Thursday 1 August 2019 8:50 am

Lego Movie 2 fails to deliver for Merlin Entertainments

Theme park operator Merlin Entertainments reported weaker trading at Legoland in the first half of the year due to poor weather and a lack of visitor momentum from the latest Lego film release.

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The figures

Revenue rose in the 26 weeks to 29 June to £763m – up from £706m the previous year.  Underlying profit before tax was down 24.4 per cent to £34m from £43m. 

Earnings before interest, tax, depreciation and amortisation (Ebitda) were up 1.4 per cent to £191m from £188m.

Earnings per share fell 24.7 per cent from 3.3p to 2.5p

The company did not issue a dividend as in June it secured a £4.8bn takeover offer from the family that owns Lego and private equity firm Blackstone.

Why it’s interesting

Merlin said the release of The Lego Movie 2 had not delivered the momentum it was expecting in the first half. Wet weather in May and June also dampened Merlin’s results. 

However, the company saw improvement at its London attractions, which includes Madame Tussauds, the London Eye and the London Dungeons. 

Merlin also warned that the opening of its largest Legoland site in New York could be delayed.

The park is expected to open in 2020. However, this morning the Alton Towers owner said that on-site accommodation provision has been pushed back until 2021. 

“Timetable and costs are under pressure given the scale and complexity of the project,” Merlin said. 

In June, Kirkbi, the investment vehicle of the Danish billionaire family behind Lego, and Blackstone offered to buy Merlin for 455p per share. Kirkbi, which already holds a stake of just under 30 per cent in Merlin, said the takeover would help the firm “realise its potential to grow”.

What Merlin said

Chief executive Nick Varney said: “After a number of years of headwinds, it is pleasing to see both Midway and Resort Theme Parks (RTP) returning to better levels of like for like revenue growth, with improved cash generation. 

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“In Midway, we have seen an improvement in London trading and a generally solid performance elsewhere driving 4.5 per cent like for like revenue growth, whilst RTP has delivered like for like growth of 3.0 per cent despite difficult comparatives. Trading in Legoland Parks has however been more disappointing.

Although we enjoyed a strong Easter and Spring Break performance, trading since then has been affected by poor weather in May and June, difficult market conditions in a number of countries and limited momentum from ‘The Lego Movie 2’.”

Main image credit: Getty