Merlin Entertainments reports 11.4 per cent drop in revenue

<p>The company says a roller coaster accident in June has reduced visitor numbers.</p>

Merlin Entertainments has reported an 11.4 per cent drop in revenue compared with last year at its Resort Theme Parks.

The firm, which owns Alton Towers, Chessington World of Adventure and Thorpe Park, says a roller coaster accident earlier this year had contributed to a significant drop in visitors.

In June, Alton Towers was temporarily closed following a collision on the Smiler roller coaster. Of the sixteen injuries sustained during the crash, five were classified as major.

Based on summer trading and future bookings, Merlin Entertainments says it expects profits for 2015 to be at the lower end of between £40 million and £50 million for its theme parks division. – compared to £87 million last year. The company also expects the disruption to continue and says it could affect 2016 results too.

Commenting on the results, chief executive Nick Varney said: "The trends we reported at the half-year have continued throughout the summer." He added that the weak euro was impacting visitor numbers at London attractions.

However, he  noted that the performance of the company's Legoland Parks has remained strong.

Victims' recovery

Recently, one of the victims, Victoria Balch spoke to the BBC. She underwent several surgeries following the incident and eventually had her right leg amputated.

She said that Alton Towers seemed to be doing everything they could for those affected by the crash and that she had received weekly visits from park staff.

"It's not their fault personally – they're normal people who have families," she explained.

Leah Washington also had a leg amputated following the accident, while Joe Pugh suffered severe knee injuries and Daniel Thorpe suffered a broken leg and punctured lung.

Merlin Entertainments says it has contacted all of those injured during the crash and that victims would be receiving compensation.The firm also pointed out that it was the first accident in the company's history.

In early trading on Thursday (September 17th), share prices in Merlin dropped one per cent.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.