Smiler incident could cost Merlin £50m, says operator
by Tom Anstey | 27 Jul 2015
The Smiler has been closed since the incident at Alton Towers / Merlin Entertainments
Merlin Entertainments has said the rollercoaster crash that seriously injured four people in June could affect profits by up to £50m (US$77.6m, €70m), with the tragic incident having an adverse effect on trading at the start of an important period for the operator.
The accident on the Smiler ride at Alton Towers – which saw two people have their right and left leg respectively partially amputated after a carriage full of people collided with an empty one – led to the temporary closure of Alton Towers for several days. The Smiler is yet to reopen.
Profits for the theme parks division in 2015 are expected to be between £40m (US$62.1m, €56m) and £50m, compared with £87m (US$135.1m, €121.8m) in 2014. A £40m result would represent a £50m shortfall on the £90m (US$139.8m) €126m), figure predicted for 2015.
In addition to the closure of Alton Towers, Merlin also suspended promotions advertising its theme parks and closed multiple rides at other UK theme parks to reassess safety procedures.
One positive note for the attractions operator is that due to better-than-expected trading results across the wider Merlin portfolio, annual underlying pre-tax profit would be “broadly in line” with the £249m (US$386.6m, €348.8m) figure posted last year. Merlin said that increased visitor numbers at its Legoland, Sea Life and Madame Tussauds attractions contributed to this, with visitor numbers expected to rise by 200,000 combined to hit 27.7 million.
“The serious accident at Alton Towers on 2 June has had an adverse impact on trading at the start of the critical summer period and on the board's expectations for the financial performance of the group for the full year,” said a company statement.
“The accident resulted in the temporary closure of the park, the suspension of UK theme park marketing and temporary ride closures at two of our other UK theme parks. The combination of these factors has significantly reduced volumes at Alton Towers and, to a lesser extent, the UK Resort Theme Parks estate.
“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.”
Shares in the operator dropped 8 per cent at the start of trade today (27 July), but recovered to a 3.5 per cent decline at £4.08 (US$6.34, €4.72) per share, still around 20 per cent higher than when the company first floated in November 2013.
09 Jun 2015
17-year-old loses leg after Alton Towers accident
08 Jun 2015
Alton Towers reopens after Smiler accident
05 Jun 2015
Four Merlin rollercoasters temporarily shut down after Alton Towers accident
04 Jun 2015
Alton Towers to remain shut until cause of accident is determined, says Varney
02 Jun 2015
Alton Towers closes for internal investigation after Smiler crash seriously injures four
04 Nov 2013
Alton Towers forced to close The Smiler after wheels hit riders
Merlin Entertainments has said the rollercoaster crash that seriously injured four people in June could affect profits by up to £50m (US$77.6m, €70m), with the tragic incident having an adverse effect on trading at the start of an important period for the operator. The accident on the Smiler ride at Alton Towers – which saw two people have their right and left leg respectively partially amputated after a carriage full
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