Shotover Jet seeks new investment opportunities

By Graeme Kennedy

Friday 21st September 2001

TIGHTER COSTS: New chief executive Adrian Januszkiewicz says focus is now on consolidation

New chief executive seeks leaner, more efficient operation as strategic plan is formulated after huge profit year

Tourism attractions company Shotover Jet has begun a period of consolidation with a new chief executive following a 450% profit lift after several years of disappointing results.

The group has ordered new boats for its Dart and Shotover rivers operations and is looking for new investment opportunities as it strengthens its activities in the Queenstown area, Rotorua and Fiji.

Chief executive Adrian Januszkiewicz said Shotover's result, over-shadowed by an accident which injured 11 tourists and grounded its jet-boats during a two-day safety investigation, was the first step toward an even better long-term performance.

Its operating profit of $2.177 million compared with $484,000 last year. Revenues were up 13% and total customers up 12% to around 480,000. Mr Januszkiewicz said the company, 80.5%-owned by Ngai Tahu Tourism, would pay no dividend but re-invest the surplus to strengthen operations.

"Our focus now is consolidation," he said. "We will work toward tighter cost controls and better utilisation of capital and labour to become a leaner, more efficient organisation.

"We are working our way through a strategic marketing plan and looking at the segments we want to serve to get a clearer focus on our customers and we are looking at the culture around the organisation - which is now incredibly positive, can-do, vibrant and passionate - to increase performance management."

"Once we ensure Shotover is producing better value for its shareholders, we will look for further investment opportunities and we are doing some strategy work now to see what the company might consider in the future.

"There might be acquisitions or start-ups but it's too early to say. We are in the tourism-attraction business but that does not rule anything else out - our focus now is earning the right to grow."

Mr Januszkiewicz, who replaces managing director of 15 years Jim Boult, came to Shotover after seven years with Carter Holt Harvey where he held a number of senior positions including carton and packaging division general manager.

Brother of prominent Auckland plastic surgeon Janek Januszkiewicz, he had previously practised law in London and with Hesketh Henry in Auckland where he specialised in employment.

"I was happy at Carter Holt Harvey but felt it was a good time to put my head up and see what else the world had to offer," he said. "I was approached by the Shotover board and felt that tourism, as a growth industry, was a good place to be long-term - and Shotover is a good company with a strong profile."

The company's downturn in recent years has been blamed on its growing too quickly, leaving it without the cash flows to support the expansion which included jet-boat operations outside its core Queenstown base and Rotorua's Rainbow Springs. A fatal accident in 1999 tarnished Shotover's image and safety record.

However, with the planned consolidation following this year's good result, Mr Januszkiewicz is confident Shotover's future is assured.

The company gained long-term security during the year with the Queenstown Lakes District Council renewing its exclusive concession to operate jet-boats in the Shotover River canyons for a further 25 years - comprising a five-year period from April 1, 2004 followed by four five-year rights of renewal.

Meanwhile, the company has developed and is testing the first of a fleet of new boats for the Shotover, able to operate in both high and low water. They will be twin rather than single-engined vessels