Trading Statement

Holidaybreak PLC
06 September 2006



6 September 2006

                            HOLIDAYBREAK PLC

                      Pre-close trading update


Holidaybreak, the European operator of specialist holiday businesses, today
releases its normal trading update prior to the end of its current financial
year.

Summary

• After eleven months of the financial year ending 30 September 2006, the
  Board believes that the financial and trading prospects of the Group remain
  satisfactory. Holidaybreak expects to again deliver double-digit margins and be
  strongly cash generative with year-end net debt substantially reduced.

• The diversity of Holidaybreak's businesses and their flexible cost
  structure means that the performance of the Group as a whole continues to be
  robust. The World Cup, recent terrorist threats in the UK and events in the
  Middle East and Turkey have not had a material impact on the Group's expected
  outcome for the current financial year.

• Given the strength of its balance sheet and its excellent cash
  generation, Holidaybreak remains well positioned to grow, both organically and
  by acquisition. Management continue to pursue several European acquisition
  opportunities in the specialist tour operating sector, with good margin and cash
  generation characteristics. Further announcements will be made if and when
  appropriate.

Carl Michel, Chief Executive, said: "With four weeks to the end of our current
financial year, Holidaybreak remains on target to deliver another solid
performance. We are market leaders in our specialist sectors and our businesses
enjoy industry-leading margins. In what may prove to have been a difficult
summer for the industry as a whole, I have been pleased with the resilience of
the Group and am confident that Holidaybreak, with its diversity of quality
businesses, will continue to prosper."

Trading update

After eleven months of the financial year ending 30 September 2006, Holidaybreak
is again expected to deliver double-digit margins and generate substantial
levels of cash. Whilst the recent terrorist threats in the UK and events in the
Middle East and Turkey have had a limited impact on the Adventure Travel
Division, the effect on the Group results for the current financial year is not
expected to be material.

Hotel Breaks

Hotel Breaks' overall sales intake for 2006 has continued to recover and is
currently marginally below 2005 levels. As anticipated, year on year sales
growth for the UK business improved after 7th July, against a weak comparative
period in 2005. We have seen a recovery in trips to London, particularly in
Theatre inclusive packages. In addition we have developed our relationships with
Virgin Rail and the Associated Newspapers Group, allowing us to grow new
channels and increase the range of packaged product. Our business model, with
hotel room allocations taken on an uncommitted basis, retains a high degree of
flexibility. In order to maximize the opportunities available to the Division,
we intend to increase ongoing spend by £1-2 million and expect to see the return
come through over the following years - one such area is in contracting more
European hotels.

Adventure Travel

The Adventure Travel Division looks set to report on another good year. Sales
are 11% up on 2005 equivalents and momentum has been maintained despite a
constant stream of adverse geopolitical events. Tour load factors have held up
but margins will be slightly lower due to increases in fuel costs in the air and
on land.

Forward sales at Explore and Djoser for 2007 are currently 7% ahead of prior
year. We are understandably seeing some short term quietening of interest to
Turkey and the Middle East and are cautious in our view on likely demand for
these regions, which account for approximately 17% of divisional sales.
Nevertheless one of the Division's strengths is the diversity of destinations
and products it can offer. Our diving business Regal continues to develop away
from the Red Sea and worldwide sales now account for 40% of its business.

Camping

The 2006 season is now virtually over. Sales in this Division are 9% down on
2006 but, with capacity cut by 16%, occupancy levels have improved by about ten
days versus last year, and high season has been filled at good yields. We have
been very encouraged by the progress made this year.

Over the last two years, the cost base and capacity of the Division have been
significantly reduced. Consequently, capital expenditure requirements have been
low. Although there are likely to be further small changes in capacity in 2007,
management believes Camping is now essentially 'right-sized' for the expected
market. Net capital expenditure for Camping in the coming year will be
materially higher than in 2005 and 2006 as older mobile homes are replaced at
the end of their useful lives. However, the Division once again is expected to
be cash generative and deliver good margins in 2007.

As announced on 2nd June 2006, the Board ended discussions regarding the
possible sale of the Camping Division, believing that greater value can be
achieved for shareholders by keeping Camping within the Group.

Outlook

The Board believes that the financial and trading prospects of the Group in the
current financial year are satisfactory and that the Group is well positioned to
respond to changing conditions and to exploit market opportunities.

Management continue to pursue several European acquisition opportunities in the
specialist tour operating sector, with good margin and cash generation
characteristics. Further announcements will be made if and when appropriate.


Enquiries:

Holidaybreak:                                              [phone]
Carl Michel/Bob Baddeley

Brunswick                                                  [phone]
James Hogan / Craig Breheny / Ash Spiegelberg


Note to Editors

1. Holidaybreak (HBR.L) is listed on the London Stock Exchange. The European
   specialist holiday group sold 3m holidays in the year ended 30 September 2005
   (2004: 2.3m). Holidaybreak has three operating divisions: Hotel Breaks,
   Adventure Travel and Camping. Each is a market leader in its respective
   specialist sector of the European holiday industry, has multi-channel
   distribution and is recognised for providing high standards of product and
   service quality. For more information, please go to www.holidaybreak.co.uk.

2. The company expects to announce its full year results on Thursday 30th
   November.






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