Merlin Entertainments’s stock price tumbled on Tuesday, after the owner of theme park Alton Towers, Legoland, and the iconic London Eye, said its drop in trading and dampened outlook was due to the terror attacks in Manchester and London.
The stock price fell by over 2.5% as of 10.53 a.m. BST (5.53 a.m. ET):
“We are making good progress towards our 2020 New Business Development milestones. That said, the impact of recent terror attacks on our London attractions is unclear at this stage,” said Nick Varney, Chief Executive Officer.
A reluctance to visit high-density areas and attractions among consumers has increased since the bombing of the Manchester Arena at an Ariana Grande concert on May 22, and following a rampage carried out by three men in London Bridge and Borough Market on June 3.
These attacks had a much stronger effect on visitor numbers to Merlin’s attractions – which include the Legoland Parks — than the earlier Westminster terror attack in March.
But Varney seemed confident the slump is only temporary: “London has bounced back before, and will do again. I have every confidence in the longer term resilience and growth trajectory of the market,” he said.
According to Nicholas Hyett, equity analyst at Hargreaves Lansdown, the group has performed broadly in line with expectations. But, he said, “the tragic events in Manchester and London do seem to be affecting visitor numbers to its [Merlin’s] attractions. Exactly how significant that impact proves, remains to be seen.”
Merlin’s Midway London Division saw strong trading at the beginning of the year, thanks to an increase in tourists attracted by the favourable exchange rates. Despite Midway London Dividion’s downward trajectory, Varney stressed that over 70% of Merlin’s profits for 2016 were from outside the UK.