Southern Travel suffers as swine flu deters Japanese

Southern Travel Holdings posted a net loss of $491,000 for the year to June 30, saying it was hit harder than expected by the effects of swine flu on its Japanese market.

In financial statements which are still being audited, it said yesterday its revenue of $24.7 million was down 17 per cent on the previous year and net profit fell 179 per cent.

Chairman Rodney Walshe said Southern Travel had suffered more than 1700 cancellations to date, 850 in May and June, the last two months of the financial year. The company believed "there will be little growth to New Zealand and Australia, other than transtasman, in the coming year".

Walshe added: "To thrive in the future we must survive the present and this we intend to achieve through sound management, careful planning and strategic marketing."

The company's net tangible assets have slumped from 26c a share to 18c.

New Zealand was the first country outside Mexico and the United States to report the swine flu pandemic.

Compared with 2008, the company's inflow from Japan fell 67 per cent in June, and 42 per cent in May, as the number of Japanese arrivals dropped by 23 per cent for the June year.

Calling the overall group result disappointing, Walshe said normalised earnings were $496,000 before interest, tax, depreciation and amortisation, which, was cut to a $292,000 loss after depreciation and restructuring costs in Japan.

Directors have written off the full goodwill value relating to Experience New Zealand of $238,000.

- NZPA