Hays Travel is looking to take out its first-ever loan to use as a “war chest” for further acquisitions.
Speaking on a Travel Weekly webcast, managing director John Hays said the Covid-19 crisis had not diminished a desire to further expand the business.
Asked if he and his co-owner and wife Irene were looking at acquiring any more companies, especially at a time when many could be struggling, Hays said: “I don’t want to predict but, depending on how long this goes on, clearly there’s obvious financial distress out there.
“We’ve already had Shearings fail, and there will probably be others, especially where companies are highly leveraged and have got big debts before they came into this. So the landscape will be different.”
Irene Hays added: “I don’t think we’re behaving any differently at all in that respect. As you can imagine, we’re having lots of approaches; we always have had. But at the minute, the prices might be a bit different. So we might look a bit more closely.”
John Hays continued: “We’re still looking to grow, same as always, if the right opportunity comes along. We feel we need to make plans to have rolling credit facilities in place should we need it, which we’re advanced on doing.
“We might not need it – our current plans are that we won’t – but we want it as a cushion. You asked about acquisitions, so in terms of having a war chest, it could be interesting for us.”
Asked if they would be interested in other businesses, not just retail, Irene Hays said: “Yes, we’re very open-minded and as we’re growing the Hays Travel tour operation, it becomes obvious that there are other niche businesses that would be very attractive to us.”
John Hays added: “The world has changed; that’s for certain. One thing we have done since the crisis is try and take more control of our own destiny. We’ve always had our own in-house tour operation and we’re doing more ourselves because it’s in our hands and we’re not dependent on third parties.”
He declined to reveal what proportion of Hays Travel’s overall business his tour operation now accounted for, but said: “Safe to say, it’s a bigger percentage than it was before this happened.”
Irene Hays said the company had completed an 18-month forecast based on the impact of the Covid-19 crisis, which “is not very pretty”. But she added: “We don’t think we’re going to be the worst around, and we’re taking all reasonable steps.”
She explained: “We’re taking advantage of all of the government schemes, as you would expect us to; and we’re probably going to have a look at a loan, although never in the history of the company have we had any debt. We didn’t need any to do the Thomas Cook transaction. So that will be a first, but from the point of view of being prudent, we’re having a look at that.”
She said a “minority” of staff were now on furlough, after the company brought 3,000 staff back to work, and noted that the company had “taken advantage” of business rates relief and grants during the crisis, and was negotiating with its landlords for payment holidays.
“We’re doing all sorts of actions to support the cash position . . . and miraculously, in the last few weeks, we’ve started selling holidays,” she said.