16/10/2011 Share this story Share on Facebook icon Share on Twitter icon Share on Pinterest icon Share on Google Plus icon Share on Linked In icon Share via Email icon

Major motorhome dealer enters administration

Discover Leisure has gone into administration.

The company, which sells motorhomes and caravans, operates five sites and employs 250 people.

It said in a statement to its shareholders on Friday (14 October 2011) that it “has faced challenging trading conditions” and that it has been trying to secure additional capital.

However, it has failed to secure the capital it needed. As a result, the trading of its shares have now been suspended and the company has appointed KPMG as its administrator.

It is as yet unclear what will happen to the sites, employees or any agreements it has with motorhome buyers and existing customers. In the first instance anyone with concerns is advised to contact KPMG.

Prior to the suspension of shares’ trading, negotiations were on going with a number of parties and the company said it was hopeful that sufficient additional funding or a business disposal would be completed.

“It has now, however, become clear that neither solution can be achieved within the foreseeable future,” it said.

“The directors and management will be working with the administrators to try and ensure that the business is saved in part or as a whole and as many of its employees as possible maintain their jobs within the business."

Discover Leisure floated in May 2005. Its strategy was “to lead the consolidation and modernisation of caravan and motorhome retailing in the UK”.

In August 2005, Discover Leisure acquired the company which owned Harringtons Caravans.

In September 2006 it acquired Leisure World, which owned four caravan retail outlets, for £5.75m, followed in July 2007 by the acquisition of Barrons Holdings, a retailer of caravans, motorhomes and associated accessories with seven retail branches across the country, for £20m.

On the same date, Mendip Caravan Centre, which operates three retail branches, was purchased for a total consideration of £2.2 million.

Finally, in March, 2008, Discover Leisure acquired motorhome dealership based on a five-acre site in Cannock in Staffordshire from the Brownhills Group for £2.66 million.

In a mater of weeks, there was a rapid decline in the demand for leisure vehicles following the global financial crisis in 2008.

The business undertook a major restructuring of the business in 2009 including the proposal and subsequent approval of a Company Voluntary Arrangement (CVA), refinancing of its banking facilities and closure of 11 of its trading sites.

Until last week it was operating from five branches employing 250 people across the north of England. The branches are located at: Birtley (Tyneside), Delamere (Cheshire), Chorley (Lancashire), Darlington (County Durham) and York (Yorkshire).

Back in April 2011 in its interim results, David Morrow, Chairman of Discover Leisure plc, said that he was expecting the rest of 2011 to be tough.

"Having improved the operational health of the business in the second half of the 2010 financial year, the Group entered the seasonally quieter first half of the year with the aim of selectively increasing market share, reducing debt further and generating cash. Good progress has been made in these areas and this has led to further improvements in total revenue, reduced administrative costs and an improved bottom line,” he said.

"The Group's results in the first half were better than last year but were impacted nonetheless by continued recessionary conditions and pressure on margins. Whilst the stock pressure may be lessening, the second half year is expected to be equally challenging."


16/10/2011 Share this story Share on Facebook icon Share on Twitter icon Share on Pinterest icon Share on Google Plus icon Share on Linked In icon Share via Email icon

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