Travel services company expects loss after natural disasters

Wednesday 29th June 2011

Travel and tourism services company Southern Travel Holdings is expecting an after tax operating loss of around $600,000 for the year to June.

The target for the year had been to bring the group back to break even, following a $946,000 loss reported for the June 2010 year, the company said today.

The group had been on target until the earthquakes in Christchurch and the quake and tsunami in Japan.

With reservations wiped and prospects diminished, an immediate restructure of the inbound division was carried out.

The cost of the restructure, along with the loss in revenue from cancellations, resulted in the expected loss, although key revenue information was still to come in before trading results could be determined.

An operating budget established for the financial year to June 2012 had set a target for a small profit, after tax but before foreign exchange variation, the company said.

Japan remained the most important source of inbound business for the group, although the loss of Christchurch as a destination had adversely affected Japanese arrivals to all New Zealand.

It was expected that next year the group's arrival numbers to Australia would be significantly greater than to this country, Southern Travel said.

Its market share in Australia was growing, with the level of forward bookings held in Australia for the 2012 financial year providing a strong platform for the year ahead.

NZPA

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