Terrorist attacks in the British capital affected its Midway division, but Merlin Entertainments enjoyed a solid 2017, with visitation and earnings both rising year-on-year.

Merlin marked several achievements through the year, including the launch of new accommodation at Legoland parks in Billund, Florida and Windsor, as well as the launches of six new additions to its Midway division and the landmark launch of Legoland Japan.

Pre-tax profits rose by 4.8 per cent to £271m (US$373m, €306.2m), on revenues up 11.6 per cent to £1.6bn (US$2.2bn, €1.8bn).

According to Merlin, the company’s Midway division suffered from “immediate and significant impact” in regards to terror attacks in Britain last year. Citing a report from the London Evening Standard, Merlin said that visitors to the city’s biggest attractions dropped by around 17 per cent between May and September compared to visitor figures from 2016.

"Because they young families weren't brought up in the shadow of the UK and the IRA this is their first experience of domestic terror,” said Bernard Donoghue, director of the Association of Leading Visitor Attractions (ALVA).

“While some of us who are older may take it in our stride and keep calm and carry on, they are going elsewhere, places like Bath, Bristol, Oxford, instead.”

Due to the poor trading in London, the results offset contributions from new openings and growth elsewhere, such as Merlin’s Lego parks, which continued strong trading buoyed by the release of two new Lego movies.

Captial expenditure for the year increased to £336m (US$462m, €379.6m), up from £259m (US$356m, €292.6m) in 2016. That number is expected to rise again this year to between £340m (US$468m, €384.2m) and £360m (US$495.6m, €406.8m), with primary costs coming from the development of Legoland New York, which in 2018 will cost Merlin an estimated £30m (US$41.3m, €33.9m) to £50m (US$68.8m, €56.5m).

Merlin has a strong lineup for 2018, with Legoland Japan entering its first full year of trading since launch. Also for Merlin’s Legoland parks, available accommodation is increasing, with 250 new rooms in California, 142 in Germany and 252 in Japan.

With 11 Legoland parks either open or in the pipeline, Merlin’s CFO, Anne-Françoise Nemes said that the operator believes there is scope for 20 Legoland parks worldwide, adding that there are several agreements in place in China. For accommodation, the operator expects to have 1,300+ rooms by 2021, a significant increase on the 383 rooms that were available in 2017.

“A year that started well with positive momentum in almost every part of the Group was ultimately defined by the unprecedented spate of terror attacks in the UK and poor to extreme weather throughout the summer season in Europe,” said Merlin CEO, Nick Varney.

“Despite this, we have reported overall growth in revenue, profit and cash flow, welcoming 66 million visitors – our highest on record.

“Merlin continues to evolve and, with attractive market fundamentals and the right strategy in place, we remain highly confident in the long-term prospects for the business.”