By adding a portfolio of five parks to its 15 existing parks, Parkdean is now the second largest holiday park operator in the UK. The company acquired the freehold parks from Bourne Leisure for £41.75m.

The sale was partially paid for with the placing of 10.35m shares, raising £20.7m. The shares, which were substantially oversubscribed according to chief executive John Waterworth, were placed at 200p each, just 0.05p below the company's share price. The remainder was paid for by debt, leaving only £5m left of its £32m bank facility. Interest cover next year will be 3.3 times. Four of the parks complement the company's existing site locations but the Norwich park enables it to enter the East Anglian market, an area it has been eager to expand into. Waterworth commented that as each site needs to create £400,000 in operating profits to be meaningful, future acquisitions will be selective. Trading for the year to October in holiday hire was 8.2% ahead of last year, but due to a quiet early September, consensus analysts shaved pre-tax profits £200,000 to £8.9m. This should rise to £11.43m in 2005. The forward EPS of 17.04p gives the group an appetising prospective p/e of 12.6. The shares have risen 14.5p to 214.5p in the last two days but are below the 242.5p reached when we reported on the company in March. Hold.

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