Discover Leisure sees signs of hope in market

The East Yorkshire caravan retailer told shareholders at its annual meeting that market figures show trade sales of touring caravans have increased for the first time in 16 months.

Discover, which was last year saved from collapse by a restructuring which allowed it to write off some of its debts and shrink to five sites, said it has made "good progress in creating a stable platform for growth".

After the market saw an improvement in touring caravan sales in September and October, November saw a 37 per cent year-on-year increase in trade sales. Tourer production rose by 22 per cent on a year earlier in the three months to the end of November.

Discover's own sales showed a like-for-like fall of eight per cent between September and December, compared to a year earlier, which it blamed on the continued weak marketplace and significant discounting. Sales were also affected by the VAT change, which meant a surge before the new year, and more recently have been driven down by the heavy snowfall.

But Discover added orders for its new 2010 range are up 370 per cent. The group said turnover and margins are both in line with expectations.

"Looking ahead to the second half, the continuing economic

uncertainties and the need to assess the market at Easter make it difficult to predict the group's results," said chairman David Morrow. "In the interim, we expect trading to improve but to remain challenging."