Merlin Entertainment Issue Profits Warning

Merlin Entertainment PLC is one of the leading companies in the UK in the leisure market sector. They operate in total 124 attractions along with 16 hotels and 3 holiday villages which are based in many different countries of the world.

However, today the 27th of July 2015 they have just issued a profit warning on which they are expecting this year’s full earnings to be down around £40 million on earlier estimations.

One of the main reasons for this quite unexpected profit warnings was a serious incident at Alton Towers earlier this year. That incident saw one of their star attractions that being The Smiler Rollercoaster malfunction which resulted in a string of life changing injuries for several of the people riding the rollercoaster at the time.

The accident which is still being investigated resulted in Alton Towers temporarily closing their doors for several days and once they reopened several of their rides were out of operation whilst urgent safety checks were performed.

Whilst the theme park has now reopened trade is slightly down with many parents shying away from taking their children there for a summer day out and as such the closure of the theme park coupled with the compensation so far paid out and the downturn in business has led to this urgent profits warning.

Another factor that may also be affecting the profitability of Merlin Entertainment PLC this year is the weather, with rain forecast for the very near future and with children now breaking up from school many families are choosing to take their summer holidays abroad and outside of the UK.

With the strength of the Pound against many other currencies namely the Euro being so high many families are finding it is now a lot cheaper for them to holiday in some other European countries rather than have a “staycation” in the UK.

If you are considering placing Binary Options trades on the UK Leisure market sector then you should be aware of the expected down turn in the number of people planning to holiday in the UK this summer as profits may be down on those home grown leisure based companies due to the number of families opting to holiday abroad this year.

Plus if the weather does not change for the better during the summer months in the UK there will also be a lot of other leisure related companies in the UK who may start to see their year on year profits taking something of a downturn during 2015.