Strong kiwi pushing Tourism Holdings to first-half loss

Monday 18th October 2010

Tourism Holdings, the campervan rental company, expects to post a first-half loss of up to $1 million as the strong kiwi dollar saps demand from British tourists.

The company said New Zealand’s currency helped depress the number of UK visitors, which are down by about 5% from a year ago, and cut the hire period by some 10% as tourists reduce the length of their visit.

THL held off from making a forecast when it released its annual report last month, saying October is traditionally a strong month for bookings.

“In September we indicated that the current performance showed a softening in the backpacker and UK markets in particular and that the strength of both the Australian and New Zealand dollars internationally was contributing to lower spend."

“During September and October we have seen further adverse impacts from these factors on both first quarter performance versus last year and the forward bookings as we head into the high season.”

The shares fell 3.3% to 88 cents in trading today, turning around a 3.3% gain before the statement was released.

The strength of the kiwi dollar has been an issue for many exporters, who have struggled to maintain their competitiveness in a slowing global economy.

The kiwi has gained 5.2% to 47.20 pence this year. The company reaffirmed its commitment to paying a 2 cents per share dividend on Oct. 29, and will give more full-year guidance in its first-half result when it’s announced in February.

Businesswire.co.nz

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