Holidaybreak on European acquisition trail

Holidaybreak revealed it is pursuing several European acquisitions as it released its trading update prior to the end of its current financial year.

"Given the strength of its balance sheet and its excellent cash generation, Holidaybreak remains well positioned to grow, both organically and by acquisition," said the update.

"Management continue to pursue several European acquisition opportunities in the specialist tour operating sector, with good margin and cash generation characteristics. Further announcements will be made if and when appropriate."

It said it expects to deliver double-digit margins and be "strongly cash generative with year-end net debt substantially reduced".

The European specialist operator said the World Cup, recent terrorist threats in the UK and events in the Middle East and Turkey have not had a material impact on the group’s overall expected outcome for the current financial year.

But it admitted that the terrorist threats in the UK and events in the Middle East and Turkey have had a limited impact on its Adventure Travel Division.

In its hotels division, it has seen a recovery in trips to London, particularly in theatre inclusive packages.

"In order to maximise the opportunities available to the division, we intend to increase ongoing spend by &#pound;1-2 million and expect to see the return come through over the following years – one such area is in contracting more European hotels," it said.

In camping, it reported that sales are 9% down but, with capacity cut by 16%, occupancy levels have improved by about 10 days versus last year and the high season has been filled at good yields.

The group had considered selling its camping division but in June it decided to keep it.

By Bev Fearis