Pierre & Vacances-Center Parcs: 2019/2020 First Half Results
Growth momentum in operating performance slowed by the first effects of the Covid-19 crisis
Change Up strategic plan underway
Impact of Covid-19 health crisis on the Group’s activities and financings
In application of the health emergency measures decided by government authorities in the countries where Pierre & Vacances-Center Parcs is located, the Group closed virtually all of the sites it operates over the period spanning from mid-March to early June.
For the first half of the financial year (1 October to 31 March), lost earnings in terms of accommodation revenue stood at €31 million due to the halt to activity over the last two weeks of March. Third quarter revenue will be the worst hit, with two months of no activity and a very gradual recovery in June.
In this backdrop, exceptional measures were implemented to reduce costs and preserve cash: flexibility of staff costs through partial unemployment, adapting on-site spending, rental payments suspended over the closure period. In addition, negotiations are underway with property-owner investors concerning the impact of the crisis on the financial terms of the lease.
The Group also mobilised all of its financing sources in order to overcome the period of lacking tourism revenues. On 31 March 2020, available cash therefore totalled €253 million. In addition, and given uncertainty related to the pace of the recovery in activity, the Group was granted a €240 million state-backed loan by its pool of banks. In addition, banking and bond lenders unanimously agreed to renounce the Group’s commitment to respect its financial ratio on 30 September 2020 and provided additional room to manoeuvre for the ratio to respect on 30 September 2021. Elsewhere, the maturity on the €200 million revolving credit line, initially maturing in March 2021, was prolonged by 18 months.
The fact that the Group was granted these financial arrangements and the state-backed loan illustrates the confidence our financial partners have in our ability to manage this difficult period and to capture the growth expected in demand from family customers for local tourism holidays once the lockdown period ends.
H1 2019/2020 revenue from the tourism businesses totalled €547.4 million, up +0.7% relative to H1 2018/2019.
This stability stemmed from:
excellent operating performances for all brands, achieved over the half-year period prior to the crisis, with growth in accommodation turnover of 6.7%;
the impact of the Covid-19 crisis, which resulted in lost accommodation revenue of €31 million (€15 million for the Pierre et Vacances Tourisme Europe division and €16 million for the Center Parcs Europe division) related to the closure of virtually all our sites over the second half of March.
Growth in accommodation revenue of 6.7% excluding Covid-19 was primarily driven by the rise in net average letting rates and concerned both:
Growth seen in the first quarter (+9.3%) increased during Q2 (+11.5%). Growth in activity concerned both the domains located in the Netherlands, Germany and Belgium (+11.1%) over the half-year period and the French domains (+8.9%, o/w +7.4% for the Center Parcs domains, and +19.7% for Villages Nature Paris).
- Pierre & Vacances Tourisme Europe: +2.0% like-for-like.
This performance was driven by mountain residences (+3.2%), which benefited from higher net average letting rates of almost 8% and an average occupancy rate of 93% in Q2, and from all the seaside destinations (+3.2%). Activity at the Adagio residences was stable over the period.