Tour firm thankful for Pickup

By Karyn Scherer

Seen any good penguins lately? Chances are, if you've been in Auckland over the past two weeks with school-aged children, you've paid a visit to Kelly Tarlton's. And Dennis Pickup thanks you very much.

The head of New Zealand's biggest tourism company, Tourism Holdings, Mr Pickup is happy to confirm the aquatic landmark is no longer up for sale. Visitor numbers have increased markedly over the past year.

"Fish and penguins are definitely in vogue," he grins.

Kelly Tarlton's is not the only tourism business owned by Tourism Holdings that is thriving at the moment. Its Maui camper van and rental car business is also enjoying double-digit growth, thanks to a surge in the number of Australians, Americans and Britons visiting our shores.

The growth coincides with a major restructuring programme at Tourism Holdings, but Mr Pickup is the first to concede the main reason for the apparent turnaround at the company is the revival in the number of tourists visiting New Zealand, after a dismal 1998.

Nevertheless, he is also delighted at progress so far. So, it seems, are shareholders. The company, formerly known as the Helicopter Line, was in dire straits when the former head of Freightways, Auckland Healthcare, and Lion Nathan's retail group took over as chief executive in November.

Its share price was drifting around the 70c mark, after a spectacular but haphazard period of rapid expansion in the early 1990s. Mr Pickup's brief was to slim down a company that included 61 different enterprises - 26 of which were joint ventures - with a focus on improving the return to its shareholders.

The disposal programme, nicknamed Genesis, is expected to be largely completed by December, but is already proving a hit with investors. Since September, Tourism Holdings' share price has nearly quadrupled to $2.60.

A key strategy has been getting out of its wholesale business, Newmans Holidays. The American arm has been sold and the sale of its Australian arm is expected to be completed soon. It has also shed numerous small businesses, including its interest in Milford Track tours and Mt Cook Hotels.

Other assets remaining under review include its coaching businesses in South Africa and Fiji. It has also put its Treble Cone skifield in Wanaka on the block, but is not expecting to complete a sale in a hurry, given that several skifields in Australasia are also on the market.

From now on, Mr Pickup explains, its main focus will be on the Maui business, along with Kelly Tarlton's, Waitomo Caves tours, Great Sights tours, and Milford Sound tours. It also continues to own around 40 aircraft, including ski planes and helicopters, and has decided to keep CI Munro, the company that makes its Maui vans.

The problem, Mr Pickup believes, was that the company was trying to be everything to everyone.

"From now on, every decision must be on increasing shareholder value. Hence, we are very appreciative of the share price going up 380 per cent in the last eight months."

Together with former Fletcher Challenge executive Ian Lewington, he has also overseen a sharpening of its corporate governance. Its head office has moved from Dunedin to Auckland, and strict financial controls have been put in place. Mr Lewington has also worked hard to educate analysts about the company. Previously, few analysts bothered with the company, but there are now 10 taking an interest. As a result, its shareholder numbers have doubled, and more than 40 per cent of its shares are owned by institutions.

Largely as a result of the disposal programme, the company has reduced its debt from $85 million to $50 million, and its ratio of equity to assets has improved from 44 to 55 per cent. It is once again talking about expansion, and both Mr Pickup and Mr Lewington are closely eyeing potential opportunities in Australia. He does not plan to rush into any investments.

That, Mr Pickup agrees, is a lesson that has definitely been learned.