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Legoland owner Merlin Entertainments sees shares leap on solid 2017 results, positive 2018 outlook

Merlin said revenue growth from Legoland Parks was strong, rising by 25% at actual rates and by 4.7% on a like-for-like basis to £609.0mln
Legoland
The group said this was driven by the opening of Legoland Japan and a full year contribution from Legoland Dubai

Merlin Entertainments PLC (LON:MERL) saw its share leap 10% on Thursday after the Legoland and Alton Towers owner reported in-line results for 2017 and said underlying expectations for 2018 are positive.

The FTSE 250-listed attractions operator saw its underlying earnings (EBITDA) rise by 9.5% to £474mln for 2017, in-line with the company's previous guidance.

READ: Merlin Entertainments shares rise after US activist investor takes stake

The firm's pre-tax profit increased by 4.8% to £271mln, up from £259mln in 2016, as revenue rose by 12% at actual currency rates and 6.6% at constant currency to £1.59bn, from £1.43bn in 2016, with like-for-like revenue growth 0.7%.

Merlin said revenue growth from Legoland Parks was strong, rising by 25% at actual rates and by 4.7% on a like-for-like basis to £609.0mln, while EBITDA grew by 22% at reported rates to £230.0mln.

The group said this was driven by the opening of Legoland Japan and a full year contribution from Legoland Dubai.

The firm's Midway Attractions business saw 2017 revenue increase by 5.7% at actual currency to £656mln, but it fell by 1.2% on a like-for-like basis as Merlin opened six new Midway attractions during the year.

The group also said revenue growth slowed due to terror attacks in the UK, particularly affecting London attractions such as Madame Tussauds.

Underlying expectations for 2018 positive

Merlin said overall trading since the year-end in a traditionally quieter period has been in line and although foreign exchange may provide a headwind to 2018 results, underlying expectations are positive.

The group's chief executive Nick Varney said: "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."

The firm is to pay a final dividend of 5.0p, bringing its total payout for the year to 7.4p, ahead 4.2% on 2016.

In late morning trading, Merlin shares were up 10.3% at 375p..

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