Diversity paying dividends in tumultuous market

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The Merlin Entertainment group posted positive preliminary results for the 2017 calendar year despite the weather and unfavourable market conditions.

A flexible approach to strategic models and the continued success of diversification programmes saw Merlin Entertainment overcome obstacles in the operational environment to report strong revenue growth and record-breaking visitor numbers in 2017.

The group’s preliminary announcement tells of a calendar year that saw positive momentum across almost every part of the business early in the period ultimately offset by the unprecedented spate of terror attacks in the UK and poor to extreme weather throughout the summer season.

However, despite such adverse operational conditions, Merlin, due to its increasingly diversified portfolio, was still able to deliver total revenue growth of 11.6 percent (6.6 percent organic growth) and EBITDA of £474m versus £433m the year prior and ultimately saw a record 66m visitors.

Nick Varney, Merlin Entertainments CEO, said: “A year that started well with positive momentum in almost every part of the Group was ultimately defined by the unprecedented spate of terror attacks in the UK and poor to extreme weather throughout the summer season in Europe.

Despite this, thanks to the efforts of our extraordinary team, we have reported overall growth in revenue, profit and cash flow, welcoming 66 million visitors – our highest on record.

He added that the group had made good strategic progress against a difficult trading backdrop in a period that saw core brands expanding into new locations from Japan to Berlin as well as the establishment of new location experiences based in the UK, like the The Bear Grylls Adventure in Birmingham and gaining the rights to Peppa Pig attractions globally.

“Furthermore, we were motivated throughout 2017 to review our approach to capital allocation and reflect upon recent performance which has fallen short of our expectations in some areas,” commented Varney.

Regarding the overall landscape of the tourism the market thr group commented in the report that: “Developed markets have seen a substantial decline in the traditional two week summer holiday in favour of shorter, more frequent breaks.

This market dynamic benefits our theme parks which are predominantly domestic focused and increasingly targeting the short break market with themed accommodation, as well as our Midway attractions located in city centres.”

Looking forward Varney commented on a positive note: “Merlin continues to evolve and, with attractive market fundamentals and the right strategy in place, we remain highly confident in the long term prospects for the business.”

 


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