Merlin Entertainments, the international attractions operator, has reported growing revenue for the 40 weeks ending October 7.
The company saw revenue growth of 12.4 per cent, which was reportedly driven by new business development that included the successful opening of Legoland Japan and five new Midway attractions. Two new IP deals were also made, namely The Bear Grylls Adventure and a partnership with Entertainment One to develop location-based entertainment based on Peppa Pig.
Nick Varney, Merlin Entertainments chief executive officer, said: "Merlin has delivered another period of good total revenue growth reflecting the contribution from new business development as well as more favourable currency movements, with over 70 per cent of profits being derived from outside the UK. Another busy year has seen us open five new Midway attractions, nearly 400 accommodation rooms across four of our theme parks and a new Legoland park in Japan. The exciting new partnerships with eOne and Bear Grylls, as well as the planned opening of Legoland New York in 2020, show there is plenty more magic to come.
“In the Existing Estate, trading to date has been more mixed. After strong early-season momentum across most of our businesses, we have experienced difficult trading over the summer period as the spate of terror attacks witnessed in the UK marked an inflection point in Midway London and UK theme park trading. Poor weather in Northern Europe and extreme weather in Italy and Florida also impacted peak season trading.
“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 currently at record levels of intensity in Europe. We also continue to face significant cost pressures, largely brought about by employment legislation, particularly in the UK.
“Going forward, therefore, we will be reallocating capital to adjust to the current environment and to maintain our capital discipline. Over the period of 2018-21, we will reduce existing estate capital expenditure by approximately £100m, reallocating this into accelerating our highly successful accommodation roll-out programme, as well as increasing our investment in our productivity agenda. As a result, we expect a stronger contribution from new business development to offset an assumption of low single-digit like for like growth, based upon similar aggregate levels of capital investment.”
