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UPDATE 1-Merlin eyes "Dungeon" expansion as U.S. visitors embrace gore
September 18, 2014 / 10:31 AM / 3 years ago

UPDATE 1-Merlin eyes "Dungeon" expansion as U.S. visitors embrace gore

(Recasts, adds detail, shares)

LONDON, Sept 18 (Reuters) - Britain's Merlin Entertainments believes its "Dungeon" parks which take visitors on a gruesome journey through plagues and punishments of the past, could become a global money-spinner after the success of a new U.S. venue.

Merlin's chief executive - speaking after the group reported summer trading in line with its expectations - said customer reviews of its San Francisco Dungeon, the first outside Europe, had encouraged him to roll out the brand to other U.S. cities.

Merlin reported like-for-like revenue growth of 6.7 percent for the 36 weeks to Sept. 6 and forecast a year of growth, sending shares in the Madam Tussauds and Legoland operator up as much 2.3 percent on Thursday.

"The question mark in our minds with the Dungeon brand...was how well would a brand steeped in medieval horrible history translate to the relatively younger history of the U.S," Chief Executive Nick Varney told Reuters.

"Reassuringly we found that U.S. cities, albeit somewhat younger in historical terms, have still got the same background of torture, disease and gratuitous violence that most of their European counterparts have," he said.

The world's No.2 operator of visitor attractions behind Walt Disney has sought to diversify and build a balanced portfolio of businesses across the globe. It currently makes over 60 percent of sales in Britain and continental Europe but is aiming to generate a third from Europe, the Americas and Asia Pacific with a raft of new sites.

The Dungeon brand currently has eight sites in Europe - London, York, Warwick, Blackpool and Edinburgh in the UK, Berlin and Hamburg in Germany and Amsterdam in the Netherlands.

Merlin's rise in underlying revenue compared with a stronger 8.1 percent reported for the first half. The firm had flagged a second-half slowdown due to a tough comparison with last year, when warm weather boosted visitor numbers.

Merlin said profit growth in the period, though, meant full-year underlying profit margins similar to last year's levels.

Prior to the update, analysts were on average forecasting full-year core earnings of 400 million pounds ($652.2 million), according to Reuters data.

In July, the firm said it was in advanced talks to open more Legoland Parks in China and the United States. Merlin is already due to open parks in Dubai and Japan in 2016 and 2017 respectively, taking it to seven globally, and has said it sees scope for 20 in total.

Shares in the group, whose attractions also include Sea Life, Alton Towers and the London Eye, were up 5.8 pence at 347 pence at 0912 GMT, valuing the business at 3.45 billion pounds. The stock had listed at 315 pence.

1 US dollar = 0.6133 British pound Reporting by James Davey, editing by Pravin Char and Clara Ferreira Marques

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