Splash the cash

Graham Parr and his rise from Bluecoat to the boardroom at Pontin’s. By Mark Dunne

Graham Parr and his rise from Bluecoat to the boardroom at Pontin’s. By Mark Dunne

When Graham Parr spent two summers entertaining guests as a Bluecoat at Pontin’s Blackpool site in the late 1960s, he could never have imagined that one day he would return to buy the company.

After hanging up his Bluecoat, Parr moved into management and built up his own leisure businesses. He recently led Ocean Parcs, a consortium that paid £46 million for the seven-site Pontin’s operation. But this isn’t the first time its new executive chairman has bought the company.

Parr first took control of Pontin’s in 1987 after teaming up with Trevor Hemmings, a multi-millionaire racehorse owner who has BlackpoolTower among his assets, to buy the business from brewer Bass for £57.5 million. For Parr, Pontin’s was an obvious takeover target.

“I knew the business,” he said. “I’ve always liked the UK leisure industry in all its different guises and believed Pontin’s would be a good business to run.”

Two years later, Parr was proved right. UK beer and leisure group Scottish & Newcastle made a £115 million offer for the business, and the management team was quick to cash in on the value they had created.

The deal was more than double the price the pair had paid, which was due to the owners closing some of the sites and simply “cranking up the cash” to re-invest in the development of the business. “It was a profitable company then and still is, that’s why I’m here again 19 years later,” he said.

Second coming

Hemmings is once again involved in this latest takeover, but this time he’s on the other side of the table. He bought the company back from Scottish & Newcastle in 2000 for less than £30 million due to falling numbers of holidaymakers as more families chose to take advantage of cheaper airfares to spend their holidays abroad.

Parr has a controlling interest in the business after being joined in the deal by new chief executive Ian Smith, who has worked in some of his other businesses. The consortium also included property director Clarke Osborne and Parr’s brother John.

Parr refused to confirm whether Pontin’s new directors invested in the deal, but noted that funding was provided by Abbey Santander. Hemmings also retains a five per cent stake, which, according to Parr, is because he liked the incoming team’s plans for the business.

Buy-to-let plans

These plans include adding new sites to the portfolio and selling chalets on existing sites. “Instead of spending some £70,000 on a caravan or a mobile home, which has to be replaced every ten years because it’s a depreciating asset, families can buy bricks and mortar from us for £25,000 and we will let it for them.

“Some people are talking about buying more than one unit as the individual lenders can expect a return of between six and ten per cent in some of our camps that have almost 52-week occupancy,” he added.

Parr has already tested out the idea on the Isle of Wight where he built an up-scale holiday village, which he claims has experienced healthy sales. These development plans are in the pipeline, but the new executive chairman has already made a major change at the company. Its head office in Eccleston, Lancashire, has been closed to cut costs and operations have moved to the Southport holiday camp.

Although Parr is implementing some operational changes, he will not be running the company on a day-to-day basis. That responsibility falls to operations director George Edwards, who trained under Parr when he was managing director.

Despite press reports, one change Parr will not be making is to the company’s name. “I’m not planning to drop the Pontin’s brand. We might re-think or re-market certain parts of the organisation, but I’m not going ditch it totally because that would be like throwing the baby out with the bath water. It still has a reverence and gives security to a lot of people.”

Climbing the ladder

After his summer job at Pontin’s ended, Parr wanted to stay in the business and went to see Sir Fred Pontin who established the company in 1946. Pontin made him a trainee manager in 1971 and four years later he worked his way up to general manager of the Brean Sands site in Somerset.

When Sir Fred sold up to Coral Leisure in 1978, Parr was made regional manager for the Northwest, but in 1983 his skills were recognised by Grand Met Leisure, which poached him to manage its Warner’s holiday villages on the south coast.

By 1987 Pontin’s was in the hands of Bass, and Parr believed he knew the business well enough to run it and became managing director and a major shareholder after buying the company.

Since his first term at Pontin’s, Parr has kept himself busy. In the late 1980s, he bought the original Harry Ramsden’s restaurant in Leeds and expanded the brand around the world before selling to food group Granada in 1999 for a reported £20 million.

He also founded Arena Leisure to manage racecourses, including those in Lingfield, Wolverhampton, Doncaster and Worcester, and is chairman of greyhound track management group Gaming International.

Parr admits that he was lucky to buy Pontin’s for a second time as the business wasn’t on the open market, but his friendship with Hemmings helped close the deal. “I have known Trevor for a long time and had to approach him with the idea because he doesn’t sell assets as a general rule.” The second bid came on the back of growing attendances and Parr’s belief that there were several opportunities to develop its sites. “The great thing is that Pontin’s is attracting more than 750,000 people a year and this is set to rise in 2008.”

Parr claims this increase is down to a change in the way that people take breaks at Pontin’s. “A lot of our holiday business is driven by special events. During Easter, Camber Sands had a junior football tournament while Brean Sands had a weekend dedicated to rock group Queen. These sites are being used for different types of holidays, not just catering to the traditional family market.”

Another reason he believes attendances are on the up is that people are fed up with the hassle of airports. “Pontin’s bookings are up 15 per cent this year whereas easyJet and Ryanair bookings are going the other way.

“People are not bothering with overseas holidays to the same degree as they did,” he added. “There are queues everywhere; queues to check-in and to go through security. People get fed up of it, and if you are taking kids it isn’t much fun.”

This time, Parr’s second term in charge is likely to last a little longer than his original ownership as he reveals a five-year exit plan.

Marc Barber

Marc Barber

Marc was editor of GrowthBusiness from 2006 to 2010. He specialised in writing about entrepreneurs, private equity and venture capital, mid-market M&A, small caps and high-growth businesses.

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