28 Nov 2014 07:00
Merlin Entertainments plc announces agreement
to open LEGOLAND Korea
- New LEGOLAND theme park to open in Chuncheon, Gangwon Province, South Korea in 2017
- Park to be opened under Merlin's 'operated and leased' model
Merlin Entertainments plc (Merlin) today announces it will open its first LEGOLAND park in South Korea. The country has a well-developed theme park market and is one of the largest Asian markets for LEGO toy sales. The new park adds to Merlin's existing portfolio of six LEGOLAND parks in five countries and is expected to open in 2017, making a full year contribution in 2018.
The project will be financed under an 'operated and leased' model, in a similar structure to LEGOLAND Japan. The total estimated cost of the park is KRW300 billion (c£172m1) of which Merlin will invest approximately KRW100 billion (c£57m1) predominantly in to the branded assets. The remainder of the assets, primarily the park infrastructure, will be funded by a property company owned by a consortium of local public and private investors.
Merlin's investment is expected to deliver returns consistent with the Group's stated EBITDA ROIC target of 20%. The project will incur pre-opening costs of approximately KRW11 billion (c£6.5m1) and the ongoing EBITDA margin is expected to be in the range of 20-25% reflecting a turnover-based rental charge to the property company.
Nick Varney, Merlin Entertainments Chief Executive Officer, commented:
"I am delighted to be able to announce another Asian LEGOLAND Park project. South Korea offers both a developed theme park market and strong LEGO brand recognition. In addition, the city of Chuncheon provides the ideal location, with great transport links and a picturesque island setting.
"The project is being supported at both the national and local levels, with significant contributions from both Gangwon Province and the City of Chuncheon, as well as a group of Korean investors.
"We continue to be excited by the potential opportunity of LEGOLAND parks globally and reiterate our target of opening, on average, a new park every two to three years."
LEGOLAND Korea
The LEGO brand was introduced in to South Korea in 1984 and quickly established itself as one of the country's best loved toy brands. The LEGO brand is a market leader and South Korea has developed to become one of the LEGO Group's largest markets in Asia.
LEGOLAND Korea will be situated upon the island of Jung-do in Chuncheon, located approximately one hour by car from Seoul and within 2 hours' drive time for some 23.7m residents.
As part of the agreement, the National Government, Gangwon Province and Chuncheon City will fund the construction of a bridge to the site and provide wider infrastructure support, in addition to the already excellent transportation network. Further retail and complementary leisure offerings are planned for the island's development.
For further information please contact:
Investors:
+44 (0)1202 440 082
Alistair Windybank, Investor Relations
Simon Whittington, Investor Relations
Media:
Tulchan Communications
+44(0)207 353 4200
Susanna Voyle
Victoria Huxster
Notes to editors:
About Merlin Entertainments plc:
Merlin Entertainments plc is a leading name in location-based, family entertainment. Europe's Number 1 and the world's second-largest visitor attraction operator, Merlin now operates 105 attractions, 11 hotels and three holiday villages in 23 countries and across four continents. The company aims to deliver memorable and rewarding experiences to its 60 million visitors worldwide, through its iconic global and local brands, and the commitment and passion of its managers and circa 25,000 employees.
Merlin currently operates six LEGOLAND parks in five countries, including the most recent new openings in Florida (2011) and Malaysia (2012), and plans to open a seventh in Dubai in 2016. The LEGOLAND Park Operating Group enjoyed 14.2% revenue growth in 2013 delivering over £350 million in revenue with an EBITDA margin of 36.0%. Merlin sees the roll out of new LEGOLAND parks as one of the key growth drivers of the business.
Merlin also operates LEGOLAND Discovery Centres, a smaller, indoor LEGOLAND experience.
1 KRW / GBP exchange rate of 1745 as at November 25, 2014.