Profits on holiday in Olympics reaction

By SIMON HENDERY tourism writer

New Zealand's largest tourist operator, Tourism Holdings, made a $6.6 million profit during the second half of last year - $1 million less than for the same period in 1999.

Two weeks ago, the firm warned that its profit for the year to June 30 would be below forecast because of the disappointing performance of its Australian operations.

The company's investments include the Maui and Britz campervan fleet in New Zealand and Australia, Kelly Tarlton's Underwater World in Auckland and the Waitomo glow-worm caves.

"Notwithstanding the considerable efforts undertaken by management, the Australian situation has only now started to firm," Tourism Holdings chairman Keith Smith said yesterday.

"The indications are that the disruption to normal visitor flows caused by the Sydney Olympics, particularly to our key German market, has had a definite impact on this year's trading performance."

Despite the result, Tourism Holdings shares closed up 6c, or 4.4 per cent, at $1.43 yesterday.

One analyst, who asked not to be named, said the stock was up because the market had "factored in the worst" after the profit warning.

An earlier profit warning was issued in November, meaning Tourism Holdings had almost halved its forecast profit from $26.8 million in September to between $14 million and $16 million.

The analyst said the company was undervalued at its current price, but the market was waiting for it to deliver on its potential.

Restructuring over the past two years had correctly focused the company on the higher-return, less-cyclical, transport side of the tourism industry, the analyst said.

Tourism Holdings will pay a dividend of 4c a share on March 23, equal to its interim payout last year.