Forced to abandon plans for an IPO in 2010 due to a jittery market – a costly rethink with £4.9m of professional and advisory fees hitting the P&L as exceptional items – the company’s underlying business model remains sound.
Whilst in the long term the plan is still to create Merlin plc, Merlin is committed to its core strategy:
1. Organic growth
2. Continued roll-out of Midway attractions
3. Transition of Theme Parks into Resort Theme Parks and
4. Development and acquisition.
Merlin is now the clear market leader in Europe and second only to Disney in terms of visitor admissions with a vision to become "the world-wide leader in branded, location based entertainment". In December 2010, Blooloop asked Merlin’s MD Resort Theme Parks, Mark Fisher, what Merlin’s ultimate ambition is (see Interview with Merlin Entertainments’ Mark Fisher). Fisher says, “I’ve been asked before, “What is success for Merlin?”. The answer is, it’s not about growing and selling the company, its about one day looking at this fabulous team that is rocking around the world and knowing you’ve been part of growing that. It’s not about where we’ve been, it’s about where we’re going.”
Highlights from 2010’s performance are:
• Total visitors increased to 41.0m – a rise of 2.5m (6.5%)
• Group Revenue up 4.1% to £800.8m (2009: £769.0m)
• Underlying Group EBITDA up 8.5% to £255.8m (2009: £235.7m)
• Capital investment of £103.8m during the year (2009: £101.2m), funded from operating cash flow, comprised £74.6m on existing estate and £29.2m on new business development in Midways and LEGOLAND Florida
• 2010 acquisitions of Cypress Gardens, Florida, USA to become LEGOLAND Florida and operating contract for the UK’s iconic Blackpool Tower Complex
• 2011 acquisition of Sydney Attractions Group completed post year end
Nick Varney (below), Merlin Entertainments Chief Executive, said, “We are delighted to report another year of strong performance from Merlin Entertainments, with growth coming from all parts of our unique business. During 2010 we significantly extended our geographic footprint, while delivering further growth in turnover and profitability as we welcomed 2.5m more visitors to our iconic attractions around the world.
“In the past year we have continued to invest to grow and develop our business. We now operate over 70 attractions in 17 countries across four continents under our internationally recognised brands. Looking ahead, we have accelerated our growth plans and by the end of 2012 we will be operating more than 80 attractions as we develop further across Europe, North America and the Asia Pacific region.
“This year will be one of the most exciting in Merlin’s history. October will mark our move into the biggest family tourist centre in the world when we open the gates to LEGOLAND Florida. The development of this exciting theme park on the historic Cypress Gardens site has gone to plan and early ticket sales have confirmed our confidence in taking LEGOLAND to the heart of the US theme park market. In addition, we will capitalise on the wealth of opportunities open to us in the Asia Pacific market in the wake of our acquisition of the Sydney Attractions Group while keeping up the pace of change in Europe and the US with the opening of seven new Midway attractions.
“We are now approaching the start of our key trading period in confident mood. We have an impressive pipeline of new developments across all of our existing attractions, including thrilling new roller coasters in our theme parks in Germany and Italy. While the outlook for the consumer economy remains uncertain, we believe Merlin will make further good progress and continue to grow. Under our new ownership structure we will continue to invest in our clear and proven strategy of growing our strong brands in a portfolio of attractions balanced by geography, product and demographics.”