Travel firm to float

Tourism company Southern Travel Holdings is looking to raise almost $6 million via a listing on the NZAX.

Four and a half million shares at $1.30 each are being offered - made up of 2.5 million new shares and 2 million sold down by company founder Kiyomi Gunji.

This, along with shares retained by Gunji and his wife, will give the company a market capitalisation of just over $17 million when it lists on October 1.

New investors will hold 34.3 per cent of the 13,120,000 shares on issue.

The company, which opened the offer this week, will use the money raised to grow its Australasian business and expand further overseas.

It will also repay $1.7 million to the founding shareholders.

Southern Travel is a New Zealand and Australian inbound tour operator which organises customised tours for visitors - mainly Japanese tourists.

The company sells its tours through more than 100 travel wholesalers in Japan.

Three-quarters of its revenue comes from New Zealand with the balance originating in Australia.

It will be the only New Zealand- listed company that specialises solely in inbound tourism.

Southern Travel's net profit after tax for the year to June 30 was $1.83 million.

The profit for this year is forecast at $991,000 in the prospectus, increasing to $1.84 million in the 2005 financial year.

Earnings per share were 14c in the year to June 30 and are seen dipping to 8c this year before rebounding to 14c again next year.

The share offer - organised by Bancorp and McDouall Stuart - closes on September 28 and the company's present executives will retain their roles.

A fully imputed dividend of 65 per cent of annual net profit after tax is expected to be paid in March next year.