CARAVAN and motorhome maker The Explorer Group has recorded a £2.2m fall in profits, blaming the depressed retail market for its losses.
The Consett-based company has seen pre-tax profits fall from £2.9m to £758,000 in 2011 as consumers battle the recession and the credit crunch continues to restrict loan finance for purchases.
The Explorer Group’s latest annual report, for the 12 months to August 31 2011, outlines the challenges it has faced.
“There is little evidence of an improvement in retail sales particularly regarding the touring caravan and motorhome markets,” it says.
“Competition remains fierce and the availability of finance for dealers and consumers is restricted.
“The company intends to sustain its investment plans related to capital equipment and product innovation with a view to the continual improvement of its product portfolio and production processes.”
A spokesperson for Motorcaravan Motorhome Monthly Magazine said the industry on a whole has performed better than expected considering the current economic climate.
She said: “Figures are slightly down on last year, but retail sales are holding well considering the economic situation, which has been a bit of a surprise.
“There has been a drop in sales across the board, but not significantly.
“A lot of campsites have been booked up which is a good sign.
“However, motor homers have a tendency to buzz off for regular short breaks as they have a vehicle in which to do it.” Despite a drop in trading performance during 2011, the company said it has a sufficient level of financial resources available through its own banking facilities.
Looking ahead to the current year, the directors’ report says: “The directors believe that the company is well placed to manage its business risks and opportunities successfully despite the economic uncertainty.
“The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future.”
Explorer reduced staff numbers from a high of over 400 in 2007 to 316 at the end of the 2009 season. Between 2009 and 2011 it cut a further 60, bringing its total to 256 staff.
In its last financial year, the company, which has been owned by the London-based venture capital Constantine Group since 1994, posted a 40% rise in sales and returned to profit.
The 2010 season saw Explorer return to growth, posting sales of £49m and pre-tax profits of £3m despite little sign of improvement in the market.