Headline numbers from Merlin Entertainments (MERL) were quite robust considering its current challenges. Aside from the negative sentiment following last year's rollercoaster crash at Alton Towers, security concerns in Europe have stunted growth at attractions in London, including Madame Tussauds. Despite a dip in like-for-like sales in its urban division, new openings helped drive a 5.3 per cent revenue increase at constant currencies. Similarly, expansion at Legoland kept divisional turnover growing strongly.
After stripping out new openings and positive currency movements, overall group revenue actually fell by 1.1 per cent. This was unsurprising given the turnover decline in its resort theme parks division, which includes Alton Towers - where revenue at constant currencies was down 9.1 per cent.
As time passes after last year's accident, recovery in the resorts segment is expected, boosted by planned openings of new rides and experiences. Meanwhile, three upcoming Lego movies are expected to drive further interest in the worldwide parks. Overall, the group is expecting further recovery and growth in the second half.
Broker Panmure Gordon expects adjusted pre-tax profits of £281m for the year to December 2016, giving EPS of 20p, up from £250m and 17.8p in 2015.
MERLIN ENTERTAINMENTS (MERL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 462p | MARKET VALUE: | £4.68bn | |
| TOUCH: | 461.9-462.4p | 12-MONTH HIGH / LOW: | 484p | 335p |
| DIVIDEND YIELD: | 1.4% | PE RATIO: | 26 | |
| NET ASSET VALUE: | 119p* | NET DEBT: | 88% | |
| Half-year to 25 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 544 | 36 | 2.5 | 2.1 |
| 2016 | 573 | 50 | 3.6 | 2.2 |
| % change | +5 | +39 | +44 | +5 |
Ex-div: 11 Aug Payment: 19 Sep *Includes intangible assets of £977m, or 96p a share | ||||
