Merlin, the No. 2 operator of visitor attractions in the world behind Walt Disney, said profitability at its theme parks division might continue to feel the effects of the crash into next year.

Shares in Merlin earlier slumped as much as 8 percent to their lowest level since January, and were trading down 3 percent to 411 pence at 0818 GMT. Merlin's stock has lost 11 percent since the crash at the beginning of June.

Panmure Gordon analyst Anna Barnfather said the profit downgrade was larger than expected.

"There has been a substantial reduction in the visitor numbers at Alton Towers, and to a lesser extent at Thorpe Park," Chief Executive Nick Varney said in a telephone interview.

He blamed concerns over ride safety for the drop, as well as the company's suspension of marketing and promotional activities in the weeks following the crash, which meant the theme parks slipped down the agenda for people planning trips.

Alton Towers was closed in June while the company introduced safety measures after two carriages collided on its "Smiler" roller coaster ride, seriously injuring four teenagers.

Merlin said the temporary closure of one of Britain's biggest theme parks, as well as rides at other parks, would result in a 37 million pound to 47 million pound profit hit at its theme parks division this year.

The company said pretax profit for the year ending in December would now be about the same as last year's 249 million pounds, with more favourable financing costs offsetting some of the hit from the park closures.

Analysts had expected Merlin, which also runs Madame Tussauds waxworks and the London Eye, to make 273 million pounds profit this year, according to a Thomson Reuters forecast.

Merlin, which is due to report half-year results on Thursday, also said the weaker euro had reduced London's appeal to European tourists and this was affecting the performance of its division in the capital.

Varney said, however, the profit warning was purely down to the roller coaster crash, not the weaker euro.

(Editing by David Clarke)

By Sarah Young