not sure track record so good and so would not take this comment too seriously
Sell Merlin before private equity do: Merlin Entertainments, the Owner of Alton Towers and Madame Tussauds, said that it had enjoyed like-for-like revenue growth of 6.7% during the third quarter. Merlin Entertainments increased group like-for-like revenue by 6.7% during the third quarter, a slowdown from 8.1% like-for-like revenue growth during the first half. Market consensus is for full year, pretax profits of £233 million, on revenue of £1.24 billion, giving 16.7p in earnings per share. Questor thinks that Merlin shares at 350p are far too expensive – trading on 21 times forecast earnings, falling to 19 times next year – for a company where revenue growth is slowing. Questor believes there is another problem hanging over the shares. The sale looks like a classic private equity exit. Private equity firms run funds that typically have a 10-year life span: they invest in assets such as Merlin for five years then sell during a five-year period. Blackstone invested in 2005 and CVC invested in 2010. Since 2010, Blackstone has already reduced its Ownership from 52%, and Questor thinks both private equity Owners are not in for the long haul. The other thing that concerns Questor is that, in addition to slowing revenue growth, cash generation is falling. Cash generated from operations was down £7 million to £140 million during the first half ended June 28. Once spending on the parks of £104 million and interest payment of £32 million are subtracted, the company only generated £4 million in free cash. There is also a rather large pile of debt. Net debt was £977 million on June 28, and putting that in perspective it is more than shareholders’ funds of £960 million. Questor believes this is an overvalued, low growth, private equity exit that investors should sell. Merlin Entertainments at 350.6p+10.1p Questor Says “Sell”.
20 Aug '14
on here, is it shock? Why has this fallen so very much? Has there been loads of shares dumped or what? Never any news, yet something is clearly going on.
14 Aug '14
for decades, yet the share price sliding out of view?
1 Aug '14
Merlin Entertainments warns unrest will hit Thai earnings: Political unrest in Thailand damaged Merlin Entertainments’ two Bangkok attractions and will suppress revenues for the rest of the year, the theme park operator said.
16 Jul '14
RE: big fall today
might have something to do with Harry Potter. Having said that there are enough kids begging to be taken to Merlin parks, so expect this to be hitting the 374-380 mark soon enough. Just a hunch as always..
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