S&P lifts Merlin trend to positive

S&P said it revised its outlook for Motion Midco Ltd., owner of Merlin Entertainment plc, to positive from stable.

“Higher pricing supports Merlin's profitability and cash flow generation. Over the past two quarters, Merlin has returned to its pre-pandemic revenue base and improved its margin profile despite seeing fewer visitors. Merlin's owner Motion Midco reported S&P Global Ratings-adjusted EBITDA of £606 million for the first nine months of 2022, up about £135 million from the same period in 2019, and adjusted operating margins of 38.9% (about 550 basis points higher). Higher pricing was a major contributor to the margin improvement as revenue per customer (RPC) increased by more than 25% from 2019 levels,” the agency said in a press release.

S&P noted it could raise Motion’s ratings within the next 12 months if the group sustains its current credit metrics with a supportive financial policy of leverage tolerance at current levels or lower.

Additionally, the agency affirmed the B- issuer, B senior secured debt and CCC senior notes ratings.

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