The company behind Perthshire music festival T in the Park will redouble efforts to control costs after reporting a fall in profits for the second successive year.
DF Concerts, which celebrated two decades of Scotland’s biggest and best-known music event earlier this year, said live music fans had more options than ever before amid an explosion in the number of summer festivals.
The promoter’s caution came as DF revealed how earnings before tax slumped 5% to £4.53 million during 2013, down from £4.76m a year earlier.
The figure was quarter of a million pounds below the 2011 outturn of £5.20m, and significantly down on 2009’s £6.03m pre-tax result.
The Dundee-registered firm faces opposition to its plan to move Scotland’s premier live music festival from its former home near Kinross to a new site at Strathallan Castle.
The switch came after the Health and Safety Executive ramped up its concerns over the Forties oil pipeline which runs below the Balado venue.
But a legal challenge has been launched, while the organisers must also secure a full planning permission if their bid is to be successful.
Fears have already been raised over the implications for wildlife and the impact of festival traffic on narrow country roads.
A deal to keep the festival in Perthshire had been hailed by organisers earlier this summer, amid claims that the event contributes around £7m to the region’s economy each year.
DF Concerts’ overall turnover rose 38.5% to £45.5m last year, newly-lodged accounts have shown, but costs increased by a similar sum to leave the margin on sales depressed.
“Competitive pressure has increased in the marketplace and margins remain under pressure,” director Geoff Ellis said in the company’s strategic report, filed alongside accounts at Companies House at the weekend.
“The directors seek to control overhead costs in order to maintain the profitability of the company.”
Its board also said it considered that DF and its individual event subsidiaries were “well placed to take advantage of opportunities” which could arise during the present year.
A spokeswoman for DF Concerts said income swelled during 2013 following a “significant rise in the opportunity to put on large outdoor shows, such as the Stone Roses, Robbie Williams and our first year of the Glasgow Summer Sessions gigs in Bellahouston Park”.
She said that such big events required increased outlay, particularly in their first year, but had break-even points which required “tens of thousands” of ticket sales.
“It’s also been our policy throughout the history of the company to invest in talent, therefore profitability isn’t always the deciding factor in choosing to promote artists,” she added.
“We were happy with our performance in 2013 and feel confident moving forward; 2014 so far has been an excellent year. T in the Park sold out, Summer Sessions returned, and we are honoured to be hosting other prestigious events such as the Ryder Cup Gala Concert.”
DF paid dividends totalling £3.35m to parent company LN-Gaiety Holdings during the year to the end of December, though DF’s ultimate parent is Live Nation Entertainment Inc, based in Beverly Hills, California.
London-registered LN-Gaiety used its group accounts to reveal an 18% hike in turnover to £142.7m, though pre-tax profits fell to just above £1m as the number of live music shows it promoted fell 8% to 3,552 and the number of admissions to those events slipped 2% to 4.47 million.
The wider Live Nation group, which is listed on the New York Stock Exchange, has interests in a host of festivals, events and live music venues, as well as ticket retailer Ticketmaster.