Merlin Entertainments, which also owns Legoland and Alton Towers could be valued at £3.5bn with plans for overseas growth

Merlin Entertainments, the owner of Madame Tussauds, Legoland and Alton Towers, is hoping to take a ride on a stock market flotation after revenues topped £1bn last year.

Analysts said the company could list with a valuation of up to £3.5bn, three years after it walked away from a planned £bn initial public offering (IPO).

Expansion in the US and Asia helped offset tougher times in Europe last year – where it was hit by miserable weather and competition from the London Olympics – lifting revenues by 15% to £1.07bn in the year to December. Operating profits rose 16.5% to £258m as visitor numbers to the group’s 94 international theme parks and attractions rose 16% to 54m.

Nick Varney, the chief executive, said: “We are currently giving active consideration to potential options for an IPO which preferably, but not definitely, would be in the UK.”

He said Merlin, which pulled plans for a public listing in 2010, was talking to potential investors and weighing up whether to list in London or the US some time in this year or next. “We are well invested with a strong brand, world-class quality product and the City is familiar with us as a company,” he said.

Analysts agreed that Merlin would be an attractive proposition for investors, if priced correctly. They said they would like the level of debt, which is about 3.5 times underlying earnings, to come down slightly but that would not stand in the way of a successful flotation. Merlin ended 2012 with £1.27bn of debt, broadly the same as a year before, after spending £92m on improving its existing sites and £71m on new businesses.

“IPO markets are open again in the UK and Merlin is a very good business that has been well run. Despite the recession, people continue to spend money on leisure and Merlin has some great assets that it would be difficult to replicate,” said Nick Batram, an analyst at Peel Hunt.

Visitor numbers at Merlin’s UK attractions were flat last year as the weather hit outdoor parks such as Alton Towers but benefited indoor attractions such as the London Dungeon. Legoland Windsor, boasting a new themed hotel, was one of the few outdoor parks to see a rise.

The group’s top performers were overseas ventures such as its Madame Tussauds attractions in Asia and Legoland in California. A fifth of turnover now comes from North America and 14% from Asia and the Pacific region, which accounted for just 2% of sales two years ago.

Varney said he expected a bounce back in the UK this year as there would be no competition from the Olympics, which drew 10m visitors away from alternative days out.

Elsewhere, Merlin is opening Legoland Discovery Centres in Canada, Germany and Westchester, New York; a new Madame Tussauds in Tokyo; a Dungeon in Berlin and a Sea Life Centre in Manchester.

It will also open a 250-bedroom Legoland hotel at its California park, as it continues its strategy of adding themed accommodation at its parks.

The scariest new ride will be The Smiler at Alton Towers, which is still under construction. “It’s the first ride I’ve looked at and wondered if I could go on it,” said Varney. “It’s a spaghetti of twists and turns and loops and we’ve been adding psychological tricks that make you feel like you’ve been hypnotised.”

Merlin worldwide: Numbers of attractions

• 44 Sea Life centres, including the UK, Germany, Spain, Italy and Germany

• 14 Madame Tussauds, including Bangkok, Shanghai and Las Vegas

• 10 Legoland discovery centres, including Manchester, Tokyo and Chicago

• 8 Dungeons, including The London Dungeon and Hamburg Dungeon

• 6 Legoland parks, including Windsor and California

• 5 theme parks, including Alton Towers and Chessington World of Adventures

• It also owns two ski resorts, The London Eye, Blackpool Tower

• Tree Top adventure parks based in Australia and Warwick Castle