LSE:MERL

Stock Analysis Report

Executive Summary

Merlin Entertainments plc operates visitor attraction places worldwide.


Snowflake Analysis

Proven track record with mediocre balance sheet.


Similar Companies

Share Price & News

How has Merlin Entertainments's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: MERL has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.04%

MERL

15.7%

GB Hospitality

10.0%

GB Market


1 Year Return

37.9%

MERL

-26.1%

GB Hospitality

-23.0%

GB Market

Return vs Industry: MERL exceeded the UK Hospitality industry which returned 20.2% over the past year.

Return vs Market: MERL exceeded the UK Market which returned 12.7% over the past year.


Shareholder returns

MERLIndustryMarket
7 Day-0.04%15.7%10.0%
30 Day0.4%-27.0%-17.6%
90 Day0.8%-34.6%-27.3%
1 Year40.1%37.9%-24.1%-26.1%-18.9%-23.0%
3 Year8.7%3.2%-16.2%-24.6%-12.9%-24.2%
5 Year38.6%27.7%-3.8%-18.9%1.6%-21.8%

Price Volatility Vs. Market

How volatile is Merlin Entertainments's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Merlin Entertainments undervalued compared to its fair value and its price relative to the market?

21.04x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: MERL (£4.55) is trading above our estimate of fair value (£3.72)

Significantly Below Fair Value: MERL is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: MERL is good value based on its PE Ratio (21x) compared to the Hospitality industry average (27.9x).

PE vs Market: MERL is poor value based on its PE Ratio (21x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: MERL is poor value based on its PEG Ratio (6.8x)


Price to Book Ratio

PB vs Industry: MERL is overvalued based on its PB Ratio (2.8x) compared to the GB Hospitality industry average (1.7x).


Next Steps

Future Growth

How is Merlin Entertainments forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

3.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MERL's forecast earnings growth (3.1% per year) is above the savings rate (1.2%).

Earnings vs Market: MERL's earnings (3.1% per year) are forecast to grow slower than the UK market (11.7% per year).

High Growth Earnings: MERL's earnings are forecast to grow, but not significantly.

Revenue vs Market: MERL's revenue (6.5% per year) is forecast to grow faster than the UK market (3.6% per year).

High Growth Revenue: MERL's revenue (6.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MERL's Return on Equity is forecast to be low in 3 years time (12.3%).


Next Steps

Past Performance

How has Merlin Entertainments performed over the past 5 years?

7.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MERL has high quality earnings.

Growing Profit Margin: MERL's current net profit margins (12.7%) are lower than last year (12.7%).


Past Earnings Growth Analysis

Earnings Trend: MERL's earnings have grown by 7.3% per year over the past 5 years.

Accelerating Growth: MERL's earnings growth over the past year (7.8%) exceeds its 5-year average (7.3% per year).

Earnings vs Industry: MERL earnings growth over the past year (7.8%) exceeded the Hospitality industry 4.9%.


Return on Equity

High ROE: MERL's Return on Equity (13.4%) is considered low.


Next Steps

Financial Health

How is Merlin Entertainments's financial position?


Financial Position Analysis

Short Term Liabilities: MERL's short term assets (£365.0M) do not cover its short term liabilities (£535.0M).

Long Term Liabilities: MERL's short term assets (£365.0M) do not cover its long term liabilities (£2.5B).


Debt to Equity History and Analysis

Debt Level: MERL's debt to equity ratio (67.7%) is considered high.

Reducing Debt: MERL's debt to equity ratio has reduced from 121.7% to 67.7% over the past 5 years.

Debt Coverage: MERL's debt is well covered by operating cash flow (37.1%).

Interest Coverage: MERL's interest payments on its debt are well covered by EBIT (6.8x coverage).


Balance Sheet

Inventory Level: MERL has a high level of physical assets or inventory.

Debt Coverage by Assets: MERL's debt is not covered by short term assets (assets are 0.3x debt).


Next Steps

Dividend

What is Merlin Entertainments's current dividend yield, its reliability and sustainability?

1.85%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate MERL's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate MERL's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if MERL's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if MERL's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: MERL is not paying a notable dividend for the UK market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of MERL's dividend in 3 years as they are not forecast to pay a notable one for the UK market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.4yrs

Average management tenure


CEO

Nick Varney (56yo)

20.83s

Tenure

UK£1,493,000

Compensation

Mr. Nicholas John Varney, also known as Nick, has been the Group Chief Executive Officer of Merlin Entertainments plc since 1999. Mr. Varney has been the Chief Executive Officer of Merlin Entertainments Gr ...


