Euro Disney doing 'too little for shareholders'

EURO DISNEY has come under fresh attack for doing too little to improve potential long-term returns for shareholders, other than for Walt Disney, which has a 49 per cent stake in the owner of the theme park outside Paris.

Investors have also had to endure a collapse in the company's share price this year from a high of pounds 16.84 to a low this month of 678p. Shares closed 13p up at 753p in yesterday's buoyant market.

The annual report, published yesterday, confirmed changes to the calculation of the management incentive fee payable to Walt Disney, but analysts said the company could have done more.

'To view this change favourably misses the point that the vast majority goes to Walt Disney. It is not really much of a change in real terms,' said Nigel Reed, analyst at Paribas.

Assuming that the troubled theme park eventually picks up and attracts 16 million visitors a year, he said Walt Disney could earn Fr1.6bn (pounds 190m) while all other shareholders would receive Fr264m (pounds 32m). Paribas remains a seller of the shares.

Walt Disney's take would include base management fees, royalties, dividends and the management incentive fee. The incentive element now comes into play when the theme park's adjusted pre-tax cash flow exceeds Fr1.736bn, against Fr1.4bn previously.

The complicated calculation of the cash-flow figure is based upon adding together pre-interest profits, rentals and depreciation minus recurring capital expenditure.

Walt Disney would be entitled to take 30 per cent of any surplus generated between the Fr1.736bn threshold and Fr2.604bn. There are two higher bands, enabling it to take 40 or 50 per cent.