Profits up 33% at PE-backed holiday rental operator

Sykes Cottages, the UK’s largest independent operator of UK holiday rental properties, has reported record growth in sales and profits in its latest financial year.

The Chester-based business, which manages over 10,000 properties across holiday hotspots such as the Lake District, Devon and Cornwall and the Yorkshire Dales, said the rise of the so-called staycation and record numbers of foreign visitors was accelerating demand.

In the year ending September 2016 – the first full year of trading since a major growth capital investment by private equity firm Livingbridge – the business generated sales of £27.3m, an increase of 24% on the same period last year. Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) rose 33% to £6.8m.

It also said bookings in the financial year to date were up 23%, with the business on track to serve over 1 million holidaymakers, up from 815,000 last year.

Earlier this year, Sykes acquired West Country specialist operator Cornish Cottages and Devonshire Cottages. The business said it would continue to make selective acquisitions to strengthen its presence and portfolio in strategically important regions.

Sykes also made a £1.2m investment in its technology platform last year to support its growth strategy, which includes taking 2.5 million customers on holiday annually by 2020.

It also said the volume of enquiries from people thinking of buying or listing a holiday property was up 49% as more and more people looked to cash in on the lucrative trend.

The UK has an estimated 250,000 holiday property owners, which is said to be growing sharply due partly to new pension freedoms introduced in the 2015 Budget, which make it easier for people to access their pension pots.

Graham Donoghue, who joined the company as chief executive from moneysupermarket.com in August last year, said: “Our commitment to being the best choice for owners, offering the best experience to customers and operating the best brand and platform in the market is helping us capitalise on some highly positive dynamics in the self-catering sector.

“Together with further planned investment in the year ahead, we’re confident we can deliver our vision and ambition for the business as the number one provider of UK holidays.”

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