Friday, June 5, 2015

News: Magna submits business plan

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External consultants are to examine a business plan from the operators of Magna Science Adventure Centre in Rotherham to give Rotherham Council assurances over providing further financial support.

Set in the former Templeborough steelworks, Magna is a family attraction with more than 100 hands-on exhibits. Millions of pounds have been invested in conference facilities at the centre which is operated by a charity, the Magna Trust.

In January, Rotherham Council's interim chief executive approved an immediate £100,000 loan after the Magna Trust identified a potential cash shortfall. The council's cabinet were also recently asked to approve a new loan facility of up to £250,000 to start on April 1 2015, taking the total available for the year to £350,000.

That decision was deferred pending an independent consultant being appointed to undertake a review of Magna's business, to help to strengthen the Magna business plan and to assess the future viability of Magna and to give some assurances moving forward.

Professional services network, PwC has been appointed by the council to undertake a review of Magna's five year plan at a cost of £12,000. Terms of reference are being agreed but issues to be examined by the independent consultants include the Magna Centre's current trading levels, the leisure and other events scheduled to take place at the centre, as well as the method of structuring the company in the future.

The possible development of a hotel and restaurant is being considered as one means of trying to attract more investors to the business.

The business plan was submitted in April and PwC are set to report back its findings in July. The Government-appointed Commissioners to the Council will be asked to make a decision on any loans being made available.

Cllr Chris Read, leader of Rotherham Council, gave an update at the recent full council meeting and said: "What we can't do is let Magna limp from loan to loan."

The sheer cost of operating a science adventure centre in a massive former steelworks (it costs an estimated £800 a day just to open), means that the trust makes enough money to operate but not enough to build up reserves of capital. When incidents such as wind causing substantial damage to the roof, or a fire in adjacent premises, causes events and parties to be cancelled, Magna has been able to call on the Council's ability to borrow money at low rates to cover costs and repay the loan over time.

In 2006, Rotherham Council provided a £300,000, 15-year long term loan, with £195,000 currently outstanding but a "payment holiday" has been in place since 2013.

In 2008, during the recession, the Council provided Magna with an unsecured one year working capital facility. This is reviewed annually by the Council's cabinet and a sum of £250,000 was agreed in March 2014. An additional unsecured £80,000 bridging loan facility was agreed in January 2014 which has not yet been repaid. The existing £250,000 council loan was set to be repaid, with outstanding interest of £6,250, on March 31 2015.

It is believed that were it not for the Council's financial support then Magna would have been forced to close.
One way that Magna is boosting revenues is to continue its strong position in the corporate sector. Bookings secured in the last financial year enabled Magna to achieve a £1m turnover.

Events include more dance music events, film and comic conventions, mixed martial arts events, boxing events screened live on TV, the Real Ale and Music Festival and the Red Bull Stratos - Mission To The Edge of Space exhibition. In November, Magna is due to host an international aerospace conference, TRAM 2015, bringing 400 attendees from the across the global aerospace sector.

To help keep up with demand, Magna has recently appointed Lee Wilkinson, who previously worked for Sheffield Wednesday Football Club and Barnsley and Rotherham Chamber of Commerce, as a new corporate sales executive. Lee will also help bring in more sporting events, such as boxing. The venue can now cater for bigger audiences for such events due to alterations to seating in the Big Hall.

Magna website

Images: Magna

1 comments:

Owen Gleadall June 8, 2015 at 10:21 AM  

What is Magna? Is it a visitor attraction or is it an events venue? It seems to me that it can't really decide one way or the other! Get the visitor attraction working again and the visitor numbers increasing, in line with other venues in the area, and then use the venue to create additional income to provide the level of surplus required to make it a viable business.

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