Profits up as Holidaybreak makes £31m German move

CAMPING to school trips specialist Holidaybreak pitched in to Germany today as it spent £31m on taking a 50% stake in a student and school tour accommodation business.

The Cheshire company also has the option to buy out the rest of Meininger over the next two to three years.

Holidaybreak, owner of the Eurocamp, Keycamp and PGL brands, also announced strong financial resullts, which saw profits rising 8.9% to £30.7m, despite a 2.5% fall in group revenues to £461.7m.

A focus on the Yorkshire-based education division was behind the improved profit figures the company said, as this market sector is less exposed to discretionary spending.

Before the German acquisition – which is a cash deal –  group debt had been reduced by £38.4m to £99.7m.

Chief executive Martin Davies said he was pleased with the results, which he said “demonstrate solid profit growth, improved cash management, stringent cost control and a strong operating margin performance.”

He said the investment in Meininger would help Holidaybreak grow its presence in the key European education market:  “Our goal is to become the leading brand in the European school trip market, covering all the major destinations such as Paris, London, Berlin, Amsterdam and Milan. This transaction takes us a step closer to that goal.

“Education has been core to our business for some time and remains central to the group’s plans for profitable growth. Meininger fits with our core competencies in property, hospitality and safety management for children and school groups.

“It also secures a growing earnings stream with major potential for further growth outside of Germany and gives Holidaybreak the potential for further development in school tours and activities in various European markets.”

State of the Region: to take part in our major business survey, click here

Headquartered in Berlin, Meininger employs over 250 staff and operates 10 properties in Berlin, London, Vienna, Munich, Frankfurt, Cologne and Hamburg.
Looking ahead Mr Davies said although the outllook for 2011 ‘remains challenging’, the education division gives good visibility.

He said  current trading was in line with management expectations. Group sales for 2010/11 to date are currently 1% down on last year.

“The acquisition of Meininger will increase our proportion of non-leisure revenues and we will continue to invest in our education businesses which have defendable, leadership positions in attractive sectors with strong market drivers for growth. #

“However, we will continue to manage the entire business tightly, with a focus on cash generation and cost control.”