NZ Experience FY profit falls 3.6% on park upgrade
By Hannah Lynch
Aug. 22 (BusinessDesk) - New Zealand Experience, which owns Auckland's Rainbow’s End amusement park, posted a 3.6 percent fall in full-year profit after a one-time charge to upgrade its facilities offset stronger sales.
Profit was $1.4 million, or 3.88 cents per share, in the 12 months ended June 30, down from $1.5 million, or 4.02 cents, a year earlier, the company said in a statement. Sales rose about 10 percent to $11.6 million. The company took a one-time charge of $267,000 on the cost of building new facilities at Rainbow's End.
The integration of two new food park and beverage offerings expanded revenue beyond general admission to Rainbow's End, while corporate and group function activity at the park was significantly stronger, the company said.
"Our success in food and beverages and recent investment in a new merchandise outlet now have a focus on improving spend per visitor levels through enhanced and expanded offerings," director David Lock said. "Product development will take place during the year ahead as we look to set a strategy for these two areas within out longer term development of Rainbow's end operations."
Earlier this month major shareholder Garlow Management, the trustee for the estate of Canadian George Ryerson Gardiner, said it would make its second attempt to exit the investment. Garlow, which holds 74.9 percent of the company on behalf of the estate, unsuccessfully tried to sell its holding in 2010.
In April, NZ Experience announced plans to spend $3.7 million upgrading its ‘Kidz Kingdom' area, which is expected to boost earnings when it reopens next Easter.
"Alongside 'Kidz Kingdom' we continue to evaluate a number of opportunities for the development of the main park area of Rainbow's End," Lock said. "Together with plans for the substantial re-devolvement of our main entrance we are actively considering a range of opportunities for new attraction to be added for a wider age group in the 2014 financial year."
NZ Experience expects better earnings in 2013, with net profit forecast to be between $1.4 million and $1.6 million.
The shares were unchanged at 38 cents in trading today and have shed about 5 percent this year. The board will pay a dividend of 2.9 cents per share on Oct. 5.