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Tourism Holdings Profit Above Expectations

Tourism Holdings Profit Above Expectations

Acquires Waitomo’s Blackwater Rafting And Ruakuri Caves

Tourism Holdings Limited (THL) today reported an audited profit after tax (NPAT) OF $8.7m for the financial year ended 30 June 2003. This compares to last years’ profit of $0.3m.

This year’s result includes positive unusual items of $0.5m and prior years’ tax adjustments of $1.0m. Excluding these one off items, the trading tax paid profit of $7.2m is an increase of $2.7m or 60% over the comparable profit of $4.5m.

The net profit after tax of $8.7m is favourable to the Directors’ previous announcement of $7.5m. As indicated at that time that announcement was conditional upon tax finalisation and audit review which subsequently resulted in a further $0.8m favourable result due to review of the 2002 Australian tax provisions. Other year end adjustments accounted for the balance.

The year’s trading profit of $7.2m means that the second half of the year achieved an NAPT of $3m which was $1.5m ahead of the same period last year.

The last six months were seriously affected by the lower number of international tourists as a consequence of the negative impacts of the Iraq War and SARS. However as opposed to the previous year with the events of September and two days later the collapse of Ansett Airlines, the combined external international shocks of Iraq War and SARS occurred from late February to the end of the year. Thus THL enjoyed the benefits of the summer high season although it prematurely affected March and April which looked to be very good trading months.

The profit was achieved on a turnover of $165.4m which was 9% below last year due in part to the sale of businesses. Earnings before unusual items, interest, tax and amortisation was $24.6m or 33% above last year.

The company continued to generate strong operating cash flows which at $40.3m reflects the strong application of THL’s “Cash is King” programmes and the underlying financial strength of the company.

This strong cash flow enabled debt to be halved to $38m, the equity ratio increased from 54% to 66%, and the debt to debt plus equity ratio improved from 37% to 22%. (Both ratios excluding intangible assets).

As a result of the improved profit, strong Balance Sheet and continuing positive cash flows, the Directors have recommended a fully imputed dividend of 4 cents per share payable on the 17 October 2003. With the interim dividend of 4 cents per share paid in April the total dividend for the year is 8 cents per share compared to 3 cents last year.

The major contributor of the increased profit was the improved performance of the Australian Rentals business which increased Earnings Before Interest Tax and Amortisation (EBITA) from $2.5m to $6.7m. Directors are pleased with this financial turnaround and its future outlook for THL’s largest investment.

THL also announced the conditional purchase of The Legendary Blackwater Rafting Company which operates rafting trips on rubber tubes on subterranean rivers flowing through the Ruakuri Cave system at Waitomo. THL has also obtained a 30 year license to re-open the historic Ruakuri Caves for guided walking tours.

Both the Blackwater Rafting experience and guided walking tours of the Ruakuri Caves are a natural fit for THL and complementary to the company’s extremely successful involvement with the Waitomo Glowworm Caves which it has operated since 1995.

With the SARS crisis over, global economic growth returning, and with reduced terrorism and wars, traditional tourism patterns will return.

THL is in good shape, in a strong financial position, with management and staff to grow the business.

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