Holidaybreak's diversity will pay off
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The Independent Online

Camping on the UK's rain-sodden pastures and windswept seasides has always been a hardy British pursuit, but since the Seventies, operators such as Holidaybreak have offered Brits the chance to take their love of the outdoors to the sunny Continent for a warmer, cheap, family vacation.

Camping on the UK's rain-sodden pastures and windswept seasides has always been a hardy British pursuit, but since the Seventies, operators such as Holidaybreak have offered Brits the chance to take their love of the outdoors to the sunny Continent for a warmer, cheap, family vacation.

But Holidaybreak said yesterday demand for camping holidays has dropped in the face of equally cheap breaks abroad. Families can now afford to fly to their destination and stay in hotels. Announcing its interim results to the end of March, the company said it was downsizing its camping business in favour of short hotel breaks and adventure holidays.

Hotel break sales were up 9 per cent and adventure holiday sales rose 49 per cent in the period. For the first time, Holidaybreak reported an operating profit at the interim stage. City breaks and adventure holidays are less seasonal and now account for more than two-thirds of the business.

A downturn in consumer spending is a concern, and there are already signs of subdued bookings for domestic breaks in the UK. But the company recently bought two Dutch companies - an online short-break specialist and an adventure specialist - which have helped diversify the business and lessen its reliance on the UK consumer.

The shares are a relatively inexpensive 628p, and high levels of cash generated give the business a dividend yield of more than 4 per cent. A worthy hold.

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