Six month figures show Merlin divisions returning to growth

Theme park operator Merlin Entertainments has announced half-yearly results up to the end of June 2019, showing a return to growth for its Midway Attractions and Resort Theme Parks divisions, and revenue growth of 6.5 per cent compared to the first half of 2018 across the company.

Underlying profits were down compared to the first six months of 2018, however, with an operating profit of £79m (US$95.57m, €86.57m) and profit before tax of £34m (US$41.13m, €37.25m) – a decrease of 10.8 and 21.6 per cent respectively. 

Visitor numbers are up by 3 per cent to 30.8 million over the period, with Midway, which includes attractions such as Madame Tussauds, Sea Life and The Eye, growing its revenue by 8.1 per cent, while Resort Theme Parks, whose six parks include Alton Towers, Thorpe Park, Gardaland in Italy and Heide Park (Germany), saw organic revenue grow by 4.1 per cent (an operating loss of £9m (US$10.89m, €9.86m)).

Accommodation revenue grew by 14.5 per cent and now represents 24 per cent of theme park revenue.

Merlin has been busy opening and improving attractions during the period, and has been pursuing a policy of transforming theme parks into destination resorts, leading to 372 new accommodation rooms being built at Legoland Billund Resort, Gardaland Resort and Alton Towers.

Another policy is its Productivity Agenda, through which it hopes to save £35m (US$42.34m, €38.36m) in efficiencies by 2022, mostly through lean practices and rationalised central functions.

Merlin is pushing ahead with plans to open Legoland New York in 2020, though it said the timetable and costs were under pressure, “given the scale and complexity of the project”. Construction contracts for the proposed new Legoland park in South Korea have also been awarded, and the park is scheduled to open in 2022.

Merlin proposed to issue no dividends on shares for the period, citing its announcement on 28 June in respect of a “recommended” cash offer for the organisation, made by Berkeley Bidco Limited, a newly-formed joint venture between shareholder and Lego brand owner Kirkbi and Blackstone Core Equity Partners (with CPPIB as a co-investor), which between them controlled Merlin for eight years before its 2013 public listing. 

Chief executive officer Nick Varney said the performance was broadly in line with expectations, adding: “With eight new Midway attractions opened in the period, 372 new accommodation rooms, and the ongoing development of new Legoland parks, we continue to build on our position as a unique, multi-format international operator of strongly branded and IP-led location-based entertainment.”