KEY POINTS:
Continued growth in the Australian campervan and car rental business has helped Tourism Holdings post a 3.7 per cent increase in half year net profit.
Net profit after tax for the six months ended December 31 was $4.9 million, up from $4.73 million.
But the company's directors believe the outlook for 2008 will be challenging, with the decline in global equity and debt markets likely to put the screws on long distance travel. The half-year results were achieved on an 11.5 per cent increase in revenue from ordinary activities, which rose to $82.2 million. A fully imputed interim dividend of 5c a share was declared, the same as a year ago.
The company attributed the result to continued growth in the Australian Rentals business led by a range of new products, and a rebuilding of the tourist car business in New Zealand.
Chief executive Trevor Hall said demand in January and February had remained strong. "Today we don't have a rental vehicle - they're all on the road."
The company was nevertheless expecting a quiet trading period into winter, with the situation exacerbated by the high dollar reducing tourists' purchasing power.
The strength of the euro in relation to the US dollar was also making the US an attractively priced destination. Fuel surcharges from Europe to New Zealand, in some cases, were the same value as a short-haul package holiday.
Those factors were likely to keep the company's trading net profit after tax for the full year in the range of $16 to $18 million, which was similar to last year.
"But one of the things about our business is that we're at the end of a very long buying chain. If the airlines see markets softening then the prices change and the specials hit the markets in the northern hemisphere and the east coast of Australia. That can switch on demand almost overnight."
A failed takeover offer from Australia's MFS Living and Leisure Group last year halted strategic plans to sell some of its assets, but that has since progressed with the sale of two-thirds of the Johnston's Coachlines to a joint venture, and a joint venture with Intercity Group which sees Tourism Holdings retain 49 per cent shareholding.
Hall said there was interest in some of its other assets.
Tourism Holdings runs the Maui and Britz campervan and car rental businesses in New Zealand and Australia, and several other tourism businesses including Kelly Tarltons and the Waitomo glowworm caves.
First NZ Capital analyst Jason Familton said the announcement was in line with market expectations. The company's outlook depended on whether New Zealand tourism would rebound in the near future, which was reasonably unlikely given what most were saying about global GDP growth and the strong kiwi.
Shares dropped 9c to close at $1.85.
