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Theme Parks – Merlin Entertainments: Financial Results for the year to Dec 26th ’09

News

Financial highlights

–          Strong and resilient growth in the face of the global downturn

–          Continued roll-out of Midway Attractions

–          Further improvement in performance of theme parks with the opening of new rides and attractions and development of destination positioning

–          Group Revenue up 16.1% to £769m(1)

–          Like-for-like Revenue up 12.9% to £720.2m(1)

–          Ongoing EBITDA up 16.6% to £238.6m(2)

–          Ninth straight year of double digit percentage growth in historical EBITDA in Merlin’s core businesses (3)

–          Cash generated from operations of £233.6m

–          Capital investment of £101.2m during the year

–          Leverage reduced to just over 4 times from just over 5 times

–          Current trading in line with expectations

Operational and development highlights

–          Total Visitor numbers increased to 38.5m – a rise of 9.7%  (3.4m visitors)

–          60% increase in sales of Merlin Annual Pass

–          Opening of Madame Tussauds Hollywood, SEA LIFE Porto and the re-launch of the London Aquarium as the SEA LIFE London Aquarium

–          Announcement of development of LEGOLAND Florida and LEGOLAND Malaysia, opening in 2011 and 2012 respectively

–          Over 20% incremental ROIC delivered in the year on new Midway sites(4)

–          Continued momentum of Midway roll-out strategy with three attractions due to open on three continents this year (LEGOLAND Discovery Centre Manchester, SEA LIFE Phoenix and Madame Tussauds Bangkok) and three currently secured for 2011 (Madame Tussauds Vienna, SEA LIFE Jesolo and LEGOLAND Discovery Centre Dallas), with further sites under consideration

Nick Varney, Chief Executive, said:  “We are delighted with Merlin’s performance in 2009. In the midst of a deep global recession we welcomed over 3m more visitors to our attractions and recorded the ninth straight year of double digit percentage growth in historical EBITDA in our core businesses. This is a unique business, with a clear strategic vision – and the management team and resources to deliver it.

“These results demonstrate the resilience of our business model and are the product of continued investment in the business over the past decade.

“During 2009, as well as delivering strong increases in both sales and profits we have reduced debt leverage, leaving the Group better positioned than ever before. And since the end of the year we have continued to develop the business – most importantly with the announcement of our multi-million dollar investment in the biggest family tourist destination in the world, with the planned opening of LEGOLAND Florida.

“In addition we have continued to strengthen our Board and we are delighted to have separately announced today the addition of a further non-executive director in Brian Wallace, the Group Finance Director of Ladbrokes.

“As we approach the start of our key trading period we have exciting new developments in place in all of our attractions which will ensure we continue to deliver memorable experiences for our many millions of customers worldwide and keep us on track for another year of growth.

“Merlin is a world-class business operating iconic visitor attractions across three continents. We have a clear and proven strategy to develop a high-growth international family entertainment business, built on strong brands and a portfolio of attractions balanced by geography, product and demographics.

“This business is strongly cash-generative with a robust balance sheet and an experienced management team committed to delivering on our growth plans.”

 (1) On a constant currency basis, Group revenue rose 9.4%, with like-for-like sales up 6.4%.

(2) Ongoing EBITDA is defined as EBITDA before exceptional and non-trading items and shareholder monitoring fees.  On a constant currency basis Ongoing EBITDA rose by 9.2%.

(3) Historical EBITDA represents earnings before interest, taxation, depreciation and amortisation under the accounting standards in place in the year in question

(4) Based on sites opened from 2004 – 2008

Enquiries

 Merlin Entertainments Group       Tel: ++ 4420 8899 6110/ ++ 208 948 4225 / ++ 7774 415372
Sally Ann Wilkinson  Penny Roberts
Tulchan Communications   Tel: ++ 44 20 7353 4200  Susanna Voyle  David Allchurch

 1. MERLIN ENTERTAINMENTS GROUP is the leading name in location based, family entertainment, and has seen the most successful and dynamic growth of any company in the sector over the last five years. The world’s second largest visitor attraction operator, Merlin has 60 attractions and six hotels/two holiday villages in 13 countries and across three continents.   The company aims to deliver memorable and rewarding experiences to its 38 million visitors worldwide, through its iconic global and local brands, and the commitment and passion of its managers and 15, 000 employees. Merlin Entertainments operates the following attractions – SEA LIFE, Madame Tussauds, LEGOLAND, The Merlin Entertainments London Eye, Dungeons, Gardaland, LEGOLAND Discovery Centres, Alton Towers Resort, Warwick Castle, Thorpe Park, Chessington World of Adventures and Zoo, Underwater Adventures, Heide Park and Earth Explorer.

Merlin Entertainments is a privately owned company.  Its primary shareholder is the Blackstone Group, which purchased the company in May 2005.  Other shareholders are KIRKBI A/S, the management team and Dubai International Capital LLC (DIC).

 
 2. MERLIN SHAREHOLDERS

The Blackstone Group is one of the world’s leading investment and advisory firms. We seek to create positive economic impact and long-term value for our investors, the companies we invest in, the companies we advise and the broader global economy. We do this through the commitment of our extraordinary people and flexible capital. Our alternative asset management businesses include the management of corporate private equity funds, real estate funds, funds of hedge funds, credit oriented funds, collateralized loan obligation vehicles (CLOs) and closed-end mutual funds. The Blackstone Group also provides various financial advisory services, including mergers and acquisitions advisory, restructuring and reorganization advisory and fund placement services. Further information is available at www.blackstone.com.

KIRKBI A/S is a privately held, family-owned investment and holding company based in Billund, Denmark.  Its holdings include a 75% ownership share in the LEGO Group, the remaining 25% being held by a family foundation. The LEGO Group was founded in 1932 and today the group is one of the world’s leading manufacturers of play materials for children, employing approximately 8, 000 people globally.  The LEGO Group is committed to the development of children’s creative and imaginative abilities.  LEGO products can be purchased in more than 130 countries. LEGO and the LEGO logo are trademarks of The LEGO Group. ©2009 The LEGO Group.

Dubai International Capital LLC is an international investment company established in 2004 as a wholly owned subsidiary of Dubai Holding. DIC invests private funds on behalf of Dubai Holding with a mandate to build a portfolio of internationally diversified assets. DIC invests via two core divisions Private Equity and Emerging Markets. DIC Private Equity invests in high performing mid-cap companies in Europe and North America with a focus on secondary buyouts that include Travelodge, Merlin Entertainments, Doncasters, FastenTech, Mauser, Alliance Medical, and Almatis. DIC Emerging Markets invests in buyouts, buy-ins, listed equities, single-country funds and sector specific funds with a geographical focus in the Middle East.  Notable investments include the UAE-based Rivoli Group and KEF Holdings, Oger Telecom and Indian bank ICICI. Jordan Dubai Capital is a US$300 million fund investing exclusively in Jordan. Sector-specific funds include the US$300 million MENA Infrastructure Fund and Ishraq, a US$150 million vehicle to launch Holiday Inn Express hotels across the Middle East.

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