Belfast Telegraph

UK Website Of The Year

Home News UK

Rollercoaster accident hits Alton Towers visitor numbers, says owner Merlin

Published 17/09/2015

Alton Towers owner Merlin Entertainments has warned that annual theme park earnings would be lower than expected
Alton Towers owner Merlin Entertainments has warned that annual theme park earnings would be lower than expected

Alton Towers owner Merlin Entertainments has revealed the impact of its major rollercoaster accident earlier this year as it said visitor numbers plunged at the theme park over the peak summer season.

Merlin saw like-for-live revenues tumble by 11.4% across its theme park division over the first nine months of its financial year after seeing "significantly" lower numbers of visitors to Alton Towers, while other UK attractions in the unit, such as Thorpe Park, were also hit.

It warned that annual theme park earnings would be at the lower end of expectations and would probably continue to be impacted over 2016 in the aftermath of the accident.

Five people were seriously injured in the crash on June 2 on The Smiler ride, which resulted in the 500-acre theme park in Staffordshire being shut down for four days.

Merlin also suspended UK theme park marketing and temporarily closed rides at two other sites.

The group said in its latest trading update that poor weather throughout August also kept visitors away from its theme parks, while the strong pound against the euro impacted demand from European holidaymakers for its London tourist attractions, which include Madame Tussauds and the London Eye.

But the popularity of its Legoland resorts helped shore up wider group trading, with overall like-for-like sales edging 0.3% higher in the 36 weeks to September 5.

Merlin has already warned over profits in the theme park business, saying in July that earnings would be between £40 million to £50 million, down from £87 million in 2014.

It now believes earnings will come in at the lower end of the range.

"Although difficult to assess at this stage, we continue to believe that there may be an ongoing adverse impact on the resort theme parks operating group profitability in 2016," the group added.

It is still expecting the wider group to see profit before tax ''broadly in line'' with last year at £249 million this year after savings in financing and other costs.

Chief executive Nick Varney said in July he was ''deeply sorry'' over the Alton Towers crash, which he described as a ''devastating event''.

He said the firm would continue to do what it could to support those who were injured and their families.

Shares fell more than 1% after the summer trading update.

Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said: " The aftermath of the Alton Towers tragedy is still being felt in terms of a reduction in visitor numbers, with the possibility that this may yet follow through to next season."

But he added Merlin was "far from being a one-trick pony", which has helped its share price remain relatively firm despite the theme park hit.

He said: "The Legoland parks continue to grow apace, even against strong comparatives, whilst the strategy of turning parks into resorts with the opening of new hotels at several location is ongoing.

"Meanwhile, in addition to this year's launch of seven attractions, a further seven are planned for next year across the globe, with Legoland and Madame Tussauds being of particular focus."

Merlin's Legoland resorts notched up like-for-like revenue growth of 6.7% over the nine months to September 5, helped by the new Lego "Friends" themed areas at Legoland in Windsor, California and Florida.

It has also opened new hotels at a number of resorts, including the 125-lodge Enchanted Village at Alton Towers and the Aztec hotel at Chessington World of Adventures, which has helped offset the drop in visitors.

The group's trading update comes after one of the victims of the crash spoke out in her first interview about the ordeal yesterday after losing her leg in the horrific smash.

University student Victoria Balch, 20, was forced to have her right leg amputated above the knee, but told the BBC Victoria Derbyshire programme that the amputation was "a relief" after six rounds of surgery in a bid to save her leg.

Merlin has been carrying out internal investigations into the rollercoaster crash, alongside a probe by the Health and Safety Executive.

Merlin is yet to decide on the future of The Smiler, which cost £18 million and opened in May 2013, although it is thought to be hoping to reopen the ride at some stage.

A spokesman said: "It's an ongoing process and no decisions have been taken."

Your Comments

COMMENT RULES: Comments that are judged to be defamatory, abusive or in bad taste are not acceptable and contributors who consistently fall below certain criteria will be permanently blacklisted. The moderator will not enter into debate with individual contributors and the moderator’s decision is final. It is Belfast Telegraph policy to close comments on court cases, tribunals and active legal investigations. We may also close comments on articles which are being targeted for abuse. Problems with commenting?

Read More

From Belfast Telegraph