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Alton Towers 2011 Profits - sharp fall

Jonathan

Jonathan

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Taken from Ride Rater:

Alton Towers recorded a 76% drop in profits during the 2011 season, recently-filed accounts show.

The resort, which operates as a division within operating group Merlin Entertainments, recorded pre-tax profits of £1.13 million.

2011 was the first year in recent memory that the park featured no new rides or attractions, with 2010 and the opening of the Thirteen rollercoaster generating £4.8 million in profits.

This year has seen a number of operational cutbacks at the park, including a reduction in park opening hours.

The SW7 rollercoaster, which will open next year, is reported to be costing between a 18 and 20 million pounds.
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This doesn't surprise me at all, and I think it can largely be attributed to the fact that there were no new additions to the resort other than the crabs in Sharkbait Reef. Will 2012 be any better? I hope so, although I'm not very hopeful, despite the additions of Sub-Terra and Ice Age.
 
I'm not really sure it was down to lack of 2011 additions. Personally I wouldn't be surprised if it was down to a disappointing 2010 not really giving people any urge to rush back in 2011.
2010 was the start of the downward spiral for me. The park was starting to look messy. Thirteen had breakdowns on most of my visits, if it wasn't completely shut.
This certainly explains the seeming desperation to try and make as much money as possible without showing much care for guest experience of the last year or so.
Hopefully it will turn around so that they can focus on what they should be I.e. running the UK's premier theme park.
 
Starbucks are not profitable either....

Neither are Amazon apparently etc etc, gosh, I wonder why these firms even bother opening at times.

These wonderful benevolent businesses, all working just for our benefit.

That sarcasm is not aimed at the two above posters I want to add. You will want to drill deeper down into those figures, find when payments needed to be made, what "Merlin" charged Towers for service wise and all sorts of things.

It is no secret Merlin detest paying tax in this Country. If they don't get there way, owned by Venture Capitalists, expect to see more questionable practices in accounting.

Legal, yes - straightforward? No.
 
Also now that all the theme parks are one group they will likely move funds around to balance funds, a lot of Towers cuts this year are to help with the shortfall from Thorpe. Last year it was Garda that was struggling.
 
I think a sharp fall from 2010 to 2011 is a completely different thing to the situation regarding Starbucks. Starbucks lack of UK profit is part-manipulated and part due to their aggressive expansion.

Alton Towers' fall in profits is probably attributed to a lack of new attractions in 2011 to draw people to the park. A lot of people go because of something new - regardless of what it is. We also know that the theme park division of Merlin is by far the least profitable.

It is, however, encouraging that the park posted a profit still.


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Europa had an even better 2010 (with very small additions) than 2009 (when Blue Fire opened) because Blue Fire was so good, people went back to ride it again the year after, and took their friends.

Alton's problem is that anyone can attract loads more visitors the year they open a new coaster (2010). But the key test is whether those people come back to ride it again in 2011, and that depends on if it's any good or not. Th13teen wasn't, and the people didn't come back.
 
Advertising an entrance price of over £40 per adult and £6 to park isnt going to attract the punters either!!
 
This isn't entirely true as the nature of the reporting the 2011 accounts are completely different to the 2010 accounts. They became agents of Merlin 31/12/2010, and so the following financial year is not a like-for-like comparison
 
The resort is still massively profitable, it's they have to pay millions in loans back to the Merlin group and multiple banks each year, which means the bottom line always looks bad.
 
There you go, pretty much every post in total agreement.

Fudged, not floundering.

If you're the guy in charge, want to pay as little to the Government as possible, you maneuver your businesses as such.

What's more you had the added bonus of an excuse to squeeze the park's bottom line even further, and execute price rises in stealth format across all divisions.

Sound familiar?

Whoo-hoo Merlin, you corporate legends you!

Seen it a million times before.

EDIT: Haydn you seen those figures somewhere, I'd love to comb through them babies and see how much Merlin charges Merlin for stuff.

Mr Brightside, yes it is very similar to Starbucks, because Merlin are also aggressively expanding and investing in capital, as Varney himself has attested in multiple business rag interviews! I'm not going to debate this one endlessly as it's out there everywhere and very easy to find.
 
