Caravans operator plunges into diving holidays

Holidaybreak, the tour operator which specialises in camping and caravan vacations, will today announce it is splashing out on the acquisition of Regal Diving & Tours, the UK's top-ranked diving company.

Holidaybreak, the tour operator which specialises in camping and caravan vacations, will today announce it is splashing out on the acquisition of Regal Diving & Tours, the UK's top-ranked diving company.

Holidaybreak, which runs Eurocamp, Keycamp and Sunsites, will pay the full £3.2m price of the transaction in loan notes and will inherit net cash balances of £500,000. The acquisition is expected to boost earnings in the first full year after completion.

Richard Atkinson, chief executive of Holidaybreak, said the strategy was to make acquisitions of market leaders in areas that it judged to be attractive. "Regal is a very well-run, well-organised business which will benefit from being part of Holidaybreak as well as increasing the group's portfolio in specialist holidays," he said.

The Regal purchase comes a month after Holidaybreak unveiled a £1.3m cash deal to buy Hotelnet, an internet portal which allows customers to make hotel bookings online. In February, the group paid £29m to acquire Explore Worldwide, an adventure holidays operator.

Mr Atkinson said there were opportunities to expand Explore's offering to include diving trips while Regal customers would be able to tailor their packages to include a wider range of activities.

Regal provides instruction, specialist courses and boat safaris for divers of all levels. It has a customer base of 8,000 for whom it arranges travel to destinations including the Red Sea, the Maldives and the Caribbean. Profit before tax was £371,000 in the year to 31 March on total turnover of £3.8m.

In May, Holidaybreak unveiled a reduced first-half loss of £7.9m on ordinary activities before taxation. The group expects to make a full-year profit, helped by a stronger second-half contribution from its core camping units.

Shares in the company closed unchanged at 301p on Friday. They have fallen some 13 per cent from their high of 346p before the results were announced in May.