by Lucy White
Sliding sales at legoland have sent shares in its parent Merlin
Entertainments tumbling. The theme park operator revealed revenues were down 0.3pc in its legoland Parks unit so far this year, blaming a temporary closure in Shanghai and the lack of a lego movie to boost customer visits.
Chief executive nick Varney said he had been expecting to see lower revenue, after ‘several years of very strong growth’. He did not cut the company’s guidance, but shares still dipped 8pc, or 29.7p, to 340p.
Total revenue was up 4.7pc, helped by openings such as The Bear grylls Adventure in Birmingham and Peppa Pig World of Play in Shanghai.
The negative effects of terrorist attacks in Britain was also abating, Merlin said. it had blamed last year’s atrocities at the Manchester Arena and london Bridge for keeping customers away.
nicholas Hyett, an analyst at Hargreaves lansdown, said that though next year’s The lego Movie 2: The Second Part should provide a lift, Merlin’s situation was ‘far from ideal’.
He added: ‘A rising cost base is making matters worse, particularly in the UK where business rates and the national living Wage are both putting pressure on margins.
‘new attractions might keep sales moving forwards, but likefor-likes need to be heading in the right direction too – especially since new roller coasters and theme parks don’t come cheap.’
investors’ high hopes for cigarette alternatives at British American Tobacco also went up in smoke as the company revised revenue guidance for its vaping and other non-traditional products from £1bn to £900m. The popularity of tobacco heating products – which get warm but don’t burn – had remained flat in Japan, while Vuse Vibe vapes had to be recalled in the US due to faulty power units.
Shares dropped 4.6pc, or 154.5p, to 3176.5p, their lowest level since early 2014. Just last week US regulators warned they would be increasing their scrutiny of vapes due to fears over teenage addiction, and implied that they may be considering cutting the tobacco content of normal cigarettes.
This could prove to be a problem for BAT, which is trying to pay down its debt pile. Though the company said its debt reduction plans ‘remain on track’, analysts at Royal Bank of Canada noted this was only the case assuming currency exchange rates have remained at January 2017 levels.
At current levels, the analysts added, these targets would be missed by a ‘meaningful’ margin.
despite the pressure on BAT, which was the FTSE 100’s biggest faller, Britain’s blue-chip index inched up by 0.43pc, or 30.18 points, to 7059.40 points.
On the FTSE 250, shares in defence and aerospace components company Meggitt soared 7.1pc, or 34.9p, to 529.4p.
in an update to the market, it said trading had been ‘stronger than previously anticipated’ in the third quarter of the year, especially in the civil aerospace and defence segments.
Meggitt had previously guided that revenue would rise between 4pc and 6pc, but it raised this to a range of 7pc to 8pc. demand for business jets and new larger jets had been growing, it said, and President Trump’s pledge to maintain defence spending in the US was feeding its business.
Meanwhile, the government gave a helping hand to retirement housebuilder McCarthy & Stone as it proposed that the retirement sector should be allowed to continue charging ground rents, as companies in the sector often use the income to cover construction costs. Shares rose of 6pc, or 7.6p, to 134.9p.