Eadwig
01 Dec 2016
Trading Update Update on trading performance for the 47 weeks ended 19 November 2016.Underlying trading in the Midway Attractions Operating Group has remained consistent with that reported at the 29 September update. The Resort Theme Parks Operating Group enjoyed a strong Halloween period, helped by favourable weather.LEGOLAND Group has shown continued positive momentum following two years of exceptional growth, although trading in Florida remains soft due to challenging market conditions. [I find the Florida comment odd - is Florida suffering because of the Fx rate and lack of British/foreign visitors? Don't US families visit Florida and such attractions? Disney World etc is there after all. I'd like to know what the "challenging conditions" are and why Florida in particular was singled out - Eadwig]Good progress has been made towards 2020 milestones, including the opening of LEGOLAND Dubai on 31 Oct and Madame Tussauds Istanbul on 28 Nov.MERL anticipates reporting good profit growth in 2016, in line with expectations. 2016 Preliminary results will be reported on 2 March 2017.********** ****I have a single tranche in MERL so far but intend to extend that to probably four tranches, as a long term growth play. I almost added before the statement which would have averaged me down slightly, but it has risen to around the same price as my first tranche today, (@436p, I'm holding at about @440p). I like to see a 5% discount on my holding price before adding when building a position, so I was waiting for around @420p or under. I think that is likely to happen on general market fluctuations, but I am also aware of that long series of higher highs and higher lows shown in the chart, and there may not be a lot more opportunity to add between now and the full year results in early March 2017 at such a discount.Re-cap of reasons for buying:* World's 2nd (to Disney) biggest entertainment group with very strong brand names and over 50 major attractions.* A very strong on-going plan for growth across Asia especially (see above), largely via franchise, so reduced Fx headwinds.* Should have a short term catalyst from the weak pound as more tourists visit UK.* Has diverse foreign earnings which which are in vogue for the above reason.* On a very personal level, a good diversification for my SIPP in terms of both the sector and a growth stock.Weaknesses:* Recent redundancies suggest no full recovery for Alton Towers after the bad accident on one of the rides there, and a lot of bad publicity.* Weakness in Florida due to 'challenging conditions' needs more explanation. Florida. is a major tourist destination all year round for Europeans and N. Americans.* The more growth there is the harder it is to maintain standards, especially when it is wide-spread growth across the globe. A potential problem only, but needs to be carefully monitored because brands can be damaged if standards are allowed to slip.
Eadwig
29 Nov 2016
Re: Broker view We can't read it unless we're subscribers, Any chance of a copy and paste - or at least a synopsis of their view, like a buy, sell or hold?I can get this much from ii:StockMarketWire | Tue, 29th November 2016 - 07:15Merlin Entertainments anticipates reporting good profit growth in 2016, in line with expectations."Underlying trading in the Midway Attractions Operating Group has remained consistent with that reported at the 29 September update," it said."The Resort Theme Parks Operating Group enjoyed a strong Halloween period, helped by favourable weather," it said in a statement."The LEGOLAND Parks Operating Group has shown continued positive momentum following two years of exceptional growth, although trading in Florida remains soft due to challenging market conditions."Good progress has been made towards Merlin's 2020 milestones, including the opening of LEGOLAND Dubai on 31 October and Madame Tussauds Istanbul on 28 November."I haven't looked at the trading update RNS in detail yet.
Eadwig
29 Nov 2016
Re: Staff made Redundant Redundancy implies people that have been employed at least 1 year (or is the rule 2 years still). Hence not seasonal adjustments - obviously an adjustment to Alton Towers not having fully recovered from the bad publicity of the accident. Seasonal adjustments are simply lay offs and rarely announced.I'm a bit surprised by that, really, a one-off accident having such a lasting impact.
peterpiper313
15 Nov 2016
Re: Staff made Redundant Seasonal adjustments?
patehan
15 Nov 2016
Staff made Redundant Merlin Entertainments is making up to 70 staff at its Alton Towers park in Staffordshire redundant, following The Smiler rollercoaster crash in 2015, it was reported. Merlin was fined £5m in September for a "catastrophic failure" of health and safety rules after the crash in June last year.
patehan
14 Nov 2016
Question Any reason as to why the downward trend for the last so many days.I'm still in for the very long term...
