Park eyes the future following financial overhaul

Last week, Park Resorts announced a debt and equity refinance of the company. Clearwater Corporate Finance led the refinancing negotiations for the firm with the banks and equity investors, reducing the overall senior debt from £353m to £316m.

The debt’s maturity, which was due in April next year, has been extended to December 2017.

The deal has also freed up £60m in capital, which will be used to improve facilities in the company’s holiday parks. Park Resorts has 39 sites across the UK, four of which are in Yorkshire.

Chris Smith, partner and head of debt advisory at Clearwater, said: “Park Resorts is one of those businesses that I would describe as a good business with a bad balance sheet. The business has grown significantly year on year for the last four years and has more than doubled in profitability in four years but its balance sheet was horrible.”

Under the terms of the refinancing package, Electra Partners and management become the majority shareholders of the company, with existing equity house GI Partners remaining as a significant minority shareholder.

In addition, Park Resorts has also appointed a new chief executive. David Boden, who took up the reins last week, was previously managing director of the Rank Group Gaming Division.

Now that the company’s finances have been tidied up, Park Resorts is looking to the future. Yorkshire is of particular interest to the firm, given that its caravans are made in Hull.

Mr Smith said: “Yorkshire is a key part of the caravan industry. A lot of parks are in that neck of the woods...I think that this sector is growing again, and it’s helpful when the weather is good.”

Park Resorts employs 700 permanent staff across the country, as well as 2,200 seasonal workers. Of this number, the four Yorkshire Parks hire 305 seasonal and permanent employees.

Richie Jones is marketing director for Park Resorts. He said: “There is a big caravan manufacturing footprint in Yorkshire.”

He added: “Especially since the heatwave, there’s been a real resurgence in the staycation trend. People think about all the hassle of going overseas and it’s a selling point that they can go somewhere locally and enjoy the best of the British weather.”

Unlike small, family-run caravan parks, Park Resorts offers a wide range of activities at its 39 venues, including indoor and outdoor swimming and evening entertainment. Popular resorts also provide a boost for the local economies in the form of day trips and increased visitor numbers.

Mr Jones says that recent bookings for the short term outbound market have dropped by about 25 per cent. By contrast, Park Resorts is tracking an uplift of 6 per cent year on year. The start of the school summer holiday period in mid to late July is the company’s peak time.

Of all the visitors to Park Resorts, 80 per cent are families. Although the company continues to welcome the more traditional type of customer – those people who bring their caravan – an increasing number of clients are renting on-site caravans and buying Park Resort’s own caravans.

In Yorkshire, 70 per cent of Park Resorts’ caravans are owned by customers. Mr Jones said: “While the recession has been a challenge, it has driven growth and driven people to our parks. Now we get vets, doctors and Audi-driving types at our parks as well as those who might not be as well off.”

Cayton Bay Holiday Park near Scarborough ranks in the top five of Park Resorts’ most popular parks.