Holidaybreak Plc posted full-year results ahead of market view, sending its shares up almost 3 percent, but the British specialist holiday firm said sales intake in the current year to date was down 3 percent.
The company, which offers short breaks within the UK and Europe, said 2009-2010 sales intake for its adventure travel division was down 12 percent, while sales at its education division was in line with last year.
Education business is largely unaffected by the recession. Parents are still prepared to make sacrifice in order to send their kids on these educational trips, Executive Chairman John Coleman told Reuters in an interview.
Coleman said the education trips had been growing 10 percent annually for the last few years and expected the growth to continue.
Sales intake for the Hotel Breaks division is currently up about 4 percent from last year, reflecting improved demand in London, the company said.
Volume of domestic short breaks in the UK and the Netherlands (is) growing strongly on the back of increasingly competitive deals, the company said in a presentation to investors.
At least four brokerage firms, including KBC Peel Hunt and Numis Securities, said full-year results were ahead of their expectations.
Results came in ahead of our expectations, predominantly due to a better-than-anticipated outcome at adventure (business), KBC Peel Hunt said in a note to clients.
The brokerage said 2009 had been a busy year for the group and it entered fiscal 2010 in better shape for it.
Holidaybreak said headline pretax profit was 28.4 million pounds ($46.9 million) for the year ended Sept. 30, compared with 32.6 million pounds in the previous year.
Pretax profit fell 77 percent to 5.4 million pounds, including impairment of goodwill of 9.6 million pounds.
Revenue rose 4 percent to 473.4 million pounds, helped by a 12 percent rise in sales at its education division.
The company recommended a final dividend of 7.9 pence, compared with last year's 5.73 pence, which was restated for a rights issue.
Holidaybreak's shares were up 6.25 pence at 254 pence by 1300 GMT on Friday on the London Stock Exchange.
The shares have lost 11.4 percent in the last three months, compared with a 3.4 percent rise in FTSE all share travel & leisure index .FTASX5750.
The shares have been undermined by poor sentiment in the tour operating sector, but Holidaybreak should be relatively less vulnerable to sterling weakness and is exposed to more defensive markets, Numis Securities said in a research note.
Numis upgraded the stock to buy from add following the recent share weakness.
Holidaybreak's rival Hogg Robinson posted a fall in half-year profit due to lower activity levels during the summer trading period.
(Reporting by Purwa Naveen Raman; Editing by Deepak Kannan and Gopakumar Warrier)