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Leisure, gaming and gambling

Merlin Entertainments takes hit from lower theme park trade

Merlin says theme park downturn could affect its profits in 2016

Merlin Entertainments (LON:MERL) said it was trading in line with expectations but warned that lower trading at its theme parks could continue in 2016.

Merlin, which runs the Alton Towers theme park in Staffordshire where an accident took place in June, said its Legoland Parks operating group was still trading strongly.

But it said fewer visitors to its theme parks, particularly Alton Towers, had offset that, as had the weakness of the euro at its London attractions such as Madame Tussauds.

The company said the theme park downturn had continued through the summer, worsened by the rain in August.

Like-for-like revenue from the resort theme parks fell 11.4% year-on-year.

The group said, however, that the financial position of the business remained strong, with a significant reduction in net debt since the end of June.

It said it continued to expect 2015 underlying pre-tax profit to broadly match last year's.

It expects resort theme parks' EBITDA to be in the lower part of the guided range of £40mln-50mln in 2015, provided trading improves as autumn events such as Halloween kick in.

Merlin added: "Although difficult to assess at this stage, we continue to believe there may be an ongoing adverse impact on the resort theme parks operating group profitability in 2016."

Chief executive Nick Varney said: "While near term challenges remain, the group is making good overall progress on its growth strategy."

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