KEY POINTS:
Tourism Holdings has reduced its trading profit guidance, while reporting the sale of its Milford Sound and coach assets for $26 million and one-off gains of about $9 million.
The company said today that since March, trading conditions across most businesses had worsened due to reduced international arrivals and lower than expected winter booking levels.
That meant that trading profit - excluding its caravan and motorhome builder CI Munro - was anticipated to be in the range of $15m to $16m after tax for the year to the end of June. That was down on the $16m to $18m previously forecast to the market.
CI Munro has completed its relocation to Hamilton and began building a new generation of motorhomes during the financial year, THL said.
That relocation and changes to modern fibreglass technology were more difficult than anticipated and created ongoing manufacturing delays.
CI Munro also experienced unusual third party supplier failure which slowed production for a period of time. Consequently CI Munro would record a loss of $3.8m after tax.
The gains from asset sales less the CI Munro result, other non-recurring costs and the lower winter trading would lead to the full year net profit result being similar to last year at $13m to $14m.
THL announced today it had agreed to sell its Milford assets to Dunedin-based Skeggs Group for $17.3m.
Those assets included Milford Sound Red Boats, Milford Deep Underwater Observatory, the Blue Duck Cafe and a 49 per cent shareholding in the Milford Sound Development Authority.
THL chief executive Trevor Hall said the sale was part of the group's programme to focus on its core businesses.
Skeggs Group is a private family-owned company, with business interests in seafoods, shipping, tourism, property and wine. It has an annual turnover above $100m and employs more than 500 people.
In a separate deal, Tourism Holdings Ltd (THL) said it had sold its Auckland Airbus business to Johnston's Coachlines (JCL), and its remaining 33 per cent shareholding in JCL to its JCL partner Coach Investments.
JCL was also close to finalising the purchase of THL's Kiwi Experience coach fleet. The fleet would be leased back by THL.
Those transactions, when complete, would generate revenue of $9m and a gain of $4.5m.
Hall said it was thought that JCL and Airbus were best suited to being under one ownership to "maximise synergies" between the businesses.
The transactions signalled the end of THL's direct interest in coaching operations.
The Milford and coaching asset sales would generate combined proceeds of $26m and one-off gains of about $9m. Around half of the gain would be in this financial year, THL said.
Both transactions were subject to certain commercial conditions being met and sales proceeds would be used by THL to reduce debt.
The transactions would "bring to an end THL's extensive period of change", the company said.
It would now concentrate on its New Zealand and Australian rental businesses, growing iin the low cost and youth market, redevelopment of its Waitomo Visitor Centre and the 49 per cent shareholding in the InterCity Group joint venture.
The remainder of 2008 and summer 2009 remained difficult to forecast due to the current global environment, however THL's balance sheet and low debt positioned it well for market consolidation and opportunities.
THL shares closed at $1.68 yesterday, having ranged between $2.76 and $1.60 in the past year.
- NZPA
