“LES FLAMANTS” ASSOCIATION         Lattes,July 2008

Lac des Rêves

34970 LATTES

Telephone: 06-70-28-16-90

Minutes of the meeting on 03/07/2008 with the SIBLU Management

Present:

SIBLU: Mr Ian SMITH Director of SIBLU France

Mr Bruno GUILLOU Regional Director of SIBLU

Mr Darren SCHULLER Director of the Lac des Rêves Park

Les Flamants Association: Mr Henry SAGE President

Mr Edmond LERCH Delegate President

Subject: Our letter to Mr Ian Smith concerning the increase in site fees

(see end of newsletter edition no 8)

1. Introduction

The purpose of this meeting was to resolve the crisis of lack of confidence between the Owners of the campsite Le Lac des Rêves (amongst others) and the company SIBLU. The growing discontent in connection with the high level of increase in site fees was going to lead to confrontation, and the threat of a blockade at our campsite was going to be put into action. In this tense situation, the Management of SIBLU has made several positive moves:

• Mr Smith written reply to our letter,

• SIBLU Code of Practice, available at Owners’ Reception and also on the SIBLU website (we have been asking for such a code for the last two years),

• The meeting referred to in these minutes.

After the usual greetings, coffee/croissants offered by SIBLU, we got down to the heart of the matter.

2. Increase in the Site contracts

1.  

   • SIBLU accepts that the increases are high, linked to the cost of services, to inflation and to the investments in the Parks concerned.

   • Nevertheless, SIBLU remains convinced that it offers its owners a good deal as regards quality/price. The rarity of available plots on certain SIBLU parks is proof of this fact. (yesterday certainly, but tomorrow?).

   • SIBLU is aware that, in the present financial climate, efforts in connection with competitiveness must be made to reduce the running costs of the parks.

   • SIBLU considers that it must in fact make a particular effort to limit the increases in 2009 and must publish its fees in August or September at the latest to give owners a reasonable length of time for reflection.

   • SIBLU makes it clear to us that the money spent on recent and numerous acquisitions is absolutely not taken from the Park contracts, but comes from a financial scheme provided by Hermes Private Equity and Barclays.

   • SIBLU adds that, in spite of a downward turn in the economic market, this investment remains sound.

   • SIBLU thinks that its relationship with the Authorities has greatly improved. This makes communication easier but in no way allows it to ignore the key points of the regulations.

Our reaction to these statements:

1.  

   • Better communication by SIBLU would have been able to clarify the financing

of the new camp site acquisitions while still highlighting the business dynamic of SIBLU.

1.  

   • We expressed our concerns regarding these numerous acquisitions (6 camp sites in 2 years approximately), obviously decided with a better economic environment in mind.

   • We take note of an evolution of policy in SIBLU which, previously undertook the running of camp sites and sold the occasional mobile home, but now has positioned itself more as a seller of mobile homes and only by obligation as a site manager.

   • Without real competition in the market, we are obliged to note that the companies active in this business, earn very high profit margins on the sale/trade-in of mobile homes (the average profit generated by the sale of a mobile home must be in the region of 15000)

   • We insist on the urgent need to restrict expenditure and limit investment in our site to that which is strictly essential in the present context

   • Knowing that, at the end of the day it is the owners who finance the investments in their parks, we asked to be informed and even consulted about all significant works

   • In its Code of Practice, SIBLU promises clear and concise language; we contest this on at least one point:

In its park price list SIBLU specifies a reduced tariff for those who have bought their mobile homes through SIBLU, but as we know that these people represent over 95% of owners, can one really talk about a ‘reduced tariff’ or shouldn’t one quite simply talk about a ‘normal SIBLU tariff’ ?

1.  

   • The entrance fee, currently 6500, is still disputed and considered as non applicable, especially as the payment of this fee still does not put the owner at equality with those having purchased via SIBLU (annual surcharge of approximately 700).

3. Conclusion

Having noted signs of goodwill on the part of SIBLU, we have stated that the Association will probably agree to ‘keep its powder dry’. But, be warned, if the promises made are not reflected in the 2009 contracts there will inevitably be confrontation.

We have confirmed our willingness to motivate/join with other owner associations on SIBLU Camps on condition that these associations work, as we do, in a spirit of dialogue.

Generally speaking it should be realised that the site fees will inevitably remain high and that the sub-letting programme will only improve the situation for a certain length of time. On this subject we would like to re-establish the truth using a simulation made by Mr CRABBE which appeared in SIBLU Mag Nr 5 August 2007:
at the end of a 7 years sub letting program an owner receives a trade-in of 2650, but the simulation simply ignores the cost of the 30000 invested money and the rapid depreciation of this new mobile home. The article concluded ‘Certain things speak for themselves…’ , was he making an allusion to the biased presentation of the facts ?

Clearly, cost of money, site fees and depreciation of the mobile home lead to an annual cost on our park of between a maximum of 12000 and a minimum of 4000, this minimum applicable only in case of sub-letting.

At the end of 2006, Leslie HURST, CEO of SIBLU, justified his interest in investing in camp sites in France by saying this is a very new market and full of opportunity; be warned, he did not say a market where it will be easy to part people from their cash. The corresponding business plan was accepted without problem because the sale of the first fleet of mobile homes on each new site generates theoretically in a few years enough cash to repay the cost of acquisition of the site and its installations. It is clear that the British funds put at the disposition of SIBLU France for its development are welcome, but we wish to avoid a situation where one day these investors will come and thank us for our great generosity.

We all appreciate the quality of life on this beautiful site and we shall fight to remain here in the best conditions possible. Consequently we have renewed our confidence in director Darren SCHULLER.To conclude, we wish long life to SIBLU France but also wish to make a solemn appeal for the company to return to a more equitable business model, beneficial to both parties, that is to say non-confrontational.

(signed) (signed)

Henry SAGE Edmond LERCH

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