costs associated with the new F1 fee structure.
From an overhead perspective, costs increased by £1.5m, with depreciation accounting for £1m of the increases, in line with the significant venue investments made in the year. The balance of £0.5m mainly related to increased staff costs, as Silverstone strengthens its management team in line with the continued growth of the business. Interest costs also rose by £0.3m in the year, due to the new loan facility requirements aligned to the site investment programme.
“The headline is an operating profit of £1.6m and a net loss after tax of just over £1m, but we are very pleased and encouraged by these results," BRDC chairman Stuart Rolt insisted,"It is important that people are aware of the underlying success and growth of the business.
“In the last two years, more than £40m has been invested to improve the circuit and the venue's facilities, in particular the new Silverstone Wing complex, which was officially launched in May 2011. While this investment has significantly increased relative depreciation and interest costs in the short term, it has provided the platform for Silverstone to significantly grow its circuit-related business in the long term which, in turn, will result in future profit growth.
“This investment has secured Silverstone's long-term future. With a 17-year F1 contract and a five-year MotoGP contract, Silverstone is now uniquely positioned as one of the leading two- and four-wheel motorsport destinations in the world. I would like to thank the Silverstone Holdings Limited team, led by Neil England and Richard Phillips for their excellent work.”
England, Rolt's counterpart at Silverstone Holdings Limited, confirmed that the figures were encouraging, and revealed that plans were in the pipeline to further increase the venue's potential.
“Given the substantial investment in Silverstone over the past two years, we are very happy with our latest figures," he noted, "We have made considerable progress in diversifying the business into a successful multi-purpose venue, making us less dependent on revenues and profits generated from our major events, including the F1 grand prix. The majority of our profits now increasingly come from other core areas of the business and low risk channels.
“We remain very focused on broadening the appeal of Silverstone and attracting a broader number of clients to the site. To accomplish this, we are seeking to attract a property investment partner to fulfil the significant potential of our 760 acre estate. Outline planning consent, which will include a multitude of further exciting new facilities, will be submitted to local planning authorities shortly. This will enable Silverstone to take the next crucial step towards becoming a leading global motorsport and leisure destination.”
The redevelopment of Silverstone's layout, as well as its off-track facilities, have both played a part in the success of the past year, according to Silverstone Holdings MD
“Our latest financial results show a year on year revenue increase of £9.2m, of which £3.8m related to major events," he explained, "The remaining £5.4m increase was attributed to growth across the core business – hosting corporate, conference and retail activities, for a broad range of clients and customers.
"This has been greatly assisted by the improved track facilities at Stowe. The new Stowe Complex and revised circuit layout have provided additional track hire opportunities, for both two- and four- wheel activities, across all business channels.
“Additionally, the group has continued, and will continue to develop and invest in its property portfolio, increasing the number of facilities available for tenant occupation. The business is currently investing significantly in its future use and expansion. Accordingly, the 2010 financial results contained some exceptional preparatory and planning related costs. The underlying rental income and core costs remain strong and in line with expectations.
“Our costs are well controlled and overheads remain in line with revenue levels. There is strong demand for our leisure and racing offers, and the careful management of our product mix continues to underpin the Group's performance.
“Silverstone is now one of the premier motorsport venues in the world, run by one of the most experienced teams in the business. We believe that the returns from continuing investment will result in a strong upturn in profitability in future years, and plan to further increase profitability through a combination of continued diversification of income streams and by continuing to improve control over costs.”