Companies: HBR   

Shares in specialist holiday provider Holidaybreak dropped 16% to 508.5p after a downcast trading statement. Although the Hotels and Adventure divisions have performed well in the current year, a poor performance from its largest profit contributor, the camping division, has pulled down sales and profits and the group now expects an outcome for the full year to be materially below previous expectations. Broker Charles Stanley had predicted pre-tax profits of £33m (£27.9m) with an EPS of 49.9p for the year to September but has now revised this to £27-28m giving an EPS of 41p. Since September, the hotel breaks division enjoyed a like-for-like sales increase of 38%. Adventure holidays are up 17% for the same period. However, camping, which experienced a 20% fall in sales from September to December comparatively, is still under pressure from a trend towards later booking - cumulative sales are 8% down from the prior year. Since March, sales are 32% higher but with occupancy levels affected, a 'substantial reorientation' of its campsite programme with a much-reduced capital expenditure programme for 2005 is anticipated. While currently there is continuing uncertainty over overseas holiday demand, over the longer-term, Charles Stanley believes the group to be better positioned than its 'vertically integrated' competitors, especially as customers are increasingly opting for shorter, and more frequent, holidays that are tailor-made. Hold for recovery.