Gloss taken off Merlin Entertainments results by roller-coaster prosecution

Profits were virtually flat for Merlin Entertainments in 2015 despite a slowdown at its theme parks division following the Alton Towers crash in June, with a later announcement that the company was to be prosecuted for the incident taking the sheen off results.

The Health & Safety Executive said it would be prosecuting the company for breaching health and safety law, with two female passengers on the ‘Smiler’ ride suffered leg amputations and three others seriously injured.

As a result of the crash and resulting plunge in visitor numbers, sales declined 12.4% at Merlin's resort theme parks division on a like-for-like basis compared to the previous year. The company has since said the crash was down to 'human error'.

Chief executive Nick Varney said 2015 was a difficult year for the FTSE 100 company but stressed that Merlin had "sought to learn every possible lesson to help ensure there is no repeat of what happened".

Across the group, visitor numbers rose 0.3% as a continued strong performance from its chain of larger Legoland theme parks and solid trading from 'Midway Attractions' division's smaller parks like Madame Tussauds waxworks museums and Sea Life Centres helped lift revenue to £1.28bn, up 2.3% at the reported level and 3.9% at constant currencies.

With like-for-like sales increasing only 0.4% over the year, this showed the strong growth in revenue per capita.

Despite the challenges resulting from Alton Towers, Varney said the robust performance overall was helped by new openings, including seven new Midway attractions and an expanded accommodation capacity with the addition of 277 new rooms.

Varney announced new milestone targets for 2020 of 2,000 new rooms, forty new Midway attractions and four new Legoland parks, of which one in "either North America or China" will be added to the three previously announced in Dubai, Japan and Korea.

With adjusted earnings per share up 0.4% 17.8p, directors announced a final dividend of 4.4p per share, representing growth of 4.8% in the full year payout.

Also on Thursday, Merlin announced the investment of $34.4m in Big Bus Tours, a global owner-operator of Hop On Hop Off city tours, and the formation of a strategic partnership allowing further cooperation across many of Merlin's city centre markets.

Shares in the group rose as high as 456p, the highest level since December, before descending to 449.2p after the HSE announcement.