Coaster crash costs Alton Towers parent £30 million

Coaster crash costs Alton Towers parent £30 million

Merlin Entertainments today admitted that it will take a financial hit of more than £30 million from last month’s “devastating” Alton Towers roller coaster accident.

The UK-based theme park operator said projected earnings [EBITDA] from its resorts and theme parks division for the summer is expected to be down to between £40 million-£50 million from £87 million in the same period last year.

The serious accident on June 2 has had an “adverse impact” on trading at the start of the critical summer peak period and on the board's expectations for the financial performance for the full year.

The incident resulted in the temporary closure of the park, the suspension of UK theme park marketing and temporary ride closures at two other UK theme parks.

“The combination of these factors has significantly reduced volumes at Alton Towers Resort and, to a lesser extent, the UK resort theme parks estate,” Merlin said in a trading statement this morning.

“Action is being taken to rebuild momentum and re-engage with our customers. 

 “The magnitude of the financial impact is the result of both a significant reduction in revenue and the requirement to maintain an appropriate investment in customer service and marketing through peak season.

“Although difficult to assess at this stage, we believe that there may be some continued adverse impact on the resort theme parks operating group profitability in 2016.”

However, the company expects 2015 underlying pre-tax profit to be broadly in line with the £249 million achieved last year.

“We have committed to support those injured as best we can and implemented additional safety protocols to be sure that a similar accident will never happen again,” Merlin said.

CEO Nick Varney said: "The accident at Alton Towers in June was a devastating event, for which we have accepted responsibility and are deeply sorry. We have been humbled by the grace and fortitude of those who were injured, and their families, and will continue to do whatever we can to support them.  

"As a result of the accident, we took the immediate decision to close the park and temporarily suspend a number of rides across the UK resort theme parks estate. 

“We firmly believe that this was the right course of action reflecting the seriousness of the incident, the impact on our staff, and to allow the team to focus on supporting all those affected and on the implementation of the new safety protocols, where necessary. 

“In addition, we felt it appropriate to significantly reduce UK theme park marketing activity, in what is a critical period in the run up to the peak summer season. 

“Alton Towers Resort was reopened on June 8, but as a result of the material loss of momentum, trading at the park and, to a lesser extent, the broader UK resort theme parks estate has been adversely impacted.”

The company is due to publish its half year results on Thursday (July 30).

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