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Southern Travel posts first-half loss as swine flu, downturn hurt sales

Tuesday 16th March 2010

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Southern Travel Holdings, a travel and tourism services company, posted a first-half loss as swine flu, the global financial crisis and unfavourable foreign exchange movements hampered sales.

The net loss was $538,000, or 2.49 cents a share, in the six months ended December 31, from a profit of $503,000, or 2.73 cents a year earlier, the company said in a statement today. Revenue fell 27% to about $10 million.

The global economic downturn and outbreak of swine flu curbed demand from key markets such as inbound Japanese students. Last May, Southern Travel announced that 700 Japanese bookings had been cancelled, with many more expected. The results included a $105,000 foreign-exchange loss, compared to a gain of $847,000 a year earlier.

“It will be 2011 before we can predict an improvement in results, which we consider acceptable for a company of our strength and size,” said chairman Rodney Walshe.

The shares, which trade infrequently, were last at 15 cents on March 8 and have declined 10% in the past year. The company won’t pay a first-half dividend.

“We still have a way to go to achieve an acceptable profit level and demonstrate value for our shareholders,” Walshe said.

The company has continued to make significant savings in its inbound cost structure, win new contracts in its representation business, and continue to develop and grow its website, he said.


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