KEY POINTS:
Tourism Holdings has downgraded its profit forecast for the year as the slowing economy and lower visitor numbers begin to bite.
The listed tourism operator had expected to make an after tax profit of between $16 and $18 million for the year to June 30 - in line
with its 2007 profits.
But yesterday it revised it to between $13 and $14 million.
The company's share price tumbled 21c to a 2 1/2 year low of $1.47.
Tourism Holdings chief executive Trevor Hall said the downgrade was directly attributable to New Zealand's economic downturn.
"The main driver is New Zealand. Australia has been going very well but New Zealand has had a decline."
Hall said the New Zealand rentals business, which includes the camper brands Maui and Britz, continued to battle against an oversupplied market, and since March trading conditions across most businesses had worsened due to reduced international arrivals and lower than anticipated levels of travel booked for the winter period.
"Oil has started to impact on the sector. We saw our bottom line starting to disappear in March, April and May."
Hall said the year ahead remained pretty difficult to forecast although the company was not concerned about its summer bookings at this stage.
The profit forecast includes a $3.8 million expected loss from its campervan manufacturing business, CI Munro, as well as gains from several asset sales expected to be finalised by the June 30 financial year end.
In the last financial year it moved its manufacturing facility from Otorohanga to Hamilton.
Hall said the Hamilton move had not gone as smoothly as expected after the business was hit by strike action and supply problems. "We weren't able to get the scale out the door in the last 12 months. But we are close now to getting that right."
The group also announced yesterday it had agreed to sell its Milford assets to privately owned Dunedin firm Skeggs Group for $17.3 million.
In a separate transaction Tourism Holdings said it had also sold its Auckland Airbus business to Johnston's Coachlines and a remaining 33 per cent shareholdings in Johnston's Coachlines to its partner Coach Investments.
Johnston's Coachlines was also in the process of buying its Kiwi Experience fleet which Tourism Holdings would then lease back.
The two transactions are expected to net the business $26 million in asset sales and $9 million in one-off gains and follow the sale of its Auckland Kelly Tarlton's business in March to Village Roadshow in a deal worth $13 million.
Hall said the company was not actively marketing any other parts of its business as for sale.
First NZ Capital analyst Jason Familton said the profit downgrade had not come as a surprise. However, he said, the magnitude of the losses made by the CI Munro business had been a shock.
SOLD
Tourism Holdings 2008 asset sales:
* Auckland Airbus.
* 33 per cent stake in Johnston's Coachlines.
* Kiwi Experience coach fleet.
* Milford assets including Milford Sound Red Boats, Milford Deep Underwater Observatory, the Blue Duck Cafe and a 49 per cent stake in the Milford Sound Development Authority.
* Kelly Tarlton's Underwater World.