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Merlin Reducing Capex Spending 2018-2021

It baffles me how the current board of directors keep their jobs, putting aside my distaste for the way they are ripping apart the product (which I do think long term effects profits), they seem on the whole incredibly incompetent.

They oversaw a period where a theme park was allowed to avoid some basic safety practices that allowed a roller coaster to crash.

They allowed Chessington to deteriorate its infrastructure to a point where a child could fall through a fence resulting in serious injury.

They have taken what was a profitable resort theme park business and stagnated growth.

Investors are not idiots, they could read through the BS that Varney spouted about the blame laying with terrorists, the share price is faling as they have no confidence in the companies leadership.
 
Merlin's share price seems to be heading one way at the moment and that is down. They can cite weather and terrorism all they want but surely, deep down, they must realise the true reasons for their failings. And in my opinion their current strategy will only result in poorer results going forward and a further demise in their beloved share price.

If I was a major share holder I would be asking big questions of the board. Why do they think that continuing with their failing strategy will improve business?

:)
 
As Merlin have a large amount of debt, I wonder how that will affect them with the rise in interest rates? I guess that they have refinanced the debt this year (Cant be bothered looking in their financial report), but going forward the increasing rates may impact in future years.
 
Rob said:
If I was a major share holder I would be asking big questions of the board. Why do they think that continuing with their failing strategy will improve business?

:)
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It's because they've painted themselves into corner. They've spent money and wasted it, they have to deliver similar operating profits every year now without much to invest and with parts of their business in decline. Hence the "quick! Knock up some high margin accommodation" knee jerk strategy from the interims.

Major shareholders will look for the exit when they think that every strategy to consistently deliver that figure every year has been exhausted. Early indications are that this could possibly be within the next couple of years.
 
Merlin need to get back to basics, so often a companies downfall comes after they expanded into other areas and tried to push new, expensive and unknown trends on customers.

They do rollercoasters and flat rides reasonably well, they have the re-rideability factor and are generally popular, that's where their bread and butter lies, but they seem to have forgotten that by introducing actor led experiences which have absolutely no re-ride factor at all, even the sea life's get boring after the second or third walk through, there also appears to be a disturbing trend of employing kids to be in charge of new attractions and naturally they will go with what they want or what they think is right all the while having no experience to actually be able to impartially decide whether their next great idea is a realistic proposition in the real world or not.

Merlin have bought this upon themselves and the sooner they realise this and re-employ all the older experienced staff they made redundant who knew what they were doing and get rid of the fast track university graduates with illusions of grandure the better.
 
Merlin need to look at themselves in the mirror.

Their entire resort theme park operation is flawed. The way they promote discount cultures, the way they add rides nobody actually wants, the way they don't offer entertainment, they way they homogenise food and beverage, the way they treat staff. The list could go on.

Truly - they are awful. I think the abuse they get on forums like this is wholly justified.
 
IanSR said:
Merlin need to get back to basics, so often a companies downfall comes after they expanded into other areas and tried to push new, expensive and unknown trends on customers.

They do rollercoasters and flat rides reasonably well, they have the re-rideability factor and are generally popular, that's where their bread and butter lies, but they seem to have forgotten that by introducing actor led experiences which have absolutely no re-ride factor at all, even the sea life's get boring after the second or third walk through, there also appears to be a disturbing trend of employing kids to be in charge of new attractions and naturally they will go with what they want or what they think is right all the while having no experience to actually be able to impartially decide whether their next great idea is a realistic proposition in the real world or not.

Merlin have bought this upon themselves and the sooner they realise this and re-employ all the older experienced staff they made redundant who knew what they were doing and get rid of the fast track university graduates with illusions of grandure the better.
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That's a very accurate assessment of where they're at. It seems like the business has sought new ideas from eager, cheaper new blood keen to make a name for themselves.