Eadwig
11 Oct 2016
Re: Talk Me Out Of It! shabby 2 sox,Thanks for responding, but I don't think its an either/or situation, is it?Unless I'm missing something, and I might be, as far as I know Halfords are a retail chain specialising in bikes. I don't see them cashing in on a tourist boom next summer. They might from people choosing to holiday in the UK, of course.Merlin would seem to be a reasonable play on foreign tourists and 'Staycations' (although I'd much prefer them to have Halford's P/E and yield), and they also seem to have some foreign earnings. I haven't looked at the accounts yet, but with 'The Orlando Eye' and Legoland parks, I'm assuming USD and Euros and probably other currencies too with '50 attractions world wide'.Halfords have some strange price action going on at a quick glance ... but then so do a lot of UK companies right now, one way or another. My excursions into UK retail in recent times have been few, and pretty disasterous. Next - suffering from unseasonable weather ... profits warnings etcI'm guessing Halfords can suffer from the weather just as badly - although possibly have their main sales coming up at Xmas(?) and perhaps a good year after the Olympic successes. How did they do after 2012? Does it impact? I'm forgetting GB Tour de France wins plus the race visiting a couple of years ago must have been a boost too, but I've surely missed that boat by a long chalk.Anyway, I'll certainly watch Halfords and look into them when I have time, I had no idea their yield was so good. I wouldn't buy instead of Merlin, but I may buy as well as. I have quite a lot of cash on hand.Thanks again for the response. Appreciate you taking the time.
shabby 2 sox
11 Oct 2016
Re: Talk Me Out Of It! Buy HFD instead.P/E 10Yield 5%I hold both but to be honest on balance I would add to Merlin as they seem to be the better option for long term growth.
Eadwig
11 Oct 2016
Talk Me Out Of It! I'm thinking of buying. It has some foreign earnings, top UK attractions for the tourists pouring in as the GBP goes through the floor plus Staycation pounds to be had when Brits stay at home.On the other hand,Alton Towers debacle, Stupidly high P/E and low yield. Bound to be hit hard by minimum wage increases.Should I stay or should I go?
Hardboy
06 Oct 2016
Re: Ownership "I wonder what implications were on recent fine?"I doubt there will be any. Whoever owns the land it is Merlin who built and operate the rides, and employ the staff, so it is all down to them
Radr03
06 Oct 2016
Ownership Surprised to read (Telegraph Business 5/10/16 p3) that in 2007 Secure Income REIT bought 4 theme parks, including Alton Towers & Thorpe Pk from Merlin, which continues to manage the attractions, with SI REIT as landlord. I wonder what implications were on recent fine?
shabby 2 sox
04 Oct 2016
Re: HSBC view Does anyone know the commercial agreement in place with Lego? Have they bought the rights to the name and use of Lego's? Just thinking it would have a significant impact on MERL if they lost the rights (assuming it is possible for them to lose them).
nk1999
03 Oct 2016
HSBC view From ADVFN:"HSBC initiated Merlin Entertainments at 'buy' and a target of 530p on Monday, saying the theme park owner remains "high growth, well-diversified and scalable".The bank said following a weak summer it believes there is potential for strong recovery in Merlin's Midway attractions - including Legoland and Madame Tussauds - and the group's Resort Theme Parks - which include Alton Towers and Thorpe Park - in 2017.A strong pound and worries over terrorist activity in Europe have hurt Merlin's Midway business in London, HSBC noted.HSBC estimates 30% of Merlin's Midway business is in London where it calculates like-for-like sales have been down about 7% compared to a 5% increase in the rest of Europe.However, HSBC believes the London business will turnaround in 2017 as a weaker post-Brexit pound attracts more tourists."London trends should benefit from a weak currency in 2017 and so far we have seen an increase in inbound UK numbers and expenditure but the data suggest these figures relate to friends and family visits."We expect the next data to pick up will be tourist visits into the UK, which would benefit Merlin's attractions."On the group's theme parks, HSBC thinks recovery is happening faster than anticipated. Like-for-like sales were down 18.1% in the second half of 2015 and improved to a 10.2% decline in the first half of 2016. HSBC estimates a 19% increase in like-for-like sales in the third quarter, compared to a 21% decrease the same period last year."We would expect this pace of recovery to continue into 2017," HSBC said."Together with cost savings, new attractions, accommodation and a rise in the "staycation", we forecast Resort Theme Parks earnings before interest, tax, depreciation and amortisation (EBITDA) to return to 2014 levels of £87m by 2017 rather than the market's expectation of 2018."
