Merlin posts summer growth despite struggling Midway

(ShareCast News) - Leisure operator Merlin Entertainments posted a trading update on Thursday, outlining its performance over the key summer period.The FTSE 100 firm saw 10.7% total revenue growth across the group, or 3.7% at constant exchange rates.Of that, Midway Attractions and Legoland Parks both grew 3.7%, and Resort Theme Parks saw a 4.5% rise in revenue, all at constant exchange rates.Actual growth at Midway Attractions was 9.2%, with Legoland Parks up 13% and Resort Theme Parks revenue 10.2% higher.On a like-for-like basis, however, Midway's revenue shrunk 0.4%, while Legoland Parks grew 2.2% and Resort Theme Parks added 3.0%.The board put the like-for-like decline at Midway down to "ongoing difficult trading" in certain key markets within the operating group."Merlin continues to deliver overall revenue growth despite challenging trading conditions in certain key markets, testament to a diversified portfolio and a strong new business development strategy across all three operating groups," said Merlin CEO Nick Varney."Trading across the existing estate has been mixed."Our Resort Theme Parks operating group is now showing year on year revenue growth, reflecting the ongoing recovery in trading at Alton Towers."Varney said London was continuing to suppress overall trading performance in the Midway group, as the board is yet to see any significant benefit from the depreciation of sterling, while the growth in Legoland Parks reflected a tough comparative period in 2015 and a more challenging market in Florida."On Tuesday we were fined £5m for a breach of the Health and Safety at Work Act related to 'The Smiler' incident at Alton Towers in June 2015."From the beginning the company has accepted full responsibility for the accident and strived to support all those injured in every way possible," Varney said."We have learned every lesson from what happened last year and made a number of technical and procedural improvements to make sure that an accident like this cannot happen again."He said both the judge involved and the Health and Safety Executive acknowledged Merlin has a good overall track record in safety, and the board remained committed to achieving the highest standards in this area."In February of this year, we set out our new business development milestones for 2020."As previously stated, we continue to make good progress against these in terms of both new openings and pipeline development."Varney explained that as a result of the milestones, the board was announcing the pilot of a new, internally developed brand 'Little Big City'.He said it is an "imaginative recasting" of the popular miniature world attraction format."Launching first in Berlin in 2017, 'Little Big City' will be the new and interactive way to experience a city's history, culture and individuality, using a unique combination of traditional and modern special effects, storytelling and model cityscapes."The successful launch of this new brand will create further optionality within the Midway roll out programme to support the delivery of our 2020 strategic milestone of opening an additional 40 Midway attractions," Varney added.