FTSE Russell, the global stock market index provider, has today confirmed that Merlin Entertainments will drop from the top tier FTSE 100 index to the FTSE 250 as part of the quarterly review of the FTSE UK Index Series.
Merlin Entertainments’ relegation from the UK’s leading share index follows a significant decline in the company’s share price after it issued a profit warning in its October update following weaker than expected performance across its portfolio of attractions. The group has experienced a drop in visitor numbers, which it has said is the result of the heightened UK terror threat level, and poorer than expected late summer weather across Northern Europe and the UK.
The demotion from the top tier of the UK stock exchange will be seen as a further blow to Merlin Entertainments, who have seen mixed fortunes since first floating on the stock exchange in November 2013. The company’s share price peaked at 537p back in May 2017, however, since issuing its trading update in October this year share prices tumbled to a third of their May peak.
It is currently unclear if Merlin Entertainment’s demotion will be responded to with a change in the company’s strategy for its various attractions. In its last trading update the company outlined plans to focus on adding additional rooms across its Resort Theme Parks reasoning that this would offer a better return than other capital projects.
Merlin Entertainments is one of three companies to be demoted from the FTSE 100, with Conva Tec Group, and Babcock International Group also moving down to the FTSE 250. Just Eat; Smith (DS); and Halma, are set to replace the three demoted companies in the FTSE 100.
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