Discover banking on grey market

CARAVAN and motor home group Discover Leisure is “cautiously optimistic” that the weakening in consumer confidence will not hit its business.

When times get tighter people tend to holiday at home rather than abroad and the East Yorkshire company's target market is among the over 50s who have smaller mortgages and more savings.

Chairman David Morrow will tell shareholders at today's annual general meeting that the group's like-for-like orders were “flat” in the 12 days to January 7 but its new acquisitions helped boost orders to 224 for the Christmas period – a 170% increase on last year.

Mr Morrow points out that the winter is always the Market Weighton-based group's traditionally quiet period and it makes the majority of its sales between Easter and September.

“As we look forward to the second six months, we are aware of and vigilant to the predicted weakening in overall consumer confidence. We have a strong bias towards the more resilient over 50s sector and a clear focus on the bottom line.

“The true nature of the season will become apparent over the coming weeks but at this moment we remain cautiously optimistic,” Mr Morrow will tell shareholders.

The company saw turnover more than treble to £54.3m in the year to August 31 but made a pre-tax loss of £668,000. However, analysts are predicting profits of £3.5m in the current year thanks to its new acquisitions.

It bought Leisure World for £5.75m in September 2006, Barrons for £20m in July, and Mendip for £2.2m making it the leader in the UK caravan retailing market and the largest retailer of leisure vehicles in the UK.

It now has 15 sites with annual turnover of £150m.

Around 30,000 touring caravans are sold in the UK each year while 9,285 motor homes were sold in the year to the end of October, making it the second fastest growing market in Europe.