Economy

Madame Tussauds-owner Merlin blames attacks for dip in summer trade

Madame Tussauds-owner Merlin blames attacks for dip in summer trade”

Shares in Merlin were down 18% at 367.20 pence Tuesday, by far the worst performer in the FTSE 100.

Merlin, which also runs the London Eye, Legoland and theme parks such as Alton Towers in Britain, said that trading in recent weeks had remained mixed and group like-for-like revenue growth for 2017 was now expected to be "approximately flat" on 2016. Midway attractions are indoor attractions located in city centres and resorts.

However, revenue was flat on a like-for-like basis, mainly reflecting hard summer trading at its Midway London attractions and European theme parks.

The stock fell up to 21 percent after Merlin forecast core earnings for 2017 in the range of 470 million pounds to 480 million pounds ($622-$636 million).

"The spate of terror attacks witnessed in the United Kingdom marked an inflection point in Midway London and United Kingdom theme park trading", said Chief Executive Nick Varney. Poor weather in Northern Europe and extreme weather in Italy and Florida also impacted peak season trading. Overall sales rose by 12.4% as Legoland Japan and five new Midway attractions came on stream. One partnership in conjunction with survival expert Bear Grylls that will see for the opening of an attraction in Birmingham in 2018, and the other with Entertainment One to open Peppa Pig-themed attractions outside the United Kingdom.

Merlin Entertainments has revealed plans to develop new attractions in partnership with Bear Grylls and under the Peppa Pig brand.

In a separate statement Entertainment One said the agreement gives Merlin exclusive rights to roll out new attraction formats and themed accommodation featuring Peppa Pig.

The deal excludes the United Kingdom but gives Merlin exclusivity in all territories other than China.

"Despite the diversity of our business - by geography, brand and visitor mix - our markets continue to be impacted by certain external shocks, not least terrorism which is now at record levels of intensity in Europe". Merlin also noted that employment legislation created some cost pressures.

"Varney said Merlin plans to "'adjust the tiller' given the hard market conditions".

Neil Wilson, a senior market analyst at ETX Capital, said in an email: "Merlin reports "unprecedented levels of demand volatility" as tourists shunned busy London attractions".



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