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Merlin still committed to expansion and IPO
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lugnet.mediawatch
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Date:
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Fri, 15 Apr 2011 10:30:22 GMT
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Merlin still committed to expansion and IPO
By Roger Blitz, Leisure Industries Correspondent
Published: March 29, 2011
Merlin Entertainments plans to step up expansion with further theme park
acquisitions and developments, and remains wedded to floating the company.
The visitor attraction operator, second in the world to Disney in admissions,
last year was a week away from issuing a statement declaring its intention to
float when market volatility prompted it to abandon the IPO plan.
The company instead in June acquired a new shareholder in CVC, the private equity group, which took a 28 per cent stake alongside rival
private equity firm Blackstone Group, which became majority shareholder in 2005, and Kirkbi, the
majority owner of the LEGO Group.
Nick Varney, chief executive of the operator of LEGOLAND, Madame Tussauds, the
London Eye, Heide Park, in Germany, the Dungeons and other attractions, said the
2010 results it published on Tuesday underscored its rationale for flotation.
“We still believe all along that Merlin should be a listed company,” Mr Varney
said. “We had a queue of private equity companies (wanting to buy a stake) a
mile long. Our aspiration remains Merlin Entertainments plc.”
The group said underlying earnings before interest, tax, depreciation and
amortisation had increased 8.5 per cent to £255.8m in the year to December 25.
Revenues rose 4.1 per cent to £800.8m and the number of visitors by 6.5 per cent
to 41m. Merlin made a pre-tax profit of £26m. Weather conditions hit trading in
the first quarter of 2010, and Mr Varney said sales on continental Europe were
flat, while the corporate market was “sticky”.
“These results reflect the fact that Merlin was the business model we said it
was,” Mr Varney said. “We have got a new shareholder and what we need to do
almost immediately is get back into expanding the business.”
Merlin, which has over 70 attractions in 17 countries, last year purchased a
Florida theme park, which will become a LEGOLAND, and became operator of the
Blackpool Tower complex. This year, it completed the £100m cash purchase of
Sydney Attractions Group.
It will open seven attractions in 2011 and is targeting North America, Europe
and Asia-Pacific for expansion. “We are keen to see business expand much more
rapidly in Asia-Pacific over the next few years,” Mr Varney said.
“In various parts of the world, we want to expand our business both through
organic new developments and acquisitions. If you add our visitor numbers to
Disney, you would still only have 5 per cent of global visitor attractions.”
In the UK market, Mr Varney said that while he was concerned about inflation and
the high VAT levels the tourism industry has to endure compared with those on
continental Europe, he believed the market for visitor attractions was
resilient.
“We’ve been told for the last three years it was going to fall, and we’ve done
pretty well,” Mr Varney said. “Our experience is people still want quality days
out with family and friends. They won’t cut that, as long as they get a really
good experience.”
The owners invested £103.8m in capital expenditure and reduced net debt from
£1.09bn to £615.3m by converting loans into equity.
From: FT.com
-end of report-
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