Profits warning hits Holidaybreak

Holidaybreak, the camping to adventure holidays group chaired by the former British Airways chief executive Robert Ayling, saw its shares plunge 17 per cent yesterday as it conceded that profits for its current financial year were set to come in "materially below" previous expectations.

Holidaybreak, the camping to adventure holidays group chaired by the former British Airways chief executive Robert Ayling, saw its shares plunge 17 per cent yesterday as it conceded that profits for its current financial year were set to come in "materially below" previous expectations.

Despite strong rises in sales across its hotel and adventure holiday operations, it said continued poor levels of business in its camping division, which accounts for about 50 per cent of sales, had driven profits down.

The chief executive, Richard Atkinson, said he believed holidaymakers' increasing preference to book over the internet, and at the last minute, had been partly to blame for the group's poor performance.

However, he said changes would be made to the business to ensure the company adapted with the shifting environment, including a likely move into other European markets, and a greater focus on shorter breaks.

He said: "After the downturn caused by the Iraq war, we had a business which we thought would perform similarly to 2002 this year, but in reality it looks set to be closer to 2003."

Pre-tax profits for the year to 30 September 2003 were £20.7m, down 14 per cent from £24m the previous year.

Yesterday's update brought investors back down to earth, as the shares slumped 105p to close at 498p, their lowest for almost a year.