Profits dive at Center Parcs as site plans suffer new setback

Shares in Center Parcs fell yesterday after the holiday village operator reported a 35 per cent drop in first-half profits and said it was disappointed at delays affecting the development of a fifth site. Its stock closed down 2.75p, or 4.6 per cent, at 57p.

Martin Dalby, the chief executive, said it was "frustrating" that the local council has pushed back a meeting to discuss the planning application for a fifth site at Warren Wood near Woburn. The meeting was expected to take place before the end of the year but will now happen in March at the earliest.

Mr Dalby said that could delay the opening of the site, scheduled for the summer of 2008. Center Parcs always expected that its proposal would spark a public planning enquiry, which could take nine to 10 months, but said it had factored that into its timetable. City analysts said the successful opening of a fifth site was vital to the company's future and would "materially" drive earnings.

Center Parcs runs four car-free holiday villages set in woodland areas, which try to lure families by offering 70 activities from archery to sailing and accommodation in smart executive villas. Tapping into the growing British appetite for short breaks, the company has been able to churn out occupancy of more than 90 per cent for years.

The fall in profits masked a better underlying performance as last year's numbers included contributions from businesses which have since been sold as well as the sale proceeds. Pre-tax profits dropped to £12.6m from £19.4m for the half year to 6 October. Trading profits, adjusted for the one-off effects, totalled £14.9m compared with £14.2m last year. The group traded well over the key summer period and said bookings for the peak Christmas and new year period were in line with expectations.