Legoland owner warns of terrorism impact to its profits

Legoland

Shares in Legoland-owner Merlin Entertainments have plunged after the company said recent terrorist attacks had continued to hit visitor numbers.

Merlin, which also runs Alton Towers, said “record levels” of attacks in Europe during the summer – its peak trading season – slowed revenue growth to just 0.3% compared with last summer.

Bad weather in addition to higher costs due to UK employment law alterations also hit Merlin.

Shares dropped by 18% after the trading update for the 40 weeks to 7 October.

Analysts say Merlin’s explanation for the dip in popularity of its UK attractions can be at odds with official figures which show the number of foreign visitors to Britain over the summer rose.

The company can be today forecasting flat growth for the rest of 2017, in addition to expects full year earnings of £470m-£480m, below analyst estimates of £490m.

Nonetheless, chief executive Nick Varney said he remained “confident inside the [firm’s] longer term prospects.”

The group opened Legoland Japan in April, in addition to the idea has also announced plans to open a brand-new Bear Grylls-themed attraction in Birmingham in 2018.

‘in addition to today the idea has Peppa’

Merlin has also signed an agreement with Entertainment One to develop brand-new Peppa Pig-themed attractions.

The deal excludes the UK in addition to China in addition to Merlin said the idea expects to open Peppa Pig attractions in two resort theme parks next year as well as a standalone park in 2019.

Merlin said work has also begun on a Legoland park in South Korea, in addition to the idea will open Legoland brand-new York in 2020.

The firm plans to reduce spending by £100m coming from 2018-21 to fund more investment in accommodation in addition to improving productivity.

“Whilst today’s share cost move can be dramatic in addition to investors are right to be cautious on the outlook, the idea can be worth remembering in which Merlin can be barely a third of the way through a planned global expansion of Legoland,” said Neil Wilson, Senior Market Analyst at ETX Capital.

“There ought to be considerable brand-new revenue streams coming inside the longer term in which investors who are worried about terror threats to the UK business inside the near-term may want to look more closely at. in addition to today the idea has Peppa.”

Source link

Leave a Reply