Desire for days out defies downturn

MERLIN Entertainments – which owns the Edinburgh Dungeon, Alton Towers and Madame Tussauds – welcomed more than three million extra visitors last year despite the recession.

The group said total visitor numbers rose by 3.4 million to 38.5 million in the year to 26 December, as underlying profits rose 17 per cent to 238.6 million.

Chief executive Nick Varney called the firm "recession-resilient rather than recession-proof", but added: "People still demand quality days out and quality short breaks. Even in difficult times, you need somewhere to take the kids."

He highlighted the mix and location of attractions as a reason for the group's resilience. About 90 per cent of visitors to Alton Towers are UK residents, while about 70 per cent of customers at the London Eye are foreign.

Merlin, which is controlled by US private equity giant Blackstone, said like-for-like sales across the group were up 6.4 per cent to 769m after stripping out currency effects.

As well as the Edinburgh Dungeon, Merlin owns the Sea Life Sanctuary at Oban and the Sea Life centre at Loch Lomond.

A month ago, Blackstone was reportedly close to floating the business, but shied away from the 2 billion plans at the last minute due to volatile stock markets.

Other groups, such as US travel business Travelport and high street fashion chain New Look, also pulled public offerings.

Varney refused to comment on a revised timetable for a float but said the move "certainly remains a very, very big option for us".

Blackstone owns 48 per cent of Merlin and it emerged last month that sovereign wealth fund Dubai International Capital had sold two thirds of its 17 per cent stake in Merlin to the Kristiansen family, who own Lego.

Merlin, which currently generates just under half of its revenues in the UK, invested more than 100m in the business last year, including a relaunch of the London Aquarium.

While the group plans to open a new Legoland Discovery Centre in Manchester later this year, Merlin said it is focused on overseas expansion, with a Madame Tussauds in Bangkok and a Sea Life centre in Phoenix, Arizona, due to open this year.

The company is also developing further Legoland sites in Florida and Malaysia, which are due to open in 2011 and 2012 respectively.

Merlin was formed in 1999 following a buyout of Vardon Attractions and became majority-owned by Blackstone in 2005.

The group grew rapidly by acquiring the Legoland parks in 2005, Gardaland in Italy in 2006 and the Tussauds group the following year, increasing the size of the group ten-fold within three years.

The company now has 60 attractions in 13 countries.