Alton Towers park crash to haunt Merlin Entertainments

Merlin Entertainments said it might be another two years before visitor numbers at its Alton Towers theme park recover to previous levels following a roller coaster crash in June which hit summer trade and took a chunk out of profits.

The steep drop came as regulars and potential first-time visitors stayed away from Staffordshire-based Alton Towers, one of Britain’s biggest theme parks, after the roller coaster accident seriously injured four teenagers and led to two having leg amputations.

Merlin, the world’s second biggest visitor attractions group behind Walt Disney, yesterday said sales at its theme parks division fell 11.4% in the 36 weeks to September 5.

The company reiterated a July warning that group profit would fall below forecasts to the £249m (€340.2m) reported in 2014.

“In the past in America, where there have been accidents occasionally, it’s been anything from six to 18 months recovery time,” Merlin chief executive Nick Varney said.

“I am not sure how long it will be before that [safety concerns] dissipates and people feel confident again. Our view is that resort theme parks, Alton Towers, will come back but I don’t think you’ll see a full bounce back in 2016.”

The operator of attractions such as Madame Tussauds, Sea Life Centres, and London Eye said that 2015 core earnings at its theme parks business would now be at the lower end of a guided range of £40m to £50m, versus £87m last year.

Mr Varney said while demand in 2016 was difficult to gauge, the business’ financial performance would be helped by a more cautious cost approach and park re-launches and new products.

Shares in the firm fell 1.1% at one stage yesterday, but are up 11% on a year ago, reflecting strong trade elsewhere in the group and clear expansion plans.

“With more [openings] in the pipeline and the clouds of the tragedy likely to lift over time, the general view of the company’s prospects remain buoyant, with the market consensus coming in at a strong buy,” said Richard Hunter, head of equities at Hargreaves Lansdown.

Merlin said total group like-for-like sales for the 36 week period were up 0.3%, slowing from growth of 2.8% at the half year, as strong Legoland demand in North America and Germany just offset the slowdown at its British theme parks.

A weak euro also hit visitor numbers at London attractions.

Including new openings, group revenue was up 3.8%.

Mr Varney said that Alton Towers wanted to reopen the ‘Smiler’ ride involved in the crash, but that investigations into the accident were ongoing.


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