Losses soar at Holidaybreak

CHESHIRE travel giant Holidaybreak has seen losses more than double in the first half as the recession hits demand for its adventure holidays.

The group, which traditionally reports a loss in the first half because of the seasonal nature of its camping and education holidays, said losses for the six months to March 31 before one-off costs were £36.6m compared to £18.2m last time. The underlying loss increased from £14.9m to £18.9m. Revenue at the group fell from £156m to £153m.

The group said its Explore Worldwide business has been “significantly impacted” by the current economic environment, with sales down 16%, causing the company to partially impair the goodwill from its acquisition in 2000. The current impairment charge is £9.6m.

Holidaybreak has also been hit by a £7m non-cash charge in respect to the revaluation of its interest rate derivatives and forward foreign currency exchange contracts.

Elsewhere, Holidaybreak said sales at its camping division are down 1%, however operating loss narrowed from £14.8m to £13.4m.

Its education division is  95% booked for this year and 34% for 2010, and sales on a like-for-like basis are up 7% on last year.

Holidaybreak’s short break business has seen sales fall around 6%, although losses narrowed and the group said sales are picking up as it is beginning to see the benefit of an improved show offering in London’s West End.

Chief executive Carl Michel said the group has performed well in the first half despite being impacted by the recession.

He said: “The decline in consumer confidence has reinforced the trend towards later bookings, particularly in the camping division. We have taken and are taking the necessary steps to cut costs and restructure operations, particularly in the adventure travel division. Meanwhile, education, our largest division, is doing well and we are seeing signs of improved trading in hotel breaks.

“Current trading is in line with management expectations. We will remain focused on cash generation and keeping costs under control while developing growth opportunities which we are currently seeing, both for the short and medium term.”

Holidaybreak declared an interim dividend of 4.6p per share compared to 9.25p a year ago.