The market has been bracing itself for poor trading news from Holidaybreak for some time. However, the outcome for the seasonally loss-making half year was better than expected and the shares jumped 11 per cent post results.
The best performance came from the group's education business which boasts predictable revenues and is the focus of expansion. While sales intake is currently 1 per cent down on last year, the 2011 season is already 96 per cent booked and 2012 is 39 per cent booked. And German educational business Meininger, in which Holidaybreak took a 50 per cent stake last year, is 16 per cent ahead thanks to strong like-for-like growth.
However, there were several problem areas. The adventure holidays business has had a particularly tough ride and underlying losses trebled to £2.1m. As well as the weak UK consumer, the business came up against political turmoil in North Africa and the Middle East, which led to cancellations and lower bookings. The hotel breaks division also felt the impact of a weaker consumer environment and booking trends at the camping unit continue to get pushed back. Sales intake there declined 5 per cent, compared with a 3 per cent reduction in capacity, and the business is currently 82 per cent booked compared with 86 per cent this time last year.
Broker Altium Securities expects full-year EPS of 35p (33.1p in 2010).
| Holidaybreak (HBR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 263p | MARKET VALUE: | £186m | |
| TOUCH: | 265-269p | 12-MONTH HIGH: | 366p | LOW: 239p |
| DIVIDEND YIELD: | 4.3% | PE RATIO: | 8 | |
| NET ASSET VALUE*: | 134p | NET DEBT: | 158% | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 150 | -20.0 | -21.5 | 3.20 |
| 2011 | 140 | -16.8 | -17.9 | 3.35 |
| % change | -7 | - | - | +5 |
Ex-div:13 Jul Payment:10 Aug *Includes intangible assets of £165m, or 234p a share | ||||
