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Skyline lifts tourism act

By Chris Hutching

Friday 23rd May 2003

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Queenstown-based public unlisted Skyline Enterprises has produced another bumper result, shaming rivals such as listed Tourism Holdings, which recently announced a profit downgrade.

Skyline's pre-tax profit was well up at $14.7 million ($12.3 million last year), and after providing for tax of $3.3 million ($2.7 million), the net operating surplus for the group was $11.4 million ($9.6 million) for the year ended March. Total revenue from all sources was $36 million ($31 million) up 16%. The share price is trading at $4-4.50, equating to market capitalisation of about $120 million.

By contrast, Tourism Holdings has three times the capital base but its market capitalisation is $90 million on the current share price of 90c. It expects to post an after-tax profit of $6-8 million on revenue of about $150 million. THL has blamed the Iraq war and Sars for the downturn.

But in Queenstown and Rotorua where Skyline operates, the tourist numbers remained buoyant during summer and the resort towns were going through the traditionally quiet pre-winter phase so the effect of international events was difficult to predict, Skyline chairman Barry Thomas said.

The Queenstown Skyline, complex had a record number of passengers (527,000, up 4%) and luge numbers almost the same as last year.

Skyline's Queenstown accommodation properties Blue Peaks Lodge and Mountain View Lodge lifted occupancy and profitability. Leisure Lodge Dunedin contributed solidly.

Earlier in the year Skyline told shareholders about the sale of Mountain View Lodge and it is expected after adjustments for valuation and depreciation this will result in a capital profit to the group of about $9.5 million.

Skyline Skyrides Rotorua set another record profit, with gondola numbers up 11% and luge rides at just under 800,000, up 12% ahead of last year.

Dividends from the company's substantial inves tments in Christchurch Casinos, Crowne Plaza Hotel Christchurch and Dunedin Casino increased to $4.8 million ($3.7 million.)

Directors intend recommending a dividend of 18c a share (14c last year) requiring $6 million ($4.7 million), a similar percentage payout to last year.

Mr Thomas said Skyline's Canadian luge venture at Mt Tremblant was well under construction, with an opening date expected in early June.

Skyline and Ngai Tahu are partners in a controversial $80 million gondola proposal between Queenstown and Milford Sound and they will decide this year if they intend to proceed.

European manufacturers are interested in the project, which would be the longest gondola in the world at 12.6km.

Skyline has appointed two associate directors, one of them Mr Thomas' son, Richard, who is the general manager of Mountain Scene newspaper (a private venture of Mr Thomas') and Jamie Luke, an accounting executive with Ernst & Young.

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