KEY POINTS:
A major loss in its motorhome manufacturing business has pushed Tourism Holdings into the red.
The tourism operator yesterday reported a $300,000 loss for the six months to December, compared with a $4.9 million profit in the same period in 2007.
Chief executive Grant Webster said
while there were some positives, the result was disappointing.
"No CEO, no executive and no board wants to have a result that is a decrease like this."
A factor in the result was its CI Munro motorhome manufacturing business, which made a loss of $3.2 million - down from a $100,000 profit in the previous year.
Webster said the negative result at CI Munro, which makes the Maui and Britz campervans, stemmed from ongoing problems after the business moved from Otorohanga to a new factory in Hamilton in 2007.
"There were some key complications in terms of moving everything to Hamilton. The move came at the same time as design changes."
That had resulted in some major supplier issues as well as staffing problems - the company was hit by industrial action.
But Webster said it had engaged Ernst & Young at the end of 2008 to undertake a full operational manufacturing review and was now in the process of implementing a number of changes.
Included in that would be a reduction in staff in which around 30 full-time positions would go, reducing the workforce to about 100 people.
Webster said he expected there to be an improvement in the business this quarter, although it would take time before it showed through on the balance sheet.
The global recession and its effect on visitor numbers had also hit the group's campervan rental business.
Earnings before interest and tax dropped from $11.6 million to $3.7 million in the half year to December and the company expected motorhome rental days to drop by 6 per cent in Australia and 10 per cent in New Zealand during the second half of its financial year.
Webster said strong competition and an over-supply of rentals had seen campervan pricing drop to unsustainable levels.
But the group's backpacker and Waitomo caves business remained strong in the face of the tough times.
The Kiwi Experience, Waitomo and Fiji operations had performed in line with the previous December half-year result and Webster expected the backpacker market to continue to hold up.
A small profit was predicted for the full year supplemented by the sale of several businesses.
The company will pay no interim dividend for the half year - the first time since 2002.
Tourism Holdings closed down 9c at 56c.