I would imagine they would be after no new attraction, a sense of disappointment in Th13teen, and downturn in the economy.

Couple that with price rises, stealth rises, general pressures it's a natural low year for any business. It would be very interesting though, to find the actual gate figures.

It'll all be in the minutia.
 
Gate figures where down in 2011 but only back to the previous non-SW Year. The differences in reporting the figures will make a difference and Towers wasn't the worst park in 2011. It's rumoured Garda did terrible in 2011 despite having Raptor.

One thing to note is a lot of debt is stuck on Alton Towers name. Though I imagine the 2012 figures will be more worrying as well as the PR damage this year.
 
The change is based on a like-for-like comparison that they make to the 2010 figures in their accounts, so the drop in profits is certainly worth highlighting - the rest of the elaborate and deceptive rubbish is not. The headline figures may be misleading, but the drop exists.

The park's attendance fell by 300,000 guests in 2011 so it was obviously not a good year for them and as we have seen this season, they feel the need to make even further savings with operational cuts, even if it means risking a backlash.
 
Tom said:
The park's attendance fell by 300,000 guests in 2011 so it was obviously not a good year for them and as we have seen this season, they feel the need to make even further savings with operational cuts, even if it means risking a backlash.
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Dave said:
Gate figures where down in 2011 but only back to the previous non-SW Year. The differences in reporting the figures will make a difference and Towers wasn't the worst park in 2011. It's rumoured Garda did terrible in 2011 despite having Raptor.

One thing to note is a lot of debt is stuck on Alton Towers name. Though I imagine the 2012 figures will be more worrying as well as the PR damage this year.
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Those two quotes suggest two different results entirely. I must say I'm tempted to sit with Dave on this one, because the figures being down a year after a major attraction - you revert to year prior, and if those gates are accurate then 2010 was a higher than average year, with 09 being the standard benchmark for a non attraction year. So the "drop", is not a drop, it's a "revert to normal".

Take for example the olympics in London, bars takings last July, this July, next July - it will be known, this July will have higher than normal, due to a special event. Therefore whilst technically a year on year loss, it is actually just a balancing of normal demand.

So saying gate figures are "down", isn't technically correct, unless they fall below '09 levels.

Moving figures, change in structure, I don't buy into this "loss" at all. Had enough experience in business over the years to lead me to this.

Also, who can blame them! If you have one real let down (Gard as suggested) of course you are going to leverage against other parks. Frankly you'd be an idiot not to. All points to this "downturn" being a shunting around of numbers, and little consideration of what "normal" trade is considered.

It's when you get past all that, that you discover the real detail, that's absolutely without question. It's fundamental business practice.
 
Which can easily correspond with the profit dropping that percentage. Remember, the park has a LOT of high fixed costs. The topped up guests in 2010 could have been pure profit.

Regardless of whether it's "revert back to normal" or not, it's a drop. If the park is making £1m PRE-TAX profit a year, then that's really not great.
 
Yes but the PRE-TAX profit will be post cash moving/loans/licensing etc.

How does SW6 payments factor in for example? How was that financed? Are there interest payments to Merlin?

Something is paying for Merlin's rapid expansion.

From my experience, nothing would lead me to believe that figure is a true account of Alton Tower's performance.

I also think that a 10% reduction in gate figures, does not equate to a 75% reduction in pre-tax profit, which is what these figures suggest.

Those figures don't add up, not even close. They do however create headlines about raising prices and arguing against VAT.

Doesn't make sense.

The headline profit drop does not stand up in real terms to even the remotest scrutiny.
 
TheMan said:
The headline profit drop does not stand up in real terms to even the remotest scrutiny.
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It's just about the only thing that does, actually. It's gauged in the same way that it was last year, so the fall as percentage is accurate. Now if you're talking about their bottom line (among other things in the accounts), then yes that's rubbish as they'd be operating at a £2m loss if you believed that.

Most newspapers and news outlets etc report a company's pre-tax profits and little else, because it's prior to all the jiggery and manipulation companies do before they claim their bottom line after tax and cash shifting etc.
 
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