Alton Towers owner Merlin Entertainments (MERL) continues to struggle amid terrorism fears which have impacted footfall at its domestic theme parks.
Poole-headquartered Merlin operates a range of popular attractions and theme parks, including Legoland, Sea Life, Madame Tussauds and Thorpe Park.
DEMAND SOFTENS
Following the Westminster attack in March, the theme park operator reported a ‘softer domestic, day-trip market’.
Further attacks in Manchester and London over the past month further hit domestic demand and ‘adversely affected’ several parks amidst tighter security measures.
Unsurprisingly, the theme park operator is ‘cautious on trends in foreign visitation’ as the peak summer trading period gets underway. The news has evidently unnerved investors with the shares marked down 8.3p to 494.7p.
In a spot of good news, Merlin’s Midway London division benefitted from the weaker pound earlier this year, the devaluation of sterling increasing tourists’ purchasing power.
Panmure Gordon analyst Mark Irvine-Fortescue is confident in Merlin’s outlook, despite the lack of clarity concerning the impact of the recent terror attacks.
‘In an environment of shaky domestic consumer sentiment, widespread geopolitical unrest, emerging cost inflation and volatile FX, Merlin’s diverse portfolio of brands offers resilient growth’ comments Irvine-Fortescue.
The analyst highlights that 70% of the company’s profit is generated away from UK shores and Merlin is making good progress with milestones for growth.
So far in 2017, 250 new rooms have been opened in Legoland Florida and the original Legoland park Billund (Denmark) with more openings expected throughout the year.
