Discover Leisure, the leader in the UK caravan retail market, produced profits in line with expectations last year and has provided an upbeat view of the current year – despite the credit squeeze.

With two month’s contribution from a brace of acquisitions, the Yorkshire outfit saw sales for the 12 months to August accelerate by 225% to £54.3m and profits by 37% to £422,000 over 2006’s 16-month reporting period. Discover Leisure's purchases of Barrons and Mendip have created a group with annualised revenues of circa £150m.

As the size of the business grew and with £20.8m raised to fund the new additions, a new £63m refinancing consolidating all loans into one, cutting interest and stockholding costs, and paring gearing back from 124% in August 2006 to 38%.

Discover Leisure's broker, Panmure Gordon, forecasts £3.5m pre-tax in the current year, which sits well beside the current market capitalisation. The broker also believes the company’s land holdings are worth at least £20m – and could be worth as much as £30m.

Tipped here in July at 24.5p and now 15.75p, the shares have disappointed thus far. But with much to come from its acquisitions and strong asset-backing, this business is for holding.