We no longer check to see whether Telegraph. To see our content at its best we recommend upgrading if you wish to continue using IE or using another browser such as Firefox, Safari or Google Chrome. By John FicenecQuestor editor. Will this be another Royal Mail and rocket on day one or will it fall as flat as Facebook?

First up, the theme park owner is a very different animal from Royal Mail. Spending on trips to theme parks is discretionary and dependent on consumer confidence and therefore more cyclical.

MERL:London Stock Quote - Merlin Entertainments PLC - Bloomberg Markets

Revenue and profitability could therefore exposed to a downturn. Merlin will also not offer anything like the kind of 6. Guidance from senior management was anything in the range of 0. With little on offer by way of dividend and less than compelling financials, it is difficult to envisage strong gains on day one: In terms of revenue, Midway attractions that owns Madame Tussauds, London Dungeon and London Eye represents 43pc, Legoland parks across the world 29pc, and Resort Theme Parks such as Alton Towers, Thorpe Park and Warwick Castle 27pc.

Legoland Parks are based in countries such as America, Germany and Asia, and this means that while 40pc of total group sales are still UK based, 26pc is in Europe, 20pc North America and 14pc Asia Pacific. Also while the majority of revenue, or 60pc, is still outdoors and weather dependent, the rest - a meaningful chunk - is now indoors. The theme park company has increased revenue by an average of However, stripping out acquisitions, Merlin said revenue growth was a more muted 3.

The company also has said it is highly cash generative but Questor thinks there are too many claims on that cash before it can be returned to investors. Theme Parks are capital intensive, they need refurbishing or they look tired and people stop going.

Why you shouldn't buy shares in Legoland owner Merlin Entertainment - Telegraph

The company is currently 36pc owned by Kirkbi, the investment arm of the Lego brand, 34pc Blackstone the private equity group, 28pc CVC also private equity and 2pc management. The sale looks like a classic private equity exit. Private equity firms run funds that typically have a ten year life span: Blackstone invested in and CVC invested in SinceBlackstone has already reduced its ownership from 52pc, and Questor thinks both private equity owners are not in for the long haul.

Merlin entertainment shares buy or not clue is in the name: The private equity groups are locked up from selling for a supertrend trading strategy of days from the IPO; after that stake selling could create downward pressure on the shares.

Conditional trading is set to begin November 12, with unconditional trading on November Questor thinks the float looks opportunist, debt laden and an exit for the private equity groups. The recent acquisitions in Australia could also suffer from the economic slowdown down under.

Why you shouldn't buy shares in Legoland owner Merlin Entertainment - Telegraph

There is little to be excited about here: Howard Marks, an Oxford University graduate turned drug smuggler, made millions. Now he eagerly awaits royalty cheques. Paul How to earn money from fashion blogging wasted too much on Ferraris merlin entertainment shares buy or not has made a fortune on his home - despite the flood.

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MERLIN share price (MERL) - London Stock Exchange

Saturday 17 June Why you shouldn't buy shares in Legoland owner Merlin Entertainment Questor editor John Ficenec explains why Merlin Entertainment will not repeat the success of Royal Mail shares. Will Merlin conjure up Royal Mail style gains? Questor believes those acquisitions have been funded by a growing debt pile.

Who is pulling the strings behind Merlin? Shares and Stock Tips.

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