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Investec's Ellison Still Bullish On Merlin

Commenting on how Merlin Entertainment shares have plunged 18%, Guy Ellison, Head of UK equities at Investec Wealth & Investment, said: “Much of today’s downgrade is being blamed on the weather and on terrorism, the latter which has weighed specifically on London. Whilst the long-term potential of the group and its brands is still arguably very significant, the market is clearly fixated with the short-term trading. Better weather in 2018 and the absence of any further terrorist activity in key city centres would make for some easier comparables, though to a degree this means relying on business drivers which are outwith of management’s control.

“More positively, sales are up 5.9% at constant rates after 40-weeks - up 12.4% at actual rates – though within that like-for-likes are up only 0.3%. New formats have been signed, including Peppa Pig outside of the UK and a tie up with Bear Grylls, and the decision has been taken to construct a LEGOLAND New York, expected to open in 2020.