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Discover Leisure

  • BY: Andrew Hore |
  • POSTED: 01/11/2010 |

Caravan and motor homes retailer Discover Leisure made a small profit in the second half of the year to August 2010.

Focusing on five sites in northern England and improving operating efficiency have helped to improve margins. Underlying operating costs were cut by one-fifth. The second half is always the stronger of the two trading periods. The increase in VAT from 17.5% to 20% could spark buying before the end of the year but the business will remain second half weighted.

Discover has also managed to grow like-for-like sales of caravans by 6.4% even though the market shrank by 2.8%. The decline in the motor homes market was 15.9% but Discoverís like-for-like sales rose 6.9%. Touring caravans account for 51% of sales and motor homes a further 38%. Sales of accessories declined.

Overall revenues fell from £84.4m to £52.3m, while the reported loss declined from £16.7m to £1.8m. These figures include sites that have been closed.

Discover more than doubled orders from this yearís NEC Caravan and Motor Home Show. However, the market as a whole is likely to be flat this year. Discover plans to increase its aftermarket and servicing revenues.

Residential planning permission has been granted by Havant Borough Council for Discoverís Portsmouth site. That should enable it to complete the £1.65m sale of the site. This will go towards paying off a £1.9m bank loan. The loan has already been reduced by £3.1m through the sale of four other sites.

Net debt was £11.5m at the end of August 2010, even though Discover has increased its new vehicle stocks.

At 1.48p a share, up 0.23p, Discover is valued at £2.29m.

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