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The Sinking Ship: (Un)Love Letters to Merlin
Matt N
TS Member
Sorry if this is in the wrong thread, but I just wanted to ask whether any investor presentations have come out recently indicating where 2019's major CAPEX is going in Merlin's RTPs branch? The company's 4 year CAPEX cycle would indicate that Gardaland is due a major investment, but there don't seem to have been any sort of rumours for Gardaland 2019, and I haven't heard of any signs of construction at Garda yet, and that would normally have started by now for a major investment. Although I suppose Ghostbusters at Heide was a major investment, and no major construction for that took place until late 2016. Speaking of Ghostbusters at Heide, does anyone know how much was spent on that, because that might give us a good idea of the sort of cash Merlin are now willing to spend on major attractions?
Also, isn't Colossos' retrack at Heide a major investment? I know it's costing quite a lot of money, but I'm not sure whether Merlin are only dedicating 2019's money to Heide or whether another theme park will be receiving it too.
By the way, if you're wondering what I mean by investor presentation, I mean a part of one of Merlin's quarterly PowerPoints that says where the CAPEX is going over the next two years. For example, I think one was released in September 2015 that said something like this:
CAPEX investments until 2017:
2015: Gardaland
2016: Thorpe Park
2017: Chessington/Heide Park
P.S. Sorry if this post sounds rude at all.
P.P.S. I am aware of the Haunted House coming to LLW next year, but aren't the LEGOLAND parks on a completely separate CAPEX cycle to the RTPs?
Also, isn't Colossos' retrack at Heide a major investment? I know it's costing quite a lot of money, but I'm not sure whether Merlin are only dedicating 2019's money to Heide or whether another theme park will be receiving it too.
By the way, if you're wondering what I mean by investor presentation, I mean a part of one of Merlin's quarterly PowerPoints that says where the CAPEX is going over the next two years. For example, I think one was released in September 2015 that said something like this:
CAPEX investments until 2017:
2015: Gardaland
2016: Thorpe Park
2017: Chessington/Heide Park
P.S. Sorry if this post sounds rude at all.
P.P.S. I am aware of the Haunted House coming to LLW next year, but aren't the LEGOLAND parks on a completely separate CAPEX cycle to the RTPs?
I read somewhere online a few days ago that a new coaster was planned for Gardaland for 2019, was rumoured to be something similar to verbolten at Busch Gardens. However that project has apparently been dropped with the money being diverted to Heide Park for Colossus. Not sure how true this is or where that leaves Gardaland’s next major investment.
Each park get different budgets for each investment ie Chessington get much smaller budgets than Alton get.
Each park get different budgets for each investment ie Chessington get much smaller budgets than Alton get.
Sauron97
TS Member
They choose what a 'large' investment is, that's the problem. And they have repeatedly played around with their CAPEX so I don't think it's particularly meaningful anyway. I hope one day @Matt N that you develop the same disdain for Merlin and their terrible business model as some of us 
I'm glad you've noticed this though, it's a good start
I'm glad you've noticed this though, it's a good start 
imanautie
TS Member
They could in theory say £1 to replace a certain doorbell is large capex spending...They choose what a 'large' investment is, that's the problem. And they have repeatedly played around with their CAPEX so I don't think it's particularly meaningful anyway. I hope one day @Matt N that you develop the same disdain for Merlin and their terrible business model as some of us
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Matt N
TS Member
I don't think Merlin's business model is bad. In fact, it's very good that all of the company's RTPs get major investment every couple of years. It's better than companies like Six Flags and Cedar Fair, where the flagship parks (e.g. SFMM, Cedar Point) prosper, with major investments every 2 years, and the smaller properties (e.g. Great Escape, Michigan's Adventure) have not seen major CAPEX in over 10 years. I'm sure those parks will get major CAPEX eventually, it's just that I think they've gone a bit too long without major CAPEX.I hope one day @Matt N that you develop the same disdain for Merlin and their terrible business model as some of us
Anyway, on the subject of Gardaland 2019, if it is still a major year, I reckon a heavily themed GCI wooden coaster, sort of like Wicker Man but bigger, would be a good fit. It would be a great ride, it wouldn't cost too much to build, and it would even give Merlin the USP of "Italy's only wooden roller coaster" to use in marketing!
