Tourism Holdings sees challenges

By Jane Shanahan

Wednesday 20th August 2008

Tourism Holdings, New Zealand�s biggest campervan company, predicts challenging times for the industry over the next 18 months, which may lead to a shakeout in the number of operators.

The company today posted a 7% gain in annual profit, reflecting sales of non-core assets. Trading profit from continuing businesses fell 11% to NZ$13.3 million, it said in a statement today.

�In the short term, intense pricing pressure is likely in New Zealand as the market competes aggressively for a more price-sensitive clientele,� chairman Keith Smith said. �We foresee a reduction in the number of tourism operators and in fleet sizes as the rental sector continues to tighten.�

Tourism Holdings has sold businesses including buses, the Kelly Tarlton centre in Auckland and operations in Milford Sound to concentrate on campervans and car rentals. A high kiwi dollar has trimmed demand from tourists in Asia.

The number of short-term visitors to New Zealand fell 2% in June from a year earlier to 142,400, according to government figures.

Motorhome maker CI Munro had a $3.3 million loss last year after production was disrupted by the relocation of its plant to Hamilton from Otorohanga.

Earnings for Tourism Holdings� rental division, excluding CI Munro, were unchanged from a year earlier while rentals rose Australia and Europe had good growth.

Rental forward bookings are 9% down on the same period last year.

The company will pay a final dividend of six cents a share, bringing total dividend for the year to 11 cents a share, unchanged from 2007.

Shares of the company fell 0.7% to NZ$1.41 and have declined 36% in the past 12 months.

www.businesswire.co.nz

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