THL Trading Profit Supports Special Dividend

Tuesday, February 24, 2004
MEDIA RELEASE

Tourism Holdings Trading Profit
Supports Special Dividend Payment

Tourism Holdings Limited (THL) today reported an unaudited Net Profit After Tax (NPAT) of $4.2m for the six months ended 31 December 2003. This compares to $5.2m for the same period last year. But after excluding the NPAT of $1.4m recorded last year on the sale of businesses, unusual items and trading from discontinued businesses the Net Profit After Tax is 10.5% up on the previous year on a like for like basis.

FORECAST

Based on current trends and there being no significant adverse world events, the Directors forecast a NPAT of $10m for the full year which compares with a reported NPAT of $8.7m the previous year.

The second six months trading NPAT of $5.8m is anticipated to be 93% ahead of last year’s $3m NPAT.

SPECIAL DIVIDEND

With the improved profit, favourable trading outlook and solid cash flows, the Directors have resolved to pay a special one-off dividend of 4 cents per share in addition to the interim dividend of 4 cents per share. The combined dividend of 8 cents per share will be fully imputed and will be paid on the 23rd April 2004 to shareholders on record at 16 April 2004.

TRADING ENVIRONMENT

Keith Smith, Chairman, stated that the international tourism market is now more stable than experienced over the past three years. The uncertainties created by September 11, Iraq War and the Sars virus have abated. Whilst world events will always impact international travel, the current outlook for the South Pacific in which THL operates and New Zealand in particular is more positive.

During the period under review the New Zealand tourism market was slow to start, following the Iraq War and Sars virus. Compounding this was the poor start to the South Island ski season and a slower than expected recovery from Japan and Asia to these world events. However the summer high season for New Zealand during November/December has gone extremely well.

Australia had a disappointing six months with low volumes continuing. The overhang of Iraq/Sars and a weak German economy impacted our Australian businesses. Australia is starting to turn around with forward bookings above last year, however the businesses are operating in soft markets.

Fiji, where THL has a relatively small but strategic investment, is enjoying a major recovery through increased air capacity driving competitive pricing of packages to Fiji.

SMALL SHAREHOLDERS PLAN

Directors have provided a cost effective plan for small shareholders to either increase their shareholdings to 1,000 shares or alternatively dispose of their holding. There are a number of shareholders (19%) who hold less than 1,000 shares, representing in total 1% of the share capital. The administrative costs to THL of maintaining small shareholders is high. By THL meeting the brokerage costs this will enable shareholders to preferably acquire, or alternatively dispose of shares in an economic manner.

FINANCIAL POSITION

Mr Smith said that THL has continued to focus on maintaining a strong Balance Sheet. Whilst interest bearing debt increased over the year by 13% to $64m this reflected an increased motorhome fleet build for the high season, reduced fleet disposals and the expenditure on acquisitions of Black Water Rafting and Ruakuri Caves concession. The Debt to Debt Plus Equity Ratio is very healthy at 31% (last year 30%) whilst the Equity Ratio is 59% compared to 58% last December.

OUTLOOK

Mr Smith indicated that the immediate outlook for THL’s markets is more certain and favourable than previous years. Whilst THL is still trading through the New Zealand high summer season (November to Easter) there has been no world event adversely influencing tourism. New Zealand is experiencing its best summer season in the past four years and our New Zealand operations are benefitting accordingly.

Australia appears to be recovering after four disappointing years, impacted more severely than New Zealand by world events.

The relatively high NZ/AU exchange rates have as yet had no apparent direct impact on tourism flows. The major appreciation has been against the US dollar and not the Euro, UK or Japanese currencies.

THL businesses in New Zealand, Australia and Fiji are well positioned to capitalise on South Pacific regions growth in tourism, particularly in the Independent Traveller market.

ENDS

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