The firm operating some of Blackpool’s biggest attractions says it could take 18 months to recover financially after a major rollercoaster crash earlier this year.
Five people were seriously injured when carriages collided at Merlin’s Alton Towers theme park last month, shutting the attraction for four days in the process, and halting all marketing.
At the end of the day we have had one accident in the history of this company. I think, hopefully, people believe we have been responsible in the way we have acted
The group has warned it expects revenues to be £50m down– but revenues at its Blackpool attractions will remain in line with last year.
Merlin operates Blackpool Tower, the Blackpool Dungeon, Sea Life Centre and Madame Tussauds in Blackpool.
The group said the accident had “an adverse impact on trading at the start of the critical summer period” as it marked down earnings expectations from its theme parks division for this year to £40m to £50m, from £87m in 2014.
A £40m result would represent a £50m shortfall on the £90m-plus figure the City would have been expecting.
Merlin added that the there may also be “some continued adverse impact” on its theme parks’ profits into 2016. Shares dived by as much as 9 per cent in early trading but later pared back some losses.
Chief executive Nick Varney declined to spell out the precise impact of the crash on visitor numbers at Alton Towers but said there had been “a substantial reduction in what the park was doing prior to the accident”, plus a lesser hit to Thorpe Park.
Mr Varney said promotional efforts to regain momentum had not been “moving the dial” enough but brushed off the question of whether Alton Towers might ever need to be sold off or closed down.
“I don’t think there is any danger of that whatsoever. Alton Towers is a highly successful business. The truth of the matter is that the biggest factor in this is the momentum.
“Just at the point when we should have been going at full throttle, effectively stopping the engine, and doing the things we have to do.”
He said there had understandably been safety concerns.
But Mr Varney added: “At the end of the day we have had one accident in the history of this company. I think, hopefully, people believe we have been responsible in the way we have acted.
“In 12 to 18 months’ time I believe Alton Towers will be back where it was.”
He said that investigations into the accident continued and a decision on the future of the Smiler rollercoaster where it took place would be made “in due course”.
Mr Varney said Merlin was “deeply sorry” over the crash, which he described as a “devastating event” and would continue to do what it could to support those who were injured and their families.
He said shutting down the park and suspending rides at other sites had been “the right course of action reflecting the seriousness of the incident”. New safety procedures had been implemented.
The wider group – which includes its Blackpool attractions – is expected to see profit before tax “broadly in line” with last year at £249m this year after savings in financing and other costs.
The statement from Merlin came ahead of half-year results due to be released on Thursday, showing visitor numbers across the group up to 27.7m compared with 27.5m last year.
But pre-tax profits for the six-month period ending June 27 were 10 per cent lower at £36m.
Total revenues grew to £544m as like-for-like sales rose 2.8 per cent but the theme parks division saw a like-for-like fall of 2 per cent