Theme Park owner Merlin Entertainments plc (LON:MERL) faces an uncertain outlook on the number of visitors to its attractions following recent terrorist attacks in London and Manchester.
The group, which owns Alton Towers, Legoland and Thorpe Park, will publish its second quarter trading statement on Tuesday and investors are likely to be interested on any guidance to its full year.
Merlin has recently enjoyed growth in the number of visitors to its UK attractions as a weaker pound supports tourism.
A decline in the pound after last June’s Brexit vote has made it cheaper for overseas travellers to visit Merlin’s theme Parks while the poor foreign exchange rate for Britons has led to more ‘staycations’.
In March, Merlin reported a 3.5% increase in 2016 pre-tax profits to £277mln and a 11.7% rise in revenue to £1.45bn as visitor numbers at its attractions rose by 1.3% to 65.1mln.
The company said recovery was well underway at Alton Towers, which was impacted by a crash on its Smiler roller-coaster in June 2015, with strong performances from its wider Resort Theme Parks estate.
Numis said it expects the turnaround at Alton Towers to continue to drive like-for-like sales at its resort theme parks and support robust trading in Legoland.
“The main unknown is clearly London - while visitation remained strong until May (London hotel RevPAR (revenue per available room) has grown by circa 11% in the year-to-date) we expect a short term impact from recent terrorist attacks,” the broker said.
“In previous incidents (such as July 2015) RevPAR has fallen by up to 10% in the immediate term before recovering within three months.”
Ashtead reports full year results...
Equipment rental company Ashtead reports its full year results with analysts expecting strong results, driven by its US business and high demand in the UK.
Analysts at Numis predict pre-tax profit of £796mln, compared to £645mln the previous year, with fleet on rent up 15%.
“The performance of the US operations over the medium term is supported by the on-going structural shift from buy to rent, and underlying investment in infrastructure,” it said.
The UK unit has been boosted by additional fleet bought from machinery rental business, Hewden, which went into administration last year after Brexit.
UK inflation data in focus...
UK inflation figures from the Office for National Statistics are expected to show the consumer price index (CPI) remained above the Bank of England’s 2% target in May.
Economists expect CPI rose 2.7% year-on-year in May, unchanged from the previous month, as a weaker pound pushes up import costs. Compared to a month ago, CPI is forecast to ease to 0.2% growth in May from 0.5% in April.
“Inflation has been creeping higher, stoked by a lower pound, higher oil and fuel prices and the bad European winter which hit supply of salad and vegetables,” said Russ Mould, investment director at AJ Bell.
Announcements due:
Interims: Ashtead Group PLC (LON:AHT); Oxford Biodynamics PLC (LON:OBD)
Finals: Abzena plc (LON:ABZA); Park Group PLC (LON:PKG); Trifast PLC (LON:TRI); Telecom plus PLC (LON:TEP); Halma PLC (LON:HLMA); Iomart Group PLC (LON:IOM); CML Microsystems PLC (LON:CML); FIH Group Plc (LON:FIH)
Evgen Pharma Plc (LON:EVG)
Trading Statement: Merlin Entertainments PLC (LON:MERL); Capita Group (The) PLC (LON:CPI)