Theme park owner Merlin Entertainments (LON:MERL) said today the recent terrorist attacks in London and Manchester have deterred visitors from its UK attractions over the past month.
Merlin experienced softer domestic demand for day trips to its UK attractions, which include Madame Tussaudes, Legoland, Alton Towers and Thorpe Park, in the immediate aftermath of the Westminster attack in March.
It saw a further decline in the number of visitors after the Manchester bombing and the London Bridge stabbings last month.
Merlin said a number of its UK theme Parks have been "adversely affected in recent weeks by the terror attacks and subsequent heightened security measures".
The group still continued to achieve strong foreign visitation numbers, as a weaker pound made the UK a cheaper tourist destination. However, the group was cautious on the outlook over coming months, noting the lag between holiday bookings and visitation.
Shares in Merlin fell 2.48% to 490.52p in morning trading.
Impact of UK terrorist attacks on unclear, says Merlin CEO...
Chief executive Nick Varney said the impact of recent terrorist attacks on the group’s London attractions is “unclear at this stage”.
“What is clear however is that London has bounced back before, and will do again,” he said.
“I have every confidence in the longer term resilience and growth trajectory of the market. London is very much open for business, welcoming visitors from the UK and from around the world to this exciting and vibrant city.”
Merlin makes progress on global expansion...
Varney said despite the attacks, the company has made good progress in its so-called 2020 New Business Development milestones.
As part of the development, Merlin has this year opened 250 accommodation rooms in Legoland Florida and Legoland Billund. The company also opened Legoland attractions in the Australian city of Melbourne, Philadelphia in the US and Japan, as well as a Madame Tussauds in Nashville.
As it expanded its business globally, Merlin said it has been trading in line with expectations in the year to date.
“Merlin has a diverse portfolio of global brands with over 70% of 2016 profits from outside the UK and this proportion will only grow over time as we continue to invest internationally. I remain confident in the company's underlying growth prospects,” said Varney.
International revenue to support Merlin through decline in UK visitors...
Neil Wilson, senior market analyst at ETX Capital, said the warning about visitor numbers in the UK this year is "not encouraging, but it is worth noting Merlin is only about a third of the way through a planned global expansion of Legoland".
"The Japan site opened in April and with plans for further expansion in Asia and US (a site in South Korea is planned, while it is exploring options for sites in China and New York, too) there ought to be considerable new revenue streams coming in the longer term that investors who are worried about terror threats to the UK business in the near-term may want to look more closely at.”