Alton Towers Crash Prompts £47m Profit Warning

The owner of Alton Towers expects its annual earnings to be as much as £47m lower following the rollercoaster crash at the theme park in June.

Merlin Entertainments issued a profit warning, saying full-year earnings for its theme parks division are expected to be between £40m and £50m, compared with £87m in 2014.

Five people were seriously injured when the Smiler ride collided with an empty carriage on 2 June. Two of the victims, Vicky Balch, 20, and Leah Washington, 17, had legs amputated.

The accident closed Alton Towers for five days and temporarily shut rides at two other Merlin-owned theme parks.

The group blames the profit warning on the significantly reduced visitor numbers at Alton Towers and, to a lesser extent, at its other UK theme parks, including Thorpe Park.

Merlin also indicated the crash could affect results next year as it struggles to rebuild its reputation.

In a trading update, the group said the crash had “an adverse impact on trading at the start of the critical summer period”.

“The magnitude of the financial impact is the result of both a significant reduction in revenue and the requirement to maintain an appropriate investment in customer service and marketing through peak season,” it said.

“Although difficult to assess at this stage, we believe that there may be some continued adverse impact on the resort theme parks operating group profitability in 2016.”

Nick Varney, Merlin’s boss, once again extended his sympathies to those injured in the crash.

“The accident at Alton Towers in June was a devastating event, for which we have accepted responsibility and are deeply sorry,” he said.

“We have been humbled by the grace and fortitude of those who were injured, and their families, and will continue to do whatever we can to support them.”

Despite Alton Towers being closed temporarily after the crash, overall visitor numbers to all Merlin-owned and operated attractions rose 1% to 27.7 million visitors for the first half of the year.

Mr Varney also highlighted the challenges, especially to London, of a subdued tourist market on the back of the weaker euro.

Merlin also operates Madame Tussauds and the London Dungeon attractions, which are popular with European tourists.

The euro has weakened to an eight-year low against the pound, meaning holidays to the UK are nearly 10% more expensive than last year for eurozone tourists.

Merlin shares opened 7% lower this morning, but are still 12% higher over the last 12 months.

Source: Sky News