PGL proves an education

With the summer season well advanced, the company said it is confident of delivering a good financial performance.

The update contrasts with this week's profit warnings from bigger operators Thomas Cook and Thomson Holidays owner TUI after more people opted to stay at home because of economic conditions and distractions such as the World Cup.

Chief executive Martin Davies said: "Given overall economic conditions, I am very encouraged by the resilience and financial performance of our business." Holidaybreak's education division remains largely unaffected by the recession as parents are willing to make sacrifices in order to prioritise their children going on educational trips.

The PGL outdoor education centres are showing revenue growth of eight per cent year on year and are already 76 per cent booked for the 2010/11 season.

PGL, the market leader in outdoor adventure, was named after its founder Peter Gordon Lawrence, but affectionately known by children as 'Parents Get Lost'.

Its target is schoolchildren between the ages of seven and 17 and activities range from 'Wet & Wild' watersports camps to a video game workshop.

The multi-activity holiday is the most popular, packing as many outdoor education activities as possible into one week.

The hotel breaks business, based in York, saw a four per cent drop in sales for the 10 weeks to August 11.

Holidaybreak's finance director Bob Baddeley said the hotel breaks division had suffered from a lack of new London West End shows.

"It's a very competitive market," he said. "But we have seen a recovery in recent weeks after we launched a new website, which is attracting business."

He added that the favourite show is still Lion King, although other popular shows include We Will Rock You, Wicked, Sister Act and Oliver!

The adventure travel business reported flat sales over the 10 weeks, but 2010/2011 sales are up an encouraging 11 per cent as the adventure market shows signs of recovery.

"Many people have delayed a tour this year but said they will go next year," said Mr Baddeley.

Popular adventure holidays include trekking in Peru, walking the Great Wall of China, safaris, walking holidays in the Pyrenees and Antarctic cruises.

Camping sales were flat and the division was hit by flooding in the Cote d'Azur last month with a loss of 74 mobile homes. As the group is not insured against loss or damage due to severe weather, the floods could wipe 1.2m off the camping division's profits.

KBC Peel Hunt analyst Nick Batram said: "Although the consumer backdrop is clearly challenging, Holidaybreak is performing relatively well. Education continues to be the main driver."

Analyst Greg Feehely at Altium Securities said: "Given Holidaybreak's shares have fallen 17 per cent relative to the market over the last month, its lowly valuation and the likelihood debt is set to fall markedly over the course of the forecast period, we retain our buy recommendation."

Holidaybreak's shares closed up 1.5p at 245p last night.