The LEGO company – which owns the four LEGOLAND theme parks – has announced that it is unlikely to break even in 2004 and will consequently be transferring the LEGOLAND parks either partly or wholly to new owners and a separate company, so it can focus on its core play materials business.

Following the initiation of a cost reduction programme at the beginning of 2004, the company has reduced costs by approximately DKK1.2bn (£112m, 162m euros, $215m). The workforce has been reduced by nearly a thousand employees.

As part of the cost-cutting agenda, the LEGOLAND parks – in the UK, USA, Denmark and Germany – will either be wholly or partly transferred to new ownership. Although the outcome is uncertain at present as to whether external investment could be sought, LEGO has confirmed that it intends to maintain a controlling interest in the parks whatever happens.

CEO and owner of the LEGO company, Kjeld Kirk Kristiansen will also be stepping down to become deputy chair.

He will be succeeded by Jørgen Vig Knudstorp, who was previously the senior vice president of corporate affairs and has been appointed with immediate effect.

Kristiansen said: “Since January, my task has been to set a new direction for the company and create a plan for the recreation of a profitable LEGO company.

“The direction is clear and the action plan is already creating results. Therefore, this is the right time for the future corporate management to take over. Their task is to create a profit in 2005 and a result for 2006 which will provide a satisfactory return.” Details: www.lego.com