Merlin Entertainments hit by drop in demand at city centre attractions
Merlin Entertainments - the company behind the London Eye and Madame Tussauds - has said that the recent spate of terror attacks hit visitor numbers at its city centre attractions in the first half of the year.
The firm suffered from "significantly reduced domestic demand" at its Midway division - which includes London Dungeons, Legoland and Shrek's Adventure - adding that it remains cautious on international visitor numbers over the key summer trading period.
The attacks on London Bridge, Borough Market and Manchester Arena earlier this year contributed to holding Merlin's pre-tax profit down in the six months to July 1, which came in flat at £50 million.
At Midway, operating profit fell almost 17% to £57 million in the period.
The terror attacks came after a bright period for Merlin, which said in March that profits were being boosted by the collapse in the value of the pound following the Brexit vote, which has resulted in an increase in tourists.
Nevertheless, total revenue rose 9.6% to £685 million on a constant currency basis, and was up 3.7% like-for-like.
Visitors to Merlin's attractions grew 6.2% to 29.7 million.
Boss Nick Varney said: "We continue to be excited by the long-term underlying growth prospects in our market and have the strategy in place to exploit these.
"We remain on track to meet our 2020 milestone targets, supported not only by the attractions and accommodation opened to date, but also by the progress we have made on the pipeline, in particular the ongoing development of new brands which will underpin the longer-term rollout."
More than 70% of Merlin's profits are derived overseas, most notably from the USA and Continental Europe.
Shares in Merlin rose more than 2% to 474p in morning trading as investors were encouraged by the overall figures.
Steve Clayton, at Hargreaves Lansdown, said: "The group's London attractions were inevitably affected in the immediate aftermath and the Midway divisional result was weak.
"But the group's global diversity paid off, with strong results in Legoland and the theme parks pushing the overall numbers ahead.
"Questions remain about just how strong Midway is at the moment, but the group has a lot more levers it can pull. Longer term, the global roll-out of the group's brands leaves plenty of potential for growth, underpinning the attractions of the stock."