How did you feel immediately after the IPO of Merlin?
Standing on the balcony at the London Stock Exchange, with the clock counting down, was a very emotional moment. Naturally, we were all delighted with the response from investors and the media.
We were a private-equity owned company for 14 years, which was brilliant, as no other funding model could have helped us develop the business in the way that we have. But I always believed it was our destiny to become a public company. We’ve never made a secret of the fact that we wanted to be market leader.
Did it go the way you expected?
It has pretty much been reported as a textbook IPO. We were nine times oversubscribed at the price we floated at, and the value of those shares rose by around 10 per cent shortly after launch. That’s where it should be.
You don’t want the share price to rise so quickly that it looks as though the shares were undervalued – neither do you want them to be overpriced. I think we were well advised.
Some people tried to talk us out of having a retail offer because of the huge administrative burden it entails. But this is a company that people really want to own shares in – we sold 12.5 per cent to the general public.
Will the floatation change the business?
Day to day not at all – it’s business as usual. The important thing is that it will enable us to focus on long-term ownership and investment in our brands. With private equity backing, there’s always a shorter term view, with businesses being bought and sold every three to five years. If we’re investing $200m in a new Legoland park, for example, we really require a much longer-term perspective.
What are the other benefits to Merlin becoming a public company?
The general public are very familiar with our brands – but they may not have heard of Merlin Entertainments. The IPO will have greatly raised our profile and visibility as a major public leisure company (Merlin Entertainments is now listed in the FTSE 250).
This means we’re more able to converse with key decision makers – in government for example – and talk about pressing issues such as tourism taxes, investment, jobs and training.
The leisure industry has long suffered from a perception of being a Cinderella industry, and I feel it’s been massively undervalued as a key contributor to the economy – so I hope Merlin Entertainments can become something of a sector champion.
Also, we’ve already seen a significant increase in the quality of people who are applying for jobs with us. This can only add to the amazing and dedicated teams of staff that we already have working across all our brands.
How did your team react to the flotation?
They’re very excited about the future. We have incredible staff engagement, and they have a great passion for what they do – from those at the front line who stay up all night nursing sick seals, right up to management level. Around 1700 of our 10,000 permanent staff were awarded shares on the basis of long service or outstanding contribution. It was great to see them benefit from the IPO.
Will your role or the company change?
Our company mission statement from the early days was “to build a high growth, high return, family entertainment business based on strong brands and a global portfolio which is naturally hedged against the impact of external forces”.
We’ve always been guided by that. When Merlin was first formed, our brands were almost entirely UK-based. In 2010, 2 per cent of our turnover came from Asia Pacific. By the end of 2012 it was 14 per cent, with 20 per cent from North America. In 10 years’ time, I expect to see our brands and turnover evenly spread across Europe, the US and Asia.
A third of my time will be now taken up with corporate and new shareholder activity, which still leaves two-thirds to focus on the core business and new projects. You can also expect to see a lot more from our creative R&D division, Merlin Magic Making, which will soon be revealing a new midway brand* and a whole host of ancillary products for leisure parks in the next couple of years.
*On 25 February Merlin announced a joint venture with Dreamworks for the creation of a network of six attractions called Shrek’s Far Far Away Adventure.
What’s the secret to your success?
Having a great team behind me, an audacious vision, and a lot of luck!
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