Alton Towers owner confident of meeting 2017 targets as profits beat expectations

Merlin Entertainment, the owner of Madame Tussauds Museum and Legoland, said it was confident of delivering growth in 2017 after performing in line with expectations in the latest financial year.

In the 12 months to 31 December, the group reported a 3.4% year-on-year increase in pre-tax profit to £277m ($340.2m), in line with analysts' expectations. However, when discounting the impact of currency movements, profits declined due to "challenging trading conditions" in a number of key markets, which were not fully offset by the cost mitigation actions the firm took throughout the year.

Meanwhile, revenue rose 11.7% to £1.46bn, but the rate of growth moderated to 3.6% on a constant currency basis.

The positive performance was testament to Merlin's decision to expand its operations, the group said, adding over 70% of profits came from outside of the UK.

The company, which also owns the Alton Towers theme park, said its Resort Theme Parks division continued to recover, while its Legoland Parks enjoyed steady growth, meaning the group has made good progress towards achieving the goals it set for 2020. Five new Midway attractions have opened, while the accommodation offering expanded and the company opened its first attraction in the Middle East by opening Legoland in Dubai in October last year.

However, the group added the external environment remained challenging "in a number of our key markets", although the impact of was offset to some degree by cost control measures taken during the year.

"As we move into 2017, with ongoing volatility in a number of our markets and continued cost pressures, we will increase our focus on cost efficiency and productivity, while continuing to invest in our product," said group chief executive Nick Varney.

"We continue to be excited about the long term growth opportunities for Merlin. Whilst we are planning prudently, we remain confident of a good performance in the year ahead."

In April last year, the company, pleaded guilty to breaching health and safety standards following the Smiler roller coaster crash at Alton Towers, which occurred in June of the previous year and left 16 people injured including two women who each needed to have a leg amputated. It was fined £5m.

In November 2015, the group said the crash was down to "human error" after the manual override system was used without the appropriate protocols being followed.