Sterling's strength boosts Eurocamp's hopes

Click to follow
The Independent Online
Eurocamp, the camping holiday specialist, does not expect to share in the bonanza that other holiday companies are forecasting from customers flush with building society windfalls. Richard Atkinson, chief executive, said the bonuses would be "not unhelpful" for the company, but their customers tended to be younger families "who are probably at least as interested in Miras coming off as the windfalls".

However, Eurocamp is likely to be unusual among British companies in welcoming the recovery in the purchasing power of the pound abroad after being hammered by the currency's weakness in 1995/96.

With 65 per cent of its business in France, Mr Atkinson said they had seen some benefits come through since Christmas, although it would probably take until next year before people really started to take notice.

His comments came as Eurocamp announced a cut in its seasonal first- half loss, which fell from pounds 5.2m to pounds 4.66m in the six months to April. There had been "a bit of a slowdown" both immediately pre- and post the general election. But the new chairman, Angus Crichton-Miller, who joined from Rank last year, said he expected "a marked improvement" in the results this year, given higher margins in camping and further profits growth from Superbreak, the short-stay holiday company acquired in 1995.

"We are also confident that the strength of sterling will lead to a further recovery in our camping profits in 1997/98, whilst Superbreak's market leadership promises further growth in a strong sector."

Sales grew 12 per cent to pounds 16.6m, but the interim dividend, which is being maintained at 3.75p a share, is, as usual, uncovered by earnings. The loss per share fell from 10.5p to 8.9p.

Mr Atkinson said European camping bookings had been strong since the new year and although volumes were similar to 1996, their policy of targeting occupancy rather than volumes was bearing fruit.

Occupancy and sales values were up as a result of the decision to manage capacity and limit discounting, while they were benefiting from a better mix of business, including more caravan holidays and less tents. This augured well for an improved financial performance from the camping businesses.

As well as the weak pound, last year was hit by football fans staying at home for Euro 96 and criticism of French nuclear tests.

Most of the first-half sales came from the Superbreak and Goldenrail hotel break operations. Mr Atkinson said Superbreak had improved its margins, helped by lower commission rates paid to travel agents as a result of a shift away from the large chains. The figures bore pounds 1.55m of overheads from newly acquired Dutch and German sales subsidiaries, but that was more than offset by the absence of commission paid to overseas agencies.