As a result, we ended up with likes of DBGT, a project of great imagination that would have looked dead sexy on a PowerPoint presentation but would not have made it through had a wise and experienced voice of reason been at the initial pitch session to shine the light of reality.

This is a company that allowed the made up yuppie buzz word "synergy" to be published in official business plan documentation released to investors.

I'm sure there are tonnes of Excel spreadsheets , "listening group" pie charts and colour coded graphs being produced in Poole by 24 year old Cambridge graduate 'Brad' to prove the "thinking outside the box" point he wants to make about the way the business should go.

But in reality the company has forgotten how to run its core business properly. It's a business that knows what it does, but doesn't know what it exists for. As boring as it sounds, it needs to take a step back and focus on the day job, boring stuff such as reviewing opening hours, cleaning, trimming hedges and not crashing roller coasters.
 
matthewgcole said:
That's a very accurate assessment of where they're at. It seems like the business has sought new ideas from eager, cheaper new blood keen to make a name for themselves.

As a result, we ended up with likes of DBGT, a project of great imagination that would have looked dead sexy on a PowerPoint presentation but would not have made it through had a wise and experienced voice of reason been at the initial pitch session to shine the light of reality.
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Part of the appeal of DBGT for the company, is that it took the approach of the midway attractions and added it to a theme park context. DBGT really is just a mini-midway attraction within a theme park; actors, special effects, photo-point opportunities, elaborate gift shop...

Of course, they didn't think it through, resulting in a ride that is essentially it's own division within a theme park, and one that's already having huge cuts pressed down on it. Absolutely fascinated to see what sort of state it's in within a few years.
 
I'm normally a very optimistic person, but I don't see DBGT lasting 10 years before it at least has a major technology upgrade.

On the whole, Merlin took a gamble with DBGT that hugely backfired on them. They thought when they were developing it that VR, some other fancy technology and Derren Brown's name would get people flowing through the turnstiles. But unfortunately, the ride was delayed by 2 months due to glitches, received very mixed reviews upon opening, was massively unreliable in its first season and failed to increase guest figures at all in 2016. Whether it still is unreliable now after the Rise of the Demon revamp, I don't know. I hope so considering I did read somewhere that Rise of the Demon alone set them back £11m. Add that to the rumoured £30m that was spent on it initially and you have an overall spend of over £40m. Just think about that for a second. 40 million pounds. They could have bought two decent size B&Ms with some decent theming with that money, considering Swarm as a whole project cost £20m. I will praise Merlin, however, for taking a risk with DBGT.

On a side note, does anyone actually know how much DBGT cost? Because on Wikipedia it says £13m sourcing a Financial Times article, on someone's blog it says £24m and all the enthusiasts are tossing around £30m.
 
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10? LOL I give it another year before it either has that or is mothballed.

They were 3-5 years too ambitious with the project.
 
It already has reduced opening. Soon it'll only be opened weekends, then only open weekends peak season. Then the actors will dissappear and it'll be about 3 standard blue TP uniformed staff operating the whole thing.

I don't believe the £30 million rumour at all. But going by how ridiculously expensive it is to run, how shocking unreliable it is and the fact it's in a park where it won't be appreciated anyway, even the lowest estimated figure would make it a waste of money.
 
I think that it's a real shame that DBGT turned out how it did, because in 2015, I had real optimism for it. In fact, me and my sister had a little theory as to how the ride would turn out. We thought that the ride would be themed to Jack the Ripper due to the Victorian-style building exterior and the fact that the project name was Project Whitechapel or WC16 abbreviated, with Whitechapel being the region where Jack the Ripper was from (I believe?). We thought that the ride would be very Hex-esque in that it would have told the story in a very compelling, dramatic way. Of course, it would have had a tracked ride system instead of a Madhouse, but it would have followed the same sort of non-fiction premise as Hex. We even thought that our rumour had some ground when an Airgates article came out about the ride's theming being "borderline offensive" in August 2015.
 
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