Eurocamp suffers from devaluation: Chairman warns of possible 35% profits dive

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The Independent Online
A SLUMP in British holidaymakers going to France has hit Eurocamp, the self-drive camping group.

Sterling's devaluation has made France a less attractive holiday destination and camping prices in general have been squeezed by competitive pressure from the likes of Eurosites, owned by Airtours.

Bookings on sites close to the Euro Disneyland theme park have also failed to live up to expectations.

Eurocamp's shares yesterday plunged 28p to 203p as investors digested the warning from Tom Neville, chairman, that annual profits would fall by as much as 35 per cent.

The company said it had avoided the temptation to cut prices despite reductions by Key Camp, part of Baldwin, Canvas Holidays, privately owned, and Haven, part of Rank.

Camping holidays on the Continent have become more popular during the recession, largely because of cheaper prices.

Eurocamp, which trades at the top end of the market, charges around pounds 800 for a two-week holiday for a family of four, which compares with about pounds 1,400 for the more traditional air and hotel package.

Analysts yesterday questioned Eurocamp's ability to continue to resist the pricing pressure, particularly for next summer, which is likely to see a further competitive scramble for market share.

The City now expects Eurocamp to make pounds 6m for the year to the end of October against the pounds 9.4m made in 1991-92.

The profit warning by the company accompanied half-year results showing a rise in the seasonal loss from pounds 4.96m to pounds 5.12m. The interim dividend is held at 3.45p.

Eurocamp was coy when asked about prices for next year, although it did hint that changes in its approach to the market might be on the way.

Gordon Harman, finance director, said: 'We are now very conscious of the need for our offerings to be perceived as value. And we are conscious of the need to be competitive.'

He added: 'We are looking hard at our cost structure.' That included renegotiating rents paid for taking space on camp sites.

Occupancy levels per tent on the spaces occupied by Eurocamp have fallen this summer from 102 to 96 nights out of the 115 that make up the season.

(Photograph omitted)