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Tourism Holdings asset sales keep earnings in the black

Wednesday 26th August 2009

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Tourism Holdings, the campervan rental company, posted an 80% decline in full-year profit, avoiding a loss with the proceeds of assets sales while it spent more on marketing to underpin revenue.

Net income dropped to $2.9 million in the 12 months ended June 30, from $14.3 million a year earlier, the company said in a statement today. Revenue edged up 1% to $138.9 million.

Annual profit included $4.3 million of gains from the sale of Kelly Tarlton’s, Milford Sound Red Boats and the company’s stake in bus company InterCity Holdings.

It posted a net loss from continuing operations of $1.4 million, which it said “reflects general trading conditions within the tourism industry at this time” and costs of $1.6 million for redundancies and restructuring.

Tourism Holdings has sold assets to concentrate on its core business as the global downturn saps demand from inbound tourists and increased its focus on the budget end of the tourism market.

Forward bookings indicate arrivals from Tourism Holdings’ source markets will fall 3% to 5% in 2010, it said. The coming high season “is likely to reflect the current economic climate,” it said.

It held revenue from rentals at $137 million, unchanged from a year earlier, while EBIT tumbled to $9.4 million from $26.8 million, on costs for marketing its Explore More low-end consumer offering.

EBIT at its Tourism Operations unit, Waitomo, where it is rebuilding its facilities, and Kiwi Experience, rose to $3.9 million from $3.2 million in 2008, helped by demand from backpackers.

Shares of the company traded at 1.8% to 56 cents yesterday and have declined 15% this year. The stock soared to as high as $2.76 in June 2007. It won’t pay a final dividend.

Businesswire.co.nz

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