CEO Compensation Analysis

Compensation vs Market: Nick's total compensation ($USD1.93M) is below average for companies of similar size in the UK market ($USD3.42M).

Compensation vs Earnings: Nick's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Nicholas Varney
Group CEO20.83yrsUK£1.49m0.73% £33.8m
Anne-Francoise Michele Rankine
CFO & Executive Director3.25yrsUK£934.00k0.00098% £45.5k
Mark Fisher
Chief Development Officer & Member of Executive Boardno datano data0.23% £10.5m
John Jakobsen
Chief New Openings Officer and Member of Executive Board4.42yrsno data0.062% £2.9m
Nicholas Mackenzie
Managing Director of Midway Attractions and Member of Executive Board4.42yrsno data0.13% £6.0m
Mark Allsop
Chief Digital Marketing & Information Officer and Member of Executive Boardno datano data0.014% £641.3k
Hans Pedersen
Managing Director of LEGOLAND Parks and Member of Executive Board 4.42yrsno data0.036% £1.7m
Justin Platt
Chief Strategy Officer & Member of Executive Boardno datano data0.011% £532.6k
Matthew Jowett
General Counsel3.75yrsno data0.0015% £70.2k
Natalie Bickford
Group HR Director & Member of Executive Board3.58yrsno datano data

4.4yrs

Average Tenure

53yo

Average Age

Experienced Management: MERL's management team is considered experienced (4.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Nicholas Varney
Group CEO20.83yrsUK£1.49m0.73% £33.8m
Anne-Francoise Michele Rankine
CFO & Executive Director3.25yrsUK£934.00k0.00098% £45.5k
Charles Gurassa
Senior Independent Non-Executive Director6.17yrsUK£142.00k0.0099% £460.1k
John Sunderland
Non-Executive Chairman9.92yrsUK£506.00k0.052% £2.4m
Yun Chiang
Independent Non-Executive Director3.83yrsUK£102.00kno data
Trudy Rautio
Independent Non-Executive Director4.08yrsUK£116.00k0.0030% £137.6k
Fru Hazlitt
Independent Non-Executive Director5.58yrsUK£102.00k0.0031% £144.5k
Andrew Fisher
Independent Non-executive Director1.33yrsUK£50.00kno data
Søren Sørensen
Non-Executive Director6.08yrsno datano data

5.6yrs

Average Tenure

55yo

Average Age

Experienced Board: MERL's board of directors are considered experienced (5.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Merlin Entertainments plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Merlin Entertainments plc
  • Ticker: MERL
  • Exchange: LSE
  • Founded: 1999
  • Industry: Leisure Facilities
  • Sector: Consumer Services
  • Market Cap: UK£4.647b
  • Shares outstanding: 1.02b
  • Website: https://www.merlinentertainments.biz

Number of Employees


Location

  • Merlin Entertainments plc
  • Link House
  • 25 West Street
  • Poole
  • Dorset
  • BH15 1LD
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MERLLSE (London Stock Exchange)YesOrdinary SharesGBGBPNov 2013
M59DB (Deutsche Boerse AG)YesOrdinary SharesDEEURNov 2013
MERLLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPNov 2013
MIIN.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDNov 2013
MERL.YOTCPK (Pink Sheets LLC)ADRUSUSDFeb 2014

Biography

Merlin Entertainments plc operates visitor attraction places worldwide. The company operates midway attractions under the Madame Tussauds, The Eye Brand, SEA LIFE, The Dungeons, LEGOLAND Discovery Centres, Seal Sanctuaries, Shreks Adventure, Blackpool Tower, WILD LIFE, Australian Treetop Adventures, Hotham Alpine Resort, Falls Creek, and Little BIG City brands. It also operates resort theme parks under the Alton Towers, Chessington World of Adventures, Gardaland, Heide Park, THORPE PARK Resort, and Warwick Castle brands; and LEGOLAND parks under the LEGOLAND Billund, LEGOLAND Windsor, LEGOLAND California, LEGOLAND Deutschland, LEGOLAND Florida, LEGOLAND Malaysia, LEGOLAND Dubai, and LEGOLAND Japan brands. The company operates approximately 120 attractions, 18 hotels, and 6 holiday villages in 25 countries and across 4 continents. Merlin Entertainments plc was founded in 1999 and is headquartered in Poole, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/04 21:26
End of Day Share Price2019/11/04 00:00
Earnings2019/06/29
Annual Earnings2018/12/29


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.