nk1999
02 Oct 2016
HL view At 442p:"Merlin Entertainments - A mixed performanceMerlin is second only to Disney, as an operator of themed visitor attractions. It owns the UK's leading theme parks, Alton Towers, Chessington and Thorpe Park, plus LEGOLANDs around the world. The group also owns a series of smaller attractions within the Midway division, including Sea Life Centres and Madame Tussauds.2015 was a difficult year for the group, after a terrible rollercoaster accident at Alton Towers. Visitor numbers at Alton Towers continue to be negatively impacted by the event, while lower city-centre tourism on the back of heightened security concerns is also serving to create a challenging near term backdrop.However, the longer term prospects for the business look very good. With only a hundred and fifteen attractions in the portfolio, there are plenty of opportunities to open new ones around the world. There are LEGOLANDS in the pipeline around Asia and existing theme parks are gaining hotels, to raise spend per head.With around two thirds of sales coming from outside of the UK, Merlin will be a beneficiary of the current weakness in sterling, and with the ability to open and expand attractions, year in year out, Merlin looks like one of the more dependable growth stories in the UK market.Analysts are expecting earnings per share to grow by over 50% over the next three years , which should support increases in the dividend from a starting yield of around 1.6%. The shares currently trade on a PE ratio of 20.6x forward earnings.Trading statement:Merlin has this morning released a trading statement covering the 38 weeks to 17 September 2016, which includes the key trading period of July and August. With EBITDA margins at Midway attractions now set to be in the mid-thirties, lower than previously anticipated , the shares fell by 4.5 % this morning. Merlin's reported revenues have benefited from the fall in sterling. Stripping out the effect of currency movements, group revenue has increased by 3.7% with like-for-like growth of 1.3%.Resort Theme Parks has reported LFL revenue growth of 3%, although this is achieved against soft comparatives following the negative impact of the Smiler rollercoaster disaster at Alton Towers last year. The group has accepted full responsibility, received a £5m fine this week, and say that lessons have been learnt. Although trading over the summer has started to pick up, visitor numbers at Alton Towers remain some way below 2014 levels.Within Midway Attractions, LFL revenue declined by 0.4%. Trading continues to be difficult in a number of key markets as wider security concerns affect both domestic and international visits. London in particular has been impacted, with the group yet to benefit from sterling weakness, which it had been hoped would boost overseas visitor numbers. Four new attractions have been opened in 2016, with a new brand, 'Little Big City' planned to pilot in Berlin next year.LEGOLAND has delivered 2.2% LFL revenue growth, and continues to perform well against tough comparatives. The group is pleased with early trading at the 34 room 'Castle' hotel at LEGOLAND Deutschland. However, LEGOLAND Florida has delivered a softer performance as terrorism and the Zika virus weighs on the tourism market there. Looking forward, the group expects trading at Alton Towers to continue to recover, and are confident in the prospects of all three divisions, despite the headwinds facing Midway in the short term. The group is making progress towards its 2020 strategic milestones which targets 2,000 new room openings, and 40 new attractions."
peterpiper313
29 Sep 2016
GIC Private Ltd Previously known as Singapore Government Investment Co bought 3 % shareholding. Smart move.
