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Tales of woe at Shotover Jet

By Phil Boeyen, ShareChat Business News Editor

Tuesday 29th August 2000

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Tourism operator Shotover Jet is blaming a combination of factors - including flooding, an accident and a political coup - for its poor full year result.

The company managed to notch up a profit of less than half million dollars for the year to the end of June, compared with $2.7 million for the same time last year.

An accident at Shotover Jet Queenstown in November last year bears the brunt of the blame, with the company saying it had a direct and significant cost to the company. It says there was also an ongoing effect for the period through damage to the business, and loss of capacity.

Floods in the same month restricted operations at the its Queenstown based subsidiaries - Shotover Jet Queenstown, Dart River Jet Boat Safaris and Goldfields Jet.

New Zealand's much-hyped but unrealised millennium tourism boom also came in for some heckling from Shotover Jet. It says the trading period over Christmas and New Year did not produce the revenues anticipated by most operators in the industry and this was compounded by the fact that the company had increased its staffing levels to cope with the predicted business levels.

A wet summer period in the Queenstown area cost the company further business losses, especially at its Shotover Jet service, where lost trip departures as a result of weather conditions were ten times higher than the average of the 3 previous years.

Lastly the company says the coup and associated political unrest in Fiji gravely affected its business there, resulting in a temporary shut down of Shotover Jet Fiji. It says the timing of the coup was particularly unfortunate, because it coincided with the start of the prime tourism trading period, which is counter cyclical to its New Zealand operations.

As a result of the ongoing political uncertainty in Fiji, directors have written down the assets of the Fijian subsidiary by $242,000.

Despite such negative factors, Shotover Jet's directors appear to be of the "glass half full" variety, and point out that the factors were for the most part unavoidable and that shareholders should note that in other respects the company traded satisfactorily during the year.

The directors say don't believe that any of the past year's problems will have a long term effect, and they foresee a return to normal trading conditions this year, with a positive view for the medium and long term.

No final dividend was declared.

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