Yahoo Finance Holiday firm Parkdean ‘may run out of cash’ if lockdown is not lifted
Britain’s biggest holiday park operator could run out of money within weeks unless the lockdown is lifted, analysts have warned.
Parkdean Resorts is being squeezed by customers demanding refunds for holidays cancelled because of coronavirus, experts at credit agency Moody's said, with all of its 67 sites closed since Mar 23.
The chain - which has been offering customers up to £150 if they will take a travel voucher instead of a cash refund in a battle to keep going - is hoping to re-open on July 6.
However, it will only be able to act if coronavirus restrictions are eased.
In a report on the industry, Moody’s said: “[Parkdean] may run out of cash this summer if the lockdown is not lifted in the next few weeks and demand is slow to recover.”
The company said it has the full support of its owners and has several options available for survival. Industry insiders are praying that holidaymakers rush to Britain's beaches and countryside when lockdown rules are eventually relaxed.
A Parkdean spokesman said: “We are looking forward to opening in July and making the most of the staycation phenomenon.”
The majority of the Canadian-owned company’s 5,700 staff have been furloughed and it has entered into agreements with the taxman to delay bills.
Covid-19 hit Parkdean just weeks after it posted promising annual results. The firm's losses narrowed from £129m to £9m, according to accounts filed in February.
Boss Steve Richards, in his first year since moving from Cafe Rouge owner Casual Dining Group, ploughed £80m into the parks. The firm has launched “Survival Academies” at some sites in partnership with adventurer Bear Grylls, teaching children to live outdoors.
Parkdean was formed in 2015 through the merger of Park Resorts and Parkdean Holidays.
In the following year It was sold by private equity duo Epris and Alchemy to Toronto-based fund Onex for £1.4bn after a stock market float was shelved.
Analysis by Moody’s of European holiday and theme parks said Parkdean has been stung by several years of falling profits. Its debt pile of almost £900m is “very high”, the agency said.
However, Moody’s agreed that Parkdean could be well-placed if it is able to open in a month’s time.
Domestic demand will likely return more quickly than that from overseas. Analysts said: “[This means] Parkdean, which caters to a negligible number of international guests, should be in a better position."
