Shares in Merlin Entertainments closed down 19.9% today, after the company released a trading update showing near-stagnation in revenue.
Chief executive Nick Varney said that Merlin was “experiencing storms” due to terrorist activity in Europe, which was particularly affecting its ‘midway’-type city-based attractions.
Revue at those attractions – which include Sea Life Centres, Dungeons and Madame Tussauds – fell by 1% in the last year.
The company’s ‘resort theme park’ attractions saw revenues falls by 2.1% in the same period.
Merlin recorded overall like-for-like growth of 0.3% due to its Legoland theme parks recording a 3.4% rise in earnings.
The company announced plans for a Legoland park in New York, plus the rolling out of Peppa Pig attractions outside the UK, but its share price traded at around a fifth lower throughout the day.
In a presentation to shareholders this morning, Varney said: “When you are experiencing storms, the sensible thing is to navigate around them.”
He said that the company’s London-based midway attractions and its UK theme parks suffered “difficult trading” following several terrorist attacks in Britain.
Poor weather in Northern Europe and extreme weather in Italy and Florida were also cited as negative factors.
“Despite the diversity of our business – by geography, brand and visitor mix – our markets continue to be impacted by certain external shocks,” Varney said.
“We also continue to face significant cost pressures, largely brought about by employment legislation, particularly in the UK.”
He added that between 2018 and 2021, Merlin would reduce capital expenditure at its current attractions by £100 million.
“Our business model allows us to ‘adjust the tiller’ given the difficult market conditions and we are doing so,” Varney said.
“I and Merlin’s management team therefore remain confident in the longer term prospects.”