UK-based theme park giant Merlin Entertainments predicts a “good performance” in 2017 despite profits slipping last year in the face of international terrorism.

The operating profit was down by 6.2% at constant currency levels to £302 million for the year to December 24 as visitor numbers rose by 1.3% to 63.8 million and revenue rose by 3.6% to £1.42 billion.

The profit decline at was due to “challenging trading in a number of key markets not fully offset by cost mitigation actions taken throughout the year”.

The company said: “As we enter 2017, Merlin is in a strong position and we remain confident in the prospects for the business.

“Trading at this seasonally quiet point in the year is in line with expectations, with planned investments and new developments on track.

“We are encouraged by recent trends in European visitation to our London attractions as the more competitive exchange rate begins to impact holiday decisions.

“Ahead of entering our peak trading periods, we remain alert to geo-political uncertainties, in particular from international terrorism, which has been shown to have a significant and immediate impact on our business.

“However, with strong underlying growth prospects, a diverse portfolio of global brands, and actions already taken to mitigate cost pressures, we remain confident of a good performance in the year ahead.”

The fall in the value of the pound since the Brexit vote helped boost inbound tourism to London and drove more staycations by British holidaymakers.

Chief executive, Nick Varney, said: “We are encouraged by recent visitation trends in our London attractions, although it is premature to declare a recovery, and we continue to plan accordingly.”

Reviewing the past year, he said: “Our performance in 2016 is testament to the benefits of our strategy of portfolio and geographic diversification, with over 70% of our profits coming from outside of the UK.

“The external environment continued to present challenges in a number of our key markets although the impact of this was offset to some degree by cost control measures taken during the year.

“As we move into 2017, with ongoing volatility in a number of our markets and continued cost pressures, we will increase our focus on cost efficiency and productivity, while continuing to invest in our product, marketing, and people to deliver safe and memorable experiences to our guests.”