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Financial cost of Alton Towers crash

Alton Towers was closed for several days following last months rollercoaster crash.
Alton Towers was closed for several days following last months rollercoaster crash.

Alton Towers owner Merlin Entertainments expects annual earnings for its theme parks business to drop by as much as £47 million this year following last month’s rollercoaster crash.

The group said there had been “an adverse impact on trading at the start of the critical summer period” as a result of the accident.

The company said its financial performance for the full year would be impacted and said the incident could also hit results next year.

Underlying earnings for the theme park division are expected to fall from £87m in 2014 to between £40m and £50m this year, Merlin said.

Five people were seriously injured in the accident on June 2 which resulted in a four-day shutdown at Alton Towers.

Merlin also suspended UK theme park marketing and temporarily closed rides at two other sites in the wake of the incident.

“The combination of these factors has significantly reduced volumes at Alton Towers Resort and, to a lesser extent, the UK resort theme parks estate,” Merlin said.

The group added: “We have committed to support those injured as best we can and implemented additional safety protocols to be sure that a similar accident will never happen again.”

Merlin said it was now taking action “to rebuild momentum and re-engage with our customers”.

However, the group said that based on most recent trading and the “likely trajectory over the key summer trading period”, it was forecasting the fall in annual earnings compared with 2014.

Merlin 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.

“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.”

However, the wider group, which also operates attractions such as Madame Tussauds and Legoland parks, is expected to see pre-tax profits “broadly in line” with last year at £249m.