DISL Discover Les.

    RNS Number : 0364D
  Discover Leisure PLC
  09 September 2008
   

    FOR IMMEDIATE RELEASE
    9 September 2008

    DISCOVER LEISURE PLC
    ("Discover Leisure" or "the Company")

    TRADING STATEMENT

    Profits to be below market expectations
    Reduced demand across the UK leisure vehicle market
    Company profitable throughout the second half year
    Share of motorhome market above 7% in June and July
    Focus on cost and stock/cash management

    In May 2008 we reported that first half results were in line with expectations but the outlook for the second half was more uncertain
and meeting full year expectations would be a challenge. In the event, consumer confidence fell further in the summer period and led to a
reduced demand across the UK leisure vehicle market. Whilst the company has been profitable throughout the second half year, lower than
expected volumes and higher interest charges mean that headline PBT (before exceptionals and costs related to share based payments) is
anticipated to be materially below current market expectations. Revenue for the year was approximately �138 million.

    In response to the weaker market, Discover has taken additional measures to gain market share, to reduce costs and to optimise working
capital as follows:

    *     From less than 1% of the UK motor home market twelve months ago, Discover's share has risen via acquisitions and sales campaigns
to over 7% in June and July 2008.
    *     Starting in May this year, the online sales operation has grown strongly to achieve a turnover of �205,000 in the months of July
and August combined.
    *     To cater for changed customer budgets, the new motorhome rental business began in July and has already received 500 enquiries and
sold 78 rentals in its first eight weeks.
    *     In total, the Company's quality of earnings has improved with the higher margin after-sales business rising to 13% of total
turnover and 35% of total gross profit.
    *     A cost saving programme has been implemented which has already reduced expenses and which will accelerate in scale over the next
three months. 
    *     The weakening of demand has lead to higher vehicle stocks but, with revised purchasing plans, stock levels are falling and as a
result debt levels are reducing. The overdraft improved by �1.8m in the month of August.
    *     For the new 2009 models, smaller purchase quantities and shorter re-order times are being negotiated with manufacturers to reduce
average stock levels.

    Company debt at the end of the financial period is expected to be approximately �22m. This compares with �11.2m last year with the
change mainly being due to higher stocks. The increase is principally due to the acquisition of the Cannock dealership, the roll out of
motorhomes across the group, the enlarging of the stock ranges in the two redeveloped retail stores and the introduction of the rental
fleet.

    The Company will be assessing the appropriateness of stock and debt provisioning levels ahead of the preliminary results which are
expected to be announced on Monday, 1st December 2008.

    For the traditionally quieter first half of the new financial year, the Company is expecting the difficult trading conditions to
persist.  Fortunately we are now largely free from the extra load of acquisition integrations and, whilst we expect that the new online and
rental businesses to continue growing, our focus will remain firmly fixed on cost, stock and cash management where we expect the current
programmes to deliver an increasing scale of operational improvements.

    For further information, please contact:

 Discover Leisure plc          Tel: 01430 803 385
 David Morrow, Chairman
 Trevor Parker, Chief
 Executive
 Neil Harwood, Finance
 Director  

 Panmure Gordon & Co    Tel: 020 7459 3600
 Andrew Godber
 Stuart Gledhill

 Cubitt Consulting Limited     Tel: 020 7367 5100  
 Brian Coleman-Smith
 James Verstringhe
 Nicola Krafft

    Background Note

    Discover Leisure, formerly Titan Move, was originally established as a cash shell to acquire businesses in the leisure and tourism
sector. The Company floated on AIM in May 2005 and, in August 2005, it acquired the company which owned Harringtons Caravans Limited, the
retailer and specialist in the caravan and leisure industry. 

    On 8 September 2006, Discover Leisure acquired Leisure World, which owned four caravan retail outlets, for �5.75 million, followed on 3
July 2007 by the acquisition of Barrons Holdings, a leading retailer of caravans, motorhomes and associated accessories with seven retail
branches across the country, for �20.0 million. On the same date, Mendip Caravan Centre, which operates three retail branches, was purchased
for a total consideration of �2.2 million. On 12 March, 2008, Discover Leisure announced the acquisition of the motor homes dealership based
on a five acre site in Cannock in Staffordshire from the Brownhills Group for �2.66 million.

    The Group now has 16 branches employing over 600 people across England and Wales. The branches are located at: Birtley (Tyneside),
Cannock (Staffordshire), Cardiff (South Wales), Delamere (Cheshire), Chorley (Lancashire), Warrington (Cheshire), Carlisle (Cumbria),
Darlington (County Durham), Evesham (Worcestershire), Herne Bay (Kent), Newport (South Wales), Orpington (Kent), Portsmouth (Hampshire),
Weston-Super-Mare (Somerset), Wrexham (North Wales) and York (Yorkshire). Its head office is situated in East Yorkshire.

    The board consists of David Morrow, Chairman; Trevor Parker, Chief Executive; and Simon Dixon, a Non-Executive Director, who were the
key elements of the management team that grew Dixon Motors into an �800m turnover group prior to its takeover by the Royal Bank of Scotland.
Neil Harwood, the former Finance Director of Barrons Holdings, became Group Finance Director following its acquisition by Discover Leisure.
Ian Currie of Zeus Capital, the Group's Financial Adviser, is also a Non-Executive Director and was closely involved in the formation of the
Group.  

    The Group's strategy is to lead the consolidation and modernisation of caravan and motorhome retailing in the UK, which will also create
opportunities to sell outdoor leisure products from sites and over the internet.

    The Market 

    The UK caravan, motorhome and camping equipment sector is valued at more than �1.6 billion per annum and, on the directors' estimates,
the UK outdoor clothing and equipment sector is valued at more than �1.2 billion per annum.

This information is provided by RNS
The company news service from the London Stock Exchange
 
  END 
 
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