Tourism Holdings shares tumble

By Paul McBeth

Wednesday 18th February 2009

Shares of Tourism Holdings, New Zealand's largest tourism operator, tumbled after the company posted a first-half loss and suspended its dividend payment.

The net loss was $265,000 in the six months ended December 31, from a profit of $4.9 million a year earlier, the company said in a statement. Sales fell 7% to $80 million.

The operator of campervans and tourist venues has been hit by the global recession, which has reduced tourist demand, while the company has incurred ongoing losses from its CI Munro vehicle production business. Tourist operators are hoping the New Zealand dollar weakens faster than the global slump erodes demand for travel in an industry that makes up about 10% of the economy.

"The New Zealand business faces a more difficult situation, with a strong reliance on the United Kingdom and German markets, in which consumer confidence is falling," the company said. "New Zealand poses more challenges for THL than Australia, where the size and opportunity of the domestic market carries greater potential for reward from flexibility and adaptation on THL's part."

The shares fell 9.2% to 59 cents, bringing its 12 month slide to about 65%. The company predicted a small full-year profit, including gains from the sale of discontinued businesses.

Ci Munro had an operating loss of $3.7 million in the first half.

The company omitted its first-half dividend after paying 5 cents a share in the year-earlier period.

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