viewIntosol Holdings PLC

Bespoke luxury holidays will be just the ticket for Brits believes INTOSOL

INTOSOL listed on the standard section of the main market in October and now wants to raise £5mln through an open offer

(Spectacular) view from Oceans Wilderness

Rainer Spekowius, INTOSOL Holdings PLC’s (LON:INTO) executive chairman, says he fell in love with safaris almost twenty years ago.

He was doing PR work for the South African government at the time, but even though he has been on countless more since that same tingle of excitement is still there.

WATCH: INTOSOL positioning itself to become a leading luxury bespoke travel company

Given that, perhaps it’s not surprising that he has ditched the PR and now heads INTOSOL, which specialises in safaris and other types of luxury holiday worldwide.

INTOSOL listed on the standard section of the main market in October and now wants to raise £5mln through an open offer to expand its portfolio of top spec hotels.

Spekowius believes luxury travel will be a long-term growth market and the company having established itself in Germany and Switzerland he now wants to test the British appetite for destination holidays.

Travel agency at the core

At the core of the business is the travel agency that arranges bespoke luxury holidays.

This division has contracts with 3,500 hotels and agencies worldwide and a client base of over 15,000 high-end clients from German and English speaking markets.

More recently, the group has moved into the operating end of the market through its SOUL Private Collection of five high-end luxury hotels.

INTOSOL acquired its latest addition, Ocean Wilderness in South Africa, last year and it’s a place Spekowius describes as having one of the world’s best beaches.

“It’s a beautiful, beautiful place.”

But it’s not just the aesthetics he likes, there is a commercial element too.

Operating hotels helps profits

Oceans Wilderness is the first hotel acquired by INTOSOL – the rest are leased or managed.

“It already gives a major push to profitability and is a showcase to investors of what happens when you allow us to buy more properties.”

In the tour operating business, for example, gross margins are 21% on average, but in the first months of owning Oceans Wilderness, its gross margin was 79%.

“The second reason for expanding our portfolio is that we provide high-end holidays and we have to be sure the customer is 100% happy and experiences something very special.

“If we give the client to a third party, we don’t know exactly what has happened and although we know the hotel there is still a risk that the guest might be unhappy.

“Running our own properties means we can make sure the guest is 100% happy as service is very important for us.

“Since we started to run our own hotel portfolio, our rating for client happiness on TrustPilot is 95%.”

Revenues in the period June to January 2018 were £6.5mln.

Open offer

Dependent on how much money is raised from the open offer, INTOSOL will pay off the outstanding amount on Ocean Wilderness and expand starting with the Leadwood Game safari resort in South Africa.

Cashflow will pay for the development of the British end of the business. The offer opens on November 6, with the price range set at between 100p -200p per share .Final pricing will be November 20 and the number of shares to be issued will be adjusted for the final price.

Spekowius currently owns 57% of the shares, but his holding will be diluted by the open offer.

He is confident Brits will embrace safaris every bit as much as he does.

Three staff are already based in Cape Town to handle the expansion.

“British people love it,” he says.

At 102p currently, INTOSOL is valued at £11.7mln.

Quick facts: Intosol Holdings PLC

Price: 8 GBX

Market: LSE
Market Cap: £1.19 m

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