Merlin Entertainments: General Discussion

[MaxPower]

It's the curse of a demand for perpetual growth at all costs.

I don't know how it works within Merlin but at our company we have Cost Saving Managers who's sole role is as it sounds, to save £X over the course of X number of months at the expense of everything and everyone else within the business.

 

[Benjsh]

Breakdown of overall group revenue of £2.06bn.

- Theme parks (not including Legoland) = £429m or roughly 21%

- Midways - £751m or roughly 37%

- Legoland parks - £869m or roughly 42%


It's easy to see why they have invested into two further Legoland parks over recent years with even more still to come. They clearly make a lot of money from that brand. The problem is these two latest offerings in New York and Korea have been a complete and utter financial disaster with attendances way below what they were anticipating. This has only added to the previous flop of Legoland Dubai which is like a ghost town 90% of the time. So out of the 10 Legoland parks it's really only a select few that are hugely profitable and doing a lot of the heavy lifting.

 

[NuttySquirrel]

I'm quite curious to know how Merlin apportion the revenue generated from MAP sales as it must represent a fair portion of the income generated by the theme parks.

So far this year I've used my MAP to visit Alton Towers and a regional Sea Life centre. How do they know if I bought the pass primarily to attend theme parks or for medway attractions? And thus how can they accurately establish the profitability of either as a result?

 

[Tom]

Find those profit figures questionable, given that they lost £200 million last year. More likely to be EBITDA, and compared with last year's £622 million.

 

[Funcone]

Find those profit figures questionable, given that they lost £200 million last year. More likely to be EBITDA, and compared with last year's £622 million.

I'm not a finance person, but I agree that this presumably isn't what most people think of as profit. £573 million profit on a £2.06 billion turnover would mean a profit margin over 25%. Even if Merlin were doing well, I don't think the theme park industry normally delivers those kinds of margins.

 

[Benjsh]

Operating profits before investments was how I read it.

They invested over £300m last year alone so the overall net profit wasn't £573m. It was more like roughly £200m.

 

[Tom]

Official report isn't out on the website yet, but suspect it is earnings not profit.

 

[GooseOnTheLoose]

Official report isn't out on the website yet, but suspect it is earnings not profit.

Specifically, it is underlying adjusted profit, not EBITDA.

Merlin recorded an underlying adjusted profit of £573 million for the year to December 28, down 15.1 per cent on the year before, amid higher operating costs and continued investment into its portfolio.

EBITDA provides a view of a company's operational profitability, excluding the impact of financing, taxes, and non-cash accounting charges. It isolates the earnings generated from core business activities.

Underlying adjusted profit aims to present a normalised view of recurring earnings. It extends beyond EBITDA by removing non-recurring or unusual items, offering a clearer picture of sustainable profitability.

I'll agree they are similar, but underlying adjusted profit tends to be more refined.