A LEADING caravan retailer's ongoing financial problems led to its shares being suspended yesterday.

Discover Leisure, which owns the former Barrons dealership at Burtree Gate, Darlington as well as outlets at York and Birtley, County Durham, had earlier admitted it was unlikely to secure the funds needed to keep it trading.

In a statement to the London Stock Exchange the East Yorkshire based caravan and motor home firm, which also has two branches in the North West, said that its shares on the AIM had been suspended at its own request "Pending clarification of its financial position."

It went on to say: "The board has continued to vigorously pursue a number of opportunities to find additional finance to secure the on-going trade of the business.

"Despite the extremely challenging trading conditions and financial environment, the board has had some success in finding financial investors who have indicated an intention to invest additional capital or acquire certain assets of the Company.

"However, the Board now believes that it is increasingly unlikely that an acceptable solution to the funding issues which the Group faces can be secured in the necessary timeframe."

The group, which employs 250 people around 60 of them at Darlington, had said in April that it was continuing to be hit by the economic downturn, which had seen a decline in demand for leisure vehicles of around 40 per cent over the past three years.

The group undertook a restructuring of the business in 2009 which included a Company Voluntary Arrangement (CVA), refinancing of its banking facilities and closure of eleven of its trading sites.

It led to the firm being bullish about its prospects as it saw losses slashed to £1.8m in the year to August 2010 compared to a £17.37m loss in 2009.

But with weak margins in the marketplace, in April it had predicted a challenging second half to this year and this has proved to be the case, with UK sales of both tourers and motorhomes in the three months to August 2011 both down from what were already poor sales in the same period of 2010.

The situation appears to have further deteriorated in just a matter of days as the firm released a business update on Monday when it admitted having financial difficulties.

In the year to August turnover had reduced to £49.8m compared to £52.3m the year before and the firm had an estimated net debt of £10.1m, with losses before tax of £1.5m.

In Monday's statement it said that while benefiting from its existing lending facilities it recognised the need to secure additional finance.

It stated: "Profits in the second half of the year have not been sufficient to offset the previous winter losses and therefore the finances of the business have come under increasing pressure.

"With low season conditions already in place and the expectations of a continued difficult trading environment, the group will come under further significant pressure this autumn and into the winter."