Alton Towers owner Merlin Entertainments says the rollercoaster accident in June at the theme park has significantly reduced visitor numbers.
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Profits from Merlin’s theme park business, which also includes Thorpe Park, will now be at the “in the lower part” of the £40-50 million guidance given at the end of July.
Five people were seriously injured when two cars on the rollercoaster collided in early June.
Merlin also suspended UK theme park marketing and temporarily closed rides at two other sites.
Merlin, the world’s second biggest visitor attractions group behind Walt Disney, on Thursday said sales at its theme parks division fell 11.4 percent in the 36 weeks to Sept. 5.
Trading was cautious on the wider FTSE 100 Index after yesterday’s 92 point surge, with the top flight 25 points lower at 6204.2 amid caution ahead of the US Federal Reserve’s decision on whether to raise rates for the first time in nearly a decade.
Clearly, today’s update is disappointing for the company’s investors and, while it means that the company’s shares are cheaper, they still trade on a price to earnings (P/E) ratio of over 15. However as previously anticipated, Midway Asia’s strong performance has been offset to an extent by softer trading in London where the strength of Sterling against the Euro continues to impact domestic and international visitor numbers.
Alton Towers has seen a massive slump in takings after visitors stayed away in the aftermath of the Smiler ride crash.
“The trends we reported at the half year have continued throughout the summer”.
“With more (openings) in the pipeline and the clouds of the tragedy likely to lift over time, the general view of the company’s prospects remain buoyant, with the market consensus coming in at a strong buy”, said Richard Hunter, head of equities at Hargreaves Lansdown.
Merlin said the disruption could continue to affect the profitability of its theme park group in 2016.
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“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”. This gave total like-for-like revenue growth for the period of 0.3%. The Smiler ride will not be rebranded will not be reopened until the Health and Safety Executive lifts its prohibition notice on the attraction.
