Merlin Entertainments profits slump as Legoland disappoints

Madame Tussauds owner Merlin Entertainments has revealed a slump in profits and said performance at its Legoland parks was “disappointing” in the first half.

The company posted a 22% fall in underlying pre-tax profits to £34 million for the six months to June 29.

It said visitor numbers rose 3% to 30.8 million and added that results were “broadly” in line with expectations in what is traditionally its quieter period.

Revenue grew by 8.1% overall to £763 million.

Midway attractions, which include Madame Tussauds and Sea Life, and resort theme parks returned to growth as the group added more attractions and accommodation.

Like-for-like revenue growth in the midway sector was 4.5%, while resort theme parks grew 4.5%.

However Legoland sites failed to attract as many visitors in the period following Easter due to poor weather. Even the release of a sequel to The Lego Movie did not provide the expected boost.

On a like-for-like basis, revenue in the division fell 0.7%.

The figures come after Merlin recommended a £5.9 billion takeover bid in June from Lego’s owners, a private equity giant and a Canadian pension fund.

Under the proposed deal, Merlin will leave the stock market and be owned by Kirkbi, the investment vehicle of Lego’s Danish founding family, Blackstone and the Canadian Pension Plan Investment Board (CPPIB).

Due to the takeover process, Merlin did not recommend an interim dividend for shareholders.

Analysts at Liberum said the company would benefit from leaving the stock market if the takeover goes through.

“The move back into private ownership should help drive the significant long-term investment required in the business,” they said.

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