Merlin Entertainments far from dead in the water

Nick VarneyMerlin Entertainments is continuing to press ahead with major investments at its theme parks, despite recent setbacks.

The accident that seriously hurt five people at Alton Towers last month has had a huge effect on the company’s theme parks, that is unquestionable.

However when Merlin revealed today that the effects to the overall business would simply mean that they made only as much profit as they did last year, a strong message was sent.

Instead of shying away from investment, perhaps delaying it or even abandoning it for the moment, it is pressing ahead with the new attractions which its CEO Nick Varney is convinced will bring back those that are staying away.

In a press conference this morning, he said that “innovative” new attractions at Thorpe Park, next year, and Alton Towers, in what is expected to be 2017, would entice people to return.

The park is already busier in terms of short break bookings – the ultimate goal of Merlin’s ‘Resort theme parks’ concept.

Sound judgement

Merlin has also shown itself to be in sound judgement by cutting back Alton Towers’ opening hours by an hour to 5pm during weekdays, despite the summer holidays.

Some midweek days at the park have attracted ride queues shorter than those seen on rainy November weekdays in recent years.

The previous criticism hours cuts have attracted are simply not justified in this instance.

Many rides are attracting no queues all day, and certainly by late afternoon the park has been virtually deserted.

Air has been at Alton Towers since 2002

Air has been at Alton Towers since 2002

Meanwhile, considerable cosmetic improvements to the Air rollercoaster will be implemented for next season, including the bolting on of a new income stream in the form of a highly-themed restaurant.

It seems to support the long-standing potential concept of re-locating the park’s entrance – or possibly adding an additional one – to the Forbidden Valley area.

The company’s evolving business models are generally sound, with only the increasing tendency to almost badger people into posing for paid photographs standing out as somewhat irritable.

The company’s large portfolio of ‘midway’ attractions and Legoland parks worldwide are certainly capable of carrying Alton Towers and others parks in the short term, but that’s unlikely to be needed for long.

As the share price quickly got over the initial shock of the profit warning issued on Monday, the consensus among financial analysts remains that shares in Merlin are a good investment going forward.

Merlin is proving itself to be a professional and competent operator following the disastrous Smiler accident, and Nick Varney must be credited for keeping the company going in the right direction.