A depressed London market resulted in a difficult first half for Merlin Entertainments (MERL). Warm weather across Europe discouraged people from heading to indoor attractions, while some tourists may still be spooked by terror attacks in the British capital. Like-for-like sales across midway attractions only fell 2.7 per cent during the first half – better than analysts’ estimates of a 3 per cent squeeze – but management said it’s too soon to tell whether a full recovery is on its way.
Previously, Legoland has been a bright spot for Merlin. But last year’s Lego movie boost and softer trading from the recently opened Legoland Japan meant that like-for-like sales rose just 0.9 per cent, well below analyst estimates of 2.5 per cent. But a sequel to the Lego film is slated for next year, while soft trading is said to be "normal" after the initial uplift from a new opening.
Alton Towers has also started to recover following the highly-publicised 2015 rollercoaster crash, helping to drive 7.7 per cent like-for-like sales growth to £130m across resort theme parks. The division narrowed its operating loss from £21m this time last year to a £17m loss this year.
Analysts at Barclays expect pre-tax profits of £276m during 2018, giving EPS of 20.8p, compared with £271m and 20.5p in 2017.
| MERLIN ENTERTAINMENT (MERL) | ||||
| ORD PRICE: | 382p | MARKET VALUE: | £3.90bn | |
| TOUCH: | 382-383p | 12-MONTH HIGH: | 493p | LOW: 317p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 152p* | NET DEBT: | 80% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 685 | 50.0 | 3.7 | 2.4 |
| 2018 | 709 | 43.0 | 3.3 | 2.5 |
| % change | +4 | -14 | -11 | +4 |
| Ex-div: | 16 Aug | |||
| Payment: | 24 Sep | |||
| *Includes intangible assets of £1.02bn, or 100p a share | ||||
