New Zealand Experience, which owns the Rainbow's End amusement park, plans to spend $3.5 million upgrading its 'Castle Land' area, which is expected to boost earnings when it reopens next Easter.

The development is expected to lift medium-term profitability, the Auckland-based company said in a statement. It affirmed annual profit guidance of between $1.2 million and $1.4 million, even though it flagged short-term earnings may be hit during the construction phase.

"The expected growth in revenues and the reduction in our exposure to unfavourable weather for this targeted business, together provide opportunity for improved profitability at Rainbow's End," the company said.

NZ Experience cut its forecast annual earnings of between $1.4 million and $1.6 million after first-half trading was hit by competition from the Rugby World Cup and unfavourable weather.


The company also said it has agreed to a new $5.1 million banking facility with Bank of New Zealand.

The shares, the bulk of which are held by Canada's Garlow Management, the trustee for the Estate of George Ryerson Gardiner, last traded at 40 cents apiece, valuing the company at $14.8 million.