Financing costs and hedging push Center Parcs into the red

Sales at Center Parcs rose by almost 10% last year but the business was reportedly pushed into the red by one-off financing costs and losses on a hedging deal.

The company, with five holiday villages across the UK, changed hands last August when it was bought by Canada’s Brookfield Asset Management from private equity giant Blackstone.

In the 12 months to last April, takings rose to £420 million from £385 million the previous year, and underlying pre-tax profits jumped from £22.8 million to £57.3 million.

But Center Parcs recorded a one-off financing cost of £42 million – far higher than the previous year’s £6.4 million.

The company also had to swallow a £16.8 million paper loss on financial derivatives, The Sunday Times reported.

These costs pushed the holiday park operator into a pre-tax loss of £6 million for 2015-16, against a profit of £22.7 million the previous year.

The latest Center Parcs village to open is Woburn Forest in Bedfordshire and the company recently won planning approval for its first resort in Ireland.

The company will develop a 395-acre site near Ballymahon in County Longford, into what will be its sixth resort.

Center Parcs Longford Forest will cater for up to 2,500 holidaymakers and is expected to open in 2019.

The development will include 470 lodges and 30 apartments, more than 100 indoor and outdoor family activities, a spa, restaurants, shops and cafes and an indoor subtropical swimming complex.

It is estimated that the project will add €1 billion to Ireland’s GDP over a 20-year period.