Alton Towers crash prompts £40m profit warning

Merlin Entertainment has issued a profit warning, saying its full-year earnings will be between £37m and £47m lower after the Smiler ride collision, which left five people seriously injured.

It had initially been expected its annual earnings to total £87m, Sky News reports.

The June 2 accident closed the theme park for five days and temporarily shut rides at two other Merlin-owned theme parks.

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

In a trading update the group said: “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.”

The trading update also indicated continued adverse impact could continue into 2016 as the group struggles to rebuild its reputation.

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 for five days after the crash, overall visitor numbers to all Merlin-owned and operated attractions rose 1 per cent 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 operates Madame Tussauds and The London Dungeons 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 per cent lower this morning, but are still 12 per cent higher over the last 12 months.