Discover Leisure shares suspended on finance problems

SHARES in Discover Leisure were today suspended after the caravan retailer admitted it is unlikely to secure vital funds needed to keep it trading.

The East Yorkshire-based group, which went through a debt restructuring in 2009, this week warned it has been hit by weak consumer sentiment and needs to secure more finance.

Today the company said while it has been working “vigorously” to secure additional funds, it looks unlikely to do so in time, and thus requested the suspension of its shares, “pending clarification of the company’s financial position”.

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“Despite the extremely challenging trading conditions and financial environment, the board has had some success in finding financial investors who have indicated an intention to invest additional capital or acquire certain assets of the company,” it said.

“However, the board now believes that it is increasingly unlikely that an acceptable solution to the funding issues which the group faces can be secured in the necessary timeframe.”

The company, which now operates from five sites across the north after its restructuring, has been hit by consumers’ reluctance to spend on big ticket items such as caravans and motorhomes.

This week it said provisional results for the year to the end of August show annual pre-tax losses improved slightly to £1.5m from £1.8m a year earlier, but turnover was down almost five per cent at £49.8m.

Discover said its net debt was around £10.1m at the end of August, down from £11.5m a year earlier after selling surplus property.

Discover was originally incorporated in April 2003 to exploit opportunities in the leisure market.

It was founded by the former team at Dixon Motors.