Tourism Holdings has defended taking a Government grant for its Waitomo business after reporting its underlying net profit had tumbled 28 per cent to $20 million.
The company has cut its net debt to $75m, as of August 31, from $188m on March 31, by selling camper vans, especially in the United States, and drastically cutting spending.
Tourism Holdings' Discover Waitomo business received a $2m taxpayer grant as part of a controversial strategic tourism asset programme, which chief executive Grant Webster defended as a way to keep an iconic business going and retaining 40 jobs.
"We are losing money in Waitomo and continue to lose money in Waitomo regardless of the Stapp (Strategic Tourism Assets Protection Programme) funding. It's not about us getting any windfall; we are continuing to lose money there - hundreds of thousands a month," he said.
''It has gone to paying people and keeping them in jobs and keeping businesses going - we haven't feathered our own pockets.''
The protection programme was part of a $400m tourism package announced in the Budget in May and has attracted criticism from smaller tourism businesses which missed out.
Webster said he didn't see why a listed company should come in for more criticism than any other business.
"We've got no dividends and our share price has dropped 50 per cent so I think you could argue that our shareholders in the publicly listed environment have suffered - they've had no dividends and reduced capital value."
He said as a condition of the grant, the company would miss out on a reduction of up to $400,000 in Department of Conservation concession fees and wage subsidy extensions.
In the year to June 30, Thl received $5.3m of wage subsidies in New Zealand and Australia.
Staff numbers across the group had fallen 35 per cent to around 1000, including 600 in New Zealand.
Webster said the second part of the asset protection programme - a loan of up to $2m - was unlikely to be taken up because of Thl's access to its own debt facilities.
During the past year it had concluded new funding arrangements with banks which determined that the company did not have to raise additional equity.
While Webster said a transtasman travel bubble offered some hope of an earlier border relaxation, the company expects to have a domestic focus in its main New Zealand, Australia and United States markets until the end of next year.
In what it calls a year of two parts, Thl's underlying net profit was $25.5m in the first eight months of the financial year but then collapsed to a $5.5m loss in the four months from March to June.
Revenue was running ahead of the previous year for the first eight months but then tumbled, leading to an overall 5 per cent dip to $401m.
The company is mainly a van rental business and without the international market, says it has approximately 35 per cent to 45 per cent excess fleet capacity on a global basis, based on its fleet size at the start of the financial year.
Vehicle sales revenue for the last three months of the year jumped 35 per cent to $53.4m while rental and services revenue plunged 56 per cent to $43.2m.
Although sales are running ahead of last year in the US, they were slower here during the past year.
Webster said lockdowns in this country had slowed sales but these had now picked up.
International tourists made up 90 per cent of van renters in New Zealand and while the domestic market had filled some of the gap, bookings were lumpy.
Around a third of all bookings were made within two weeks of travel and there was a clear correlation with Covid alert levels.
"During the level 3 lockdown in Auckland we saw bookings really drop off but we saw Christchurch and the South Island really tick along."
Thl had run some cheap deals and would look to do the same early next year, targeting empty nesters.
"February is the month that is the biggest profit month for the New Zealand tourism industry and that's the one that is the real worry because there are no school holidays."
The Kiwi Experience business, which relies on international tourists, was placed in hibernation in March and has incurred a $3.1m writedown of goodwill.