17th September 2015
As Alton Towers owner Merlin Entertainments updates the market with its latest trading numbers, Helal Miah, investment research analyst at The Share Centre, looks at what it means for investors…
Merlin has said on Thursday that trading for the 36 weeks to 5 September has been in-line with revised expectations.
Group revenues grew by 2.2% and just 0.3% on a like-for-like basis.
The Legoland theme parks did exceptionally well, as did the Asian focused Midway Attractions division. In contrast, the resort theme parks saw revenues fall by 13.2%.
This is as a result of the Alton Towers rollercoaster accident. Visitation numbers fell significantly and the effects lasted into the peak summer months.
It is worth noting that the strength of sterling versus the euro did not help the translated earnings either. As a result of the accident, the company now expects full year EBITDA (earnings before interest, tax, depreciation and amortization) to be in the lower end of the previous guidance of £40 to £50m.
While the Asian and Legoland parts of the business are expected to do well, we continue with our medium risk ‘hold’ recommendation for investors. This is due to confidence amongst visitors continuing to remain low in the UK and this will more than likely continue into 2016.