City File: Euro Disney takes a downhill ride

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The Independent Online
EURO DISNEY is set to reveal a huge loss when it reports its first-quarter figures to December tomorrow, despite a 30p jump to 810p in the share price on Friday.

The theme park group is also expected to announce big job cuts among its administrative staff, following the resignation as chairman of Robert Fitzpatrick. His successor is to be the Frenchman Philippe Bourguignon.

Nigel Reed, an analyst at Paribas Capital Markets, reckons the loss could reach Fr600m ( pounds 72.3m). He wonders how Euro Disney can hope to finance the planned pounds 600m development of the second phase of the resort with gearing already at 250 per cent.

Last year, the 49 per cent shareholder, Walt Disney, deferred some of its management fees but not pounds 24m in royalty income from France. Cynics point out that by deferring fees Euro Disney's cash flow is boosted, helping it it to pay its dividend, pounds 10m of which went to Disney in California.

Euro Disney shares, which have halved in the past 12 months, still look a sell.

(Graph omitted)

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