Rick
TS Member
The way the company was built mean that it was almost inevitable.
imanautie
TS Member
Rick
TS Member
Blackstone were a key player, as were CVC and obviously KIRKBI, by default.
Public doesn't = evil, as it were - but it does force you to live and exhibit certain behaviours, some of which that do not go particularly hand in hand with this industry.
I get the whole 'never go public' argument but it really doesn't stack up.
imanautie
TS Member
Kirkbi still own 29.9% of merlin so at least there's some rational voting but not much.
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Rick
TS Member
Exactly, but the very idea that Kirkbi aren't wanting maximum return is laughable too. They have a diverse portfolio for a reason.
imanautie
TS Member
I'm more thinking they would want to ensure the Lego brand stays high in he public mind, but I assume Lego as have a pull out clause in their contact with merlin as a safety measure.
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Rick
TS Member
They could sell, but that wouldn't be advantageous at the moment - (depending on what they acquired their slice of the pie for) and for control reasons too.
As I recall, if a specific park within LLP hit rock bottom in terms of guest experience, they have a grace period to fix it. If they still don't fix it, they have to remove all traces of Lego and (I assume) it would transfer into RTP. Additionally, if Merlin was acquired by a Lego competitor that causes complications.
I though it was a management buyout funded by some dodgy venture capitalists? Didn't blackstone come in later?
Rick
TS Member
The initial MBO was funded by Apax, but Merlin becoming the Merlin we know today (involved in the theme park industry) was all Blackstone. They funded the Legoland purchase and subsequent purchases (Garda, Tussauds etc).
Rick
TS Member
Apax = lots of fish and two dungeons. Blackstone = global empire.So that's a yes then?
(Yes
)
Matt.GC
TS Member
Yes.
I've now set my sell of at 380p and I must admit I do wish I'd got out a few weeks ago, but like a contestant on Deal or No Deal, I got greedy but such is the stock market.
But I don't think ruining Towers is a deal breaker for Merlin, its a big group in which Alton Towers isn't really as significant as you may think, hence why they can afford to treat it in the way.
I still think the shares are undervalued, although there will be no "recovery" back to the good old days. Merlin better get used to their share price starting with a 3 as I think that's the new norm.
What I need is another marketing led half year full of bullshit yuppy phrases like "thinking outside the box" and "synergies" to give the price a little shot in the arm. Its certainly not a stock that I'd advise anyone to carry into into 2019 anyway.
Rick
TS Member
@matthewgcole Hold out for 400p old boy, it'll come.
Altonadvocate1
TS Member
Really tempted by one of those Mononoploy boards, but have they fully themed them?
Chance card - You arrive at AT to find it closed today. Waste 70 pounds on petrol.
You arrive in the park, but most of the rides are closed. Go directly to guest services. Do not pass go, do not collect 200 pounds.
You heard before your visit that most of the eateries apart from the Burger Kitchen are closed. Bring you own food, Save 50 pounds rather than giving it to Merlin entertainment.
Community Chest - You built far too many lodges and hotels for your guest offering and most of them are empty. Mothballing costs 200 pounds per night per lodge, 2000 pounds per hotel.
Top Trump's next!
Chance card - You arrive at AT to find it closed today. Waste 70 pounds on petrol.
You arrive in the park, but most of the rides are closed. Go directly to guest services. Do not pass go, do not collect 200 pounds.
You heard before your visit that most of the eateries apart from the Burger Kitchen are closed. Bring you own food, Save 50 pounds rather than giving it to Merlin entertainment.
Community Chest - You built far too many lodges and hotels for your guest offering and most of them are empty. Mothballing costs 200 pounds per night per lodge, 2000 pounds per hotel.
Top Trump's next!