All Leisure, the cruise line operator, has agreed to buy the lossmaking seniors’ travel specialist Page & Moy for £4.2m in cash to lessen its exposure to the volatile cruise market.
The company said it would suspend its dividend to fund the deal, which is being bankrolled by the company’s board members through a £5.8m loan, of which £4.4m comes from its founder and leisure sector veteran Roger Allard.
“We’re advising shareholders it’s unlikely we’re going to pay a dividend in the foreseeable future because we’ve borrowed money, but it’s an opportunity to grow the company,” said Mr Allard. “We’re targeting the fastest-growing demographic in the country with the most disposable income.”
Page & Moy, which also trades under the Travelsphere and Just You brands, focuses on guided culture tours by coach and air, targeting the younger end of the over-55 market.
All Leisure said part of the deal’s rationale was to introduce “more balanced” destinations such as China and North America to its travel portfolio.
All Leisure has endured a turbulent time since it listed on Aim at 180p in 2007. Although the company has been increasing revenues, profits have suffered during the past couple of years partly because of fuel price fluctuations. The company has paid a dividend throughout.
Shares were unchanged at 31.5p.