Record visitor numbers help boost Merlin Entertainments

(Sharecast News) - Merlin Entertainments reported a jump in full-year revenues after visitors flocked to its theme parks and attractions.The owner of Madame Tussauds, Legoland and Alton Towers said 67m people came to their attractions during 2018, a record higher and 1.4% improvement on the previous year. That helped revenues grow 5.9% to £1.69bn while underlying earnings rose 4.3% at £494m.Pre-tax profits were ahead 4.9% at £285m.Its resort theme parks division saw organic revenues rise 9.1%, helped by favourable weather and a strong Halloween period. Legoland Parks organic revenue increased 6.4% after more hotel rooms were opened, helping to offset a broadly flat like-for-like performance.Nick Varney, chief executive, said: "2018 saw improved momentum across most of our businesses reflecting the strength of our diversified portfolio and geographic spread."We continue to seek to mitigate external cost pressures and expect to deliver up to £35m of annualised savings by 2022 through a number of initiatives."Our continued investment, new market opportunities and our evolving position as unique, multi-format international operator of strongly-branded entertainment...gives us the confidence that we are well placed to deliver long-term growth and returns."Looking ahead, Merlin said it was making "continued progress" towards the construction of Legoland New York, scheduled to open in 2020, and had reached an agreement to open a Legoland in Korea by 2022.It added: "Trading at this seasonally quiet point in the year has been in line with expectations. Our 2019 outlook is positive and unchanged."Anna Barnfather, analyst at Liberum, said: "This is a seasonally quiet time of the year but Legoland is expected to enjoy a boost from The Lego Movie 2 and associated new attractions. Forecasts for 2019 as based on 2.6% like-for-like sales growth and are unlikely to change at the operating level, but could rise around 4% at the profits before tax line if low financing costs are rolled forward."Ivor Jones, analyst at Peel Hunt, said Merlin's shares were trading at a price/earnings ratio of 17.6x. "While this is not cheap, we believe it is good value for a global business with a multi-year growth plan underpinned by key brands, and we reiterate our 'buy' recommendation."Shares in Merlin were ahead 3% at 362p at 1100 GMT.