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Merlin profits edge up after Alton Towers rollercoaster accident

Published 25/02/2016

Alton Towers saw a
Alton Towers saw a "significant" fall in visitor numbers after the accident on its Smiler ride on June 2

Alton Towers owner Merlin Entertainments has seen its annual profits edge up after last summer's rollercoaster accident which left five people seriously injured.

The group - which also owns attractions such as Legoland, Madame Tussauds and the London Eye - said it overcame a fall in revenues at its theme parks to post a pre-tax profit rise of 0.3% to £250 million in the year to December 26 compared with a year ago.

It said Alton Towers had a "significant" fall in visitor numbers after the accident on its Smiler ride on June 2, which resulted in the 500-acre theme park in Staffordshire being shut down for four days.

Chief executive Nick Varney said: "Despite a challenging year, the business delivered a robust performance in 2015.

"However, 2015 was a difficult year for Merlin following the accident at Alton Towers early in the summer season. The safety of our guests and employees must always come first and we have sought to learn every possible lesson to help ensure there is no repeat of what happened on 2 June."

Merlin, which runs 110 attractions in 23 countries, said sales at its theme park business tumbled 12.4% to £285 million as the division was "dominated by the impact of the incident at Alton Towers", which came during the peak summer season.

But it added strong performances from its Legoland parks, and venues such as Madame Tussauds and the London Dungeon - which it calls its midway attractions - boosted growth in the firm.

Merlin said in November that the crash of its Smiler ride at Alton Towers in June was cause by human error as staff misunderstood a shutdown message and wrongly restarted the rollercoaster.

The group said it is putting in place a range of measures to guard against an accident like this happening again, such as installing new compliance managers at all its theme parks and forming a new group engineering unit.

The business also set out new plans for growth as it looks to "quicken the pace of expansion" principally across the US, China, Japan and South Korea.

It said that by 2020 it plans to add 44 new attractions, including four Legoland parks, and add another 2,000 rooms to its hotels. The business currently runs 12 hotels and four holiday villages.

Merlin also announced it was taking around a 15% stake in city centre tour guide operation Big Bus Tours for 34.4 million US dollars (£24.7 million).

Big Bus Tours runs almost 400 open-top sightseeing buses in 17 major cities such as London, Hong Kong and Chicago.

Merlin said the deal will provide opportunities for cross-selling, promotions and joint sales and marketing activity.

Mr Varney said: "This investment will facilitate a closer working relationship on the ground while enabling us to learn about a highly complementary business."

Shares in Merlin lifted more than 2% in early trading.

Analysts at Shore Capital said: "We are firm believers in the potential for this business to deliver considerable upside over the longer term."

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