Endless steps in to save Cosalt Holiday Homes

TURNAROUND and investment fund Endless has bought the struggling holiday homes division of marine safety group Cosalt for a nominal fee.

Endless is in a consultation process which could lead to the closure of Cosalt Holiday Homes’ caravans operation in Stoneferry Road in Hull following the acquisition as part of a strategy which it believes will give the business a greater chance of survival.

Leeds-based Endless said it would work to preserve jobs at Cosalt Holiday Homes, a manufacturer and supplier of static caravans and lodge holiday homes, following the sale.

More than 200 people work at the Stonerferry Road premises.

Cosalt has been looking to offload the Hull-based business as it looks to focus on its other activities. Endless stepped in following a lack of trade interest in the business.

Trading has been hit by the difficult economic conditions and the cooling of the property market to the extent that losses at the subsidiary have been running at £750,000 a month.

Endless, which has been advising Cosalt in recent weeks on the options for the subsidiary, which employs 280 people, has acquired Cosalt Holiday Homes and its two production facilities in Hull through Inhoco 3485, a company created to make the acquisition.

In a statement Endless said: “Endless has carefully evaluated the position of CHH to identify how best to safeguard the future of the business and so preserve some jobs.

“Endless believes there can be a viable business supplying quality lodges and niche, higher-end caravans to CHH’s exisiting valued customers, however the volume caravans business operated from the Stoneferry Road site in Hull is not viable unfortunately.

“Subject to undertaking an appropriate consultation exercise with the unions and employees at the site, we are considering discontinuing production at the site in a controlled manner over the coming weeks.”

Although a nominal fee has been paid to Cosalt, Endless will provide further funding for the caravan business to refocus on its lodges and higher-value caravans.

Colin McAusland has become executive chairman of Cosalt Holiday Homes and he will support the business’ existing management during the transition to a standalone lodges and niche caravans business at the Stockholm Road site in Hull.

In its interim results for the six months ended April 27, Cosalt said the holiday homes division had turnover of £22.7m and an operating loss of £500,000.

The value, at April 27, of the gross assets in Cosalt Holiday Homes that have been disposed of were £22.1m.

Following the disposal, Cosalt expects to take a write-off of approximately £8m including post tax trading losses in the accounts for the year ended  October 26 in addition to the loss of £7.1m reported in the interim accounts.

Mark Lejman, Cosalt’s chief executive, said: “The disposal of our last legacy non-core business is a major milestone in Cosalt’s development.

“The sale means we can now fully focus on growing our non-cyclical businesses and building Cosalt  into one of the world’s leading suppliers of services and products in the marine and offshore personal safety and protection industry.”

Endless was advised by Roger Esler and Dale Alderson of Deloitte in Leeds, who provided lead advisory, project management and tax structuring advice.

Legal advice was provided by Garry Elliott, Yunus Seedat and James Tatro of Addleshaw Goddard.