Companies: HBR   

Specialist holiday provider Holidaybreak reduced pre-tax losses at the interim stage by 39% to £6m despite its Camping division suffering from poor trading. Turnover increased 37.5% to £71.5m, thanks largely to good performances from its hotel breaks and adventure holiday divisions. Hotel Breaks saw like-for-like sales increase 35% and sales improve 50% to £54.8m. Chairman Robert Ayling stated London breaks proved particularly popular, but he anticipates some slowdown on year-on-year growth during the remainder of the year. Adventure holidays, including the Explore World-wide and RegalDive businesses, enjoyed a 17% increase in year-on-year sales, as global trading conditions have largely improved. The camping division is now trading in line with revised expectations but its cumulative position is 7% below the equivalent figure for 2003. A review of the division is currently underway, overseen by new divisional managing director Matthew Cheetham. With capacity levels proving too high this year, the number of campsites in its programme is likely to be cut for 2005, with capital expenditure reduced. House broker Charles Stanley has forecast that pre-tax profits will hit £28m, giving an EPS of 41p. The forward p/e of 12.1 is reasonable, but Ayling has warned the overall outcome for the year is sensitive to to the operational gearing within camping and the success in clawing back late booking sales. Continue to hold but keep a very close eye on developments.