Tourism Holdings sweetens dividend

By SIMON HENDERY tourism writer

The global outlook for tourism and its own company accounts are both on the up and up so Tourism Holdings has taken the bold move of paying a special dividend and making a positive full-year forecast.

The country's largest tourism business yesterday reported a drop in half-year profits for the six months to December 31, but said it expected its full-year earnings to be up.

"It's four years since we didn't have to get up and give a litany of reasons why the financial performance has been inhibited by world events," managing director Dennis Pickup said yesterday.

The bad news began in 2000 when the Sydney Olympics discouraged tourists from travelling to Australasia, it continued with the fallout of September 11 and other terrorist alerts in 2001 and 2002, and carried on with the Iraq war and the Sars virus last year.

But the international tourism market had become more stable.

"We're looking at the moment reasonably positive for not only the second half [of the current financial year] but also the ensuing year," Pickup said.

Tourism Holdings' net profit of $4.2 million for the past half year was down on the $5.2 million it reported for the same period a year earlier.

But the company said after excluding $1.4 million of net profit booked last year from the sale of businesses, unusual items, and trading from discontinued businesses, this year's comparative profit was 10.5 per cent up on the previous year.

Sales revenue was down 9 per cent from $88.8 million to $81.2 million. The main factor in the fall in revenue was the sale last year of the company's ski and aviation businesses.

Pickup said exiting those operations made Tourism Holdings less exposed to cyclical extremes.

Revenue from the company's Australian rental operations was also down, as that country's tourism industry took longer to recover from Sars and the Iraq war than New Zealand's.

Barring the unforseen the company expects to report a full-year net profit of $10 million later this year, up from $8.7 million last year.

The improved profit, favourable trading outlook and solid cashflows have prompted the company to return cash to shareholders through a special dividend - a move it had been contemplating for some time but shied away from last year because of global uncertainty for the industry.

The company will pay a special 4c a share dividend in addition to the interim dividend of 4c a share, unchanged from last year.

The combined 8c fully imputed dividend will be paid on April 23 to shareholders who are on company's register on April 16.

Tourism Holdings runs the Maui and Britz campervan and car rental businesses in New Zealand and Australia, the Kiwi Experience and Oz Experience backpacker bus networks, and several other New Zealand tourism businesses.