Tourism Holdings Limited Doubles Profit to $5.2m

Tourism Holdings Limited Doubles Profit to $5.2m Interim dividend payment of 4c per share

Auckland, New Zealand: Tourism Holdings Limited (THL) today announced a doubling in after-tax profit to $5.2 million for the six months to 31 December 2002, up from $2.6 million for the corresponding period the previous year.

Excluding one-off items, a $4.3 million profit was achieved which is 43% higher than the $3 million reported for the six months to December 2001.

As a result of the profit rise, the THL Board is recommending that THL pay a fully imputed interim dividend of 4 cents per share payable on 11 April 2003 for shareholders of record on 4 April 2003.

During the reporting period, the company’s strong financial position was reinforced by positive operating cash flows of $18 million which together with $13 million in cash realised from the sale of The Helicopter Line, Mount Cook Skiplanes and Treble Cone Skifield enabled THL to reduce debt to $56.2 million. In the last six months, debt was reduced by $20 million or 26% while $21 million was reinvested into new plant and equipment.

As at 31 December 2002, the debt to debt + equity ratio had improved to 29%, down from 45% a year earlier.

Mr Smith said “THL will continue to take a prudent approach to debt and cash management to allow THL to realise growth opportunities or ride out any downturn in tourism sparked by terrorist attacks or other external shocks.”

The Board has considered various ways to improve the capital efficiency of THL’s Balance Sheet and increase its earnings per share (EPS). However, in light of current uncertainties created by the high probability of an Iraq war, possible future international terrorism attacks and potentially the North Korean situation, the Board has postponed an announcement on a capital restructure.

Mr Smith went on to say “market predictions of a full-year net profit after tax (NPAT) of $6 to 8 million are achievable, providing the current level of forward booking intakes are maintained.”

Mr Smith noted “the New Zealand tourism industry has bounced back to pre-September 11 levels while the Australian market continues to be depressed after the collapse of Ansett Australia, the terrorist bombings in the USA, and the possible direct Australian military involvement in the Middle East. Nevertheless, we are committed to our long-term strategy of building on the strength of our tourism businesses in both Australia and New Zealand.”

“With 38% of THL’s assets and revenue generated in Australia, the Board has moved to strengthen representation in that market by appointing Graeme Bowker as a Director who is a retired managing partner of Deloitte Touche Tohmatsu in Victoria and previously New Zealand. He is currently Chairman of Melbourne Water Corporation. Mr Bowker’s appointment means THL will now have two directors based in Australia,” Mr Smith said.

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