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Tourism Holdings Profit In Line With Forecast

MEDIA RELEASE

Tourism Holdings Profit In Line With Forecast


Tourism Holdings Limited (THL) today reported an audited net profit after tax (NPAT) of $10.6m for the financial year ended 30 June 2005 which compares to last year’s profit of $11.2m. Excluding the discontinued business of Oz Experience sold in April 2005 the NPAT for continuing businesses increased from $12.6m to $13.1m. This is consistent with the forecasted range of $12.5m to $13.5m announced in February 2005.

Whilst international tourism into New Zealand is still growing it is showing signs of weakening principally due to the high NZ currency with price conscious tourists attracted to other destinations. This has particularly been felt in the Backpacker, Japanese and Asia markets. New Zealand’s high summer season also suffered from poor weather in December / January which discouraged late booking tourists.

THL’s Australian Rentals business increased profitability by 71% showing the benefits of major restructuring with recovery of market share and an upturn of international tourists into Australia. Fiji, where THL, has a small but growing investment is enjoying tourist growth of over 20% p.a..

THL’s profit was achieved on a turnover of $172m, which excluding discontinued businesses was up 6% on last year including Fullers BOI. Earnings before Interest, Tax and Amortisation (EBITA) was $29.5m compared to $26.8m last year, an increase of 10%. For continuing businesses EBITA increased 15% from $28.4m last year to $32.6m in the current year. However this year includes the EBITA contribution of $2.8m from Fullers BOI acquired in December 2004. Excluding Fullers BOI continuing businesses profit increased $1.4m or 5%.

Based on the 2005 results and current trading outlook, the Directors have declared a fully imputed dividend of 6 cents per share ( 2004 - 5cps) payable on the 21st October 2005 to shareholders on record on the 14th October 2005.

During the year THL acquired three strategic businesses. Fullers Bay of Islands in December 2004, the rental fleets and forward bookings of Hertz Australia in August 2004 and Cruise NZ in September 2004. These businesses have now been successfully integrated into our Attractions and Rentals divisions.

THL generated strong operating cash flows of $41m. There was an increase in capital expenditure with the Fullers BOI acquisition of $21m, Cruise NZ fleet of $5m, new developments of Waitomo’s Ruakuri Caves, Kelly Tarlton’s Stingray Bay and the usual plant replacement expenditure and dividend payments. This increased net debt from $52m to $83m.

The tourism outlook for the South Pacific region in which THL operates remains sound. Whilst terrorism threats continue with unrest in the Middle East, Iraq and Indonesia, international tourism continues to grow. This is driven by the strength of the key economies and the increasing number of airline competitors and capacity which is keeping international travel competitively priced.

Whilst there are concerns over the high currency the long term outlook for tourism remains very positive. THL benefits from a wide spread of businesses, a conservative and strong Balance Sheet, good cash flows and extremely competent management and staff.


Announcement authorised by:
Keith Smith
Chairman
Tourism Holdings Limited
9th August 2005

ENDS

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