Alton Towers: Smiler rollercoaster crash could hit group’s profits by £47m

Merlin Entertainments, which owns Alton Towers, has said that it is expecting a huge drop in profits following the accident on the park’s Smiler rollercoaster on 2nd June.

The firm also said the impact of the incident, which resulted in two people losing a leg, could continue into 2016 as it struggles to rebuild its reputation.

The park was closed temporarily as a result of the accident, with a subsequent knock on affect hitting early summer trading.

In the company’s recent statement, the company said that profits for the theme parks division are expected to be between £40 and £50 million in 2015, compared to £87 million past year.

Cost-cutting and good performances across the group meant that the pre-tax profit would “broadly be in line” with the £249m posted in 2014.

However, he brushed off the question of whether Alton Towers might ever need to be sold off or closed down.

MORE: Yet another roller coaster “crash” happened at Alton Towers but they say it was just “a nudge”.

But Mr Varney added: “At the end of the day we have had one accident in the history of this company”.

Merlin’s chief executive Nick Varney told the BBC that reducing its marketing activity following the incident was appropriate. I think, hopefully, people believe we have been responsible in the way we have acted.

“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”.

The company that owns Alton Towers could lose up to £47m of profit as a result of the horrific Smiler smash last month.

Marketing for Merlin’s theme parks was reduced significantly too.

Merlin will release its results for the six months to 28 June 2014 on Thursday (30 July 2015).

Elsewhere, revenue in its Legoland group saw like for like growh of 6 per cent driven by ongoing strength in its two US parks and successful launches of new features and products.

But London sites were hit by lower visitor numbers from Hong Kong, blamed on travel restrictions for tourists from China.

Brown said the downgrade to guidance was larger than Shore Capital had expected, but the broker was encouraged by the better trading elsewhere “and while not trying to trivialise the tragic events, historically theme parks around the globe have recovered relatively quickly from such events”.