Shotover Jet Ltd
Half Yearly Statement
For immediate release
23 February 2000
Shotover Jet Ltd has recorded an after-tax profit of $211,000 for the six months ending 31 December 1999. This compares
with a profit for the same period in the previous year of $1.255 million (including a foreign exchange gain of $260,000)
on which no tax was payable.
At the time of the company's Annual General Meeting in September 1999, Directors advised that Shotover Jet Ltd was
trading comfortably ahead of the current year's budgets and the previous financial year. That situation continued until
early November. Since that time, three unforeseen and significant events have impacted negatively on the company's
half-year result:
1. The extensive floods in the Queenstown area in November (the effects of which carried over to December) adversely
restricted operations at the company's Queenstown-based subsidiaries (Shotover Jet Queenstown, Dart River Jet Safaris
and Goldfields Jet). While some recovery has been achieved from a loss of profits insurance claim for the Dart
operation, the inability to operate in flooded conditions, disruption to operations afterwards and the generally
negative effect on the tourism market in Queenstown as a result of the floods, has cost the company an estimated
$500,000 in profit contributions from these subsidiaries.
2. The accident at Shotover Jet Queenstown in November had a direct cost to the group in excess of $300,000. In
addition, the accident reduced capacity at Shotover Jet Queenstown for a substantial period which also affected
earnings.
3. The traditionally busy domestic season over Christmas/New Year was disappointingly quiet. The company attributes this
to concerns by the travelling public over Y2K issues and a substantial trend by domestic and international markets to
choose to spend the Millennium New Year "at home".
These isolated and unforeseen events cost the company in excess of $1 million in lost profit contributions over the
half-year. The Directors therefore consider that the half-year financial results are exceptional and are not indicative
of future trading periods. In these circumstances the company will not pay an interim dividend.
While early January trading in the second half of the financial year was quieter than in previous years, business
volumes have since picked up substantially and as a result, Directors believe the company will trade satisfactorily in
the second six months.
Directors consider the medium and longer term outlook for the company is positive with the tourism industry continuing
to benefit from favourable foreign exchange rates and the ongoing strong growth in visitor arrivals.
Considerable progress has been made during the year towards the renewal of the company's concession for Shotover Jet
Queenstown which expires in 2004. The Board looks forward to a successful conclusion later this year.
Satisfactory performances have been recorded in the main by operations outside Queenstown.
The Board is also pleased to announce the appointment of an additional Director, Mr Ross Keenan. Mr Keenan has
specialist expertise in the tourism sector, which Directors believe will be of significant value to the company as it
takes full advantage of the current upturn in the tourism industry.
In addition to a number of other directorships, Mr Keenan has held senior management positions in Air New Zealand and
Qantas, and was Managing Director of Newman's Group. Most recently, he was Qantas Regional Director for the UK and
Ireland.
In summary, this has been a six-month period in which the company has had to deal with a series of unprecedented one-off
events. These have fully tested the company's management, its marketing programme and its administration systems. The
company has responded to the events of the past six months with a high degree of professionalism in each instance,
proving the quality of its management and staff, the benefits of prior planning and the overall strength of the
organisation.
The company, management and staff are well placed to extract maximum benefit from the growing number of tourists
visiting New Zealand. Shotover Jet will continue to provide its unique high quality experience to the growing number of
tourists visiting New Zealand.
For further information please contact:
James Boult
Managing Director
Telephone: 0-3-442 7087