Alton Towers crash prompts £47m profit warning from Merlin and sends shares tumbling
Published 27/07/2015 | 08:34
The theme park operator Merlin has issued a profit warning after thrill-seekers stayed away from Alton Towers following a major rollercoaster crash.
The incident, on June 1, which left four people seriously injured, led to the temporary closure temporary of the park.
Merlin said in a trading update that its full-year underlying earnings for its theme parks operating group will be slashed by as much as £47m as a result, compared with last year. Earnings before interest, taxes, depreciation, and amortisation are now expected to come in between £40m and £50m, versus £87m in 2014.
The FTSE 100 stock is poised for its worst one-day fall ever, plunging 7.8pc minutes after the markets opened. It was changing hands at 390.7p - down 32.4p - before 8.30am.
Merlin said: “The accident at the Alton Towers Resort resulted in the temporary closure of the park, the suspension of UK theme park marketing and temporary ride closures at two of our other UK theme parks.
“The combination of these factors has significantly reduced volumes at Alton Towers Resort and, to a lesser extent, the UK Resort Theme Parks estate.”
As well as Alton Towers, Merlin operates Chessington World of Adventures and Thorpe Park.
The company said it was taking action “to rebuild momentum and re-engage with our customers” but that it believes its bottom line will continue to suffer into 2016.
The disaster for Merlin’s theme parks group will be partly offset by lower financing costs and general cost cutting, so that group underlying profit before tax for the year is expected to be in line with last year’s £249m.
Group revenues were ip 2.8pc in the first half to £544m.
Nick Varney, chief executive officer, said: "The accident at Alton Towers in June was a devastating event, for which we have accepted responsibility and are deeply sorry.
“We have been humbled by the grace and fortitude of those who were injured, and their families, and will continue to do whatever we can to support them.”
The 20mph crash, on the Smiler ride, caused two people to have legs amputated.