Center Parcs targeting wellness market as it reports pre-tax profit dip amid ‘challenging external environment’: Center Parcs is tapping into the wellness market as it reported a fall in annual pre-tax profit amid a “challenging external environment”. In the year to 18 April 2024, revenue at its six-strong UK and Ireland operations rose 5.2% to £704.1m (2023: £593.8m), of which £417.9m was for accommodation and £286.2m for on-site spending. However, pre-tax profit fell 18.7% to £98.4m, from £121m previously. Ebitda increased 1.9% to a record £310.5m, up from £304.6m in 2023. Center Parcs said it had achieved 97% occupancy and had welcomed 2.3 million visitors. Chief executive Colin McKinlay told The Times the company remained committed to securing a new site after being forced to scrap plans to develop a holiday village near Crawley, West Sussex, over environmental concerns. Brookfield, the Canadian group that bought Center Parcs in 2015 for more than £2.4bn, had intended to use the development of the site as a platform for growth and to attract suitors keen to acquire the company. Despite the setback, Brookfield pressed ahead with an estimated £4bn-plus auction of Center Parcs. However, in November last year Brookfield cancelled the process amid adverse market conditions. Center Parcs recently refurbished its spa in Elveden Forest, Suffolk, as part of £83m investment throughout the group. The company is also adding another 85 lodges. Its year-end net debt fell from £2.48bn to £2.32bn, largely thanks to the refinancing of its Irish debt facility. The company is tapping into the wellness trend by marketing its Aqua Sana spas to external users. McKinlay said the group would shortly start a €100m expansion of Longford Forest, its village in Ireland, adding 198 new lodges, increasing the capacity to 3,500 guests and adding a new restaurant and leisure facilities, as well as expanding the existing Subtropical Swimming Paradise and Aqua Sana spa. Asked whether Center Parcs could develop standalone spas away from its villages, McKinlay said the focus would be on putting more “marketing horsepower” behind the current spas, but added: “I wouldn’t rule it out.” Center Parcs features in the Propel Turnover & Profits Blue Book, which is available exclusively to Premium Club members and features 947 companies. Center Parcs’ turnover of £704.1m is the 19th highest in the database. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email kai.kirkman@propelinfo.com to upgrade your subscription.

Activist investor builds sizeable stake in Starbucks: Activist investor Elliott Investment Management has built a sizable position in Starbucks and has been discussing ways of improving the company’s share performance. Starbuck's share price, which has lost 23% over the last year, jumped nearly 7% to end trading at $79.27 on Friday (19 July) following the news, which was reported by the Wall Street Journal. The share price took a hit in April when Starbucks reported a drop in like-for-like sales for the first time in nearly three years. It also reported lower than expected profit as it grapples with weaker demand in the United States and China, its two largest markets. The results led the company to cut its annual sales forecast. They also prompted former Starbucks chief executive Howard Schultz, who remains one of its biggest investors, to write on LinkedIn that the business needs to overhaul its US operations. Schultz, who had been Starbucks’ chief executive three times, stepped off the company's board in 2023, a few months after hiring Laxman Narasimhan, a former PepsiCo executive and Reckitt Benckiser chief executive, to lead the business. Starbucks stands accused of prioritising sales volumes over the in-store experience, which was once central to its appeal. Comfy leather armchairs have been replaced with wooden chairs; handwritten names on cups have been exchanged for printed tickets; and critics said baristas are too busy juggling in-store, app and drive-thru orders to chat. Some disgruntled app users, who account for nearly a third of American purchases, have complained of overly long waiting times, which analysts believe have been the biggest drag on sales, reports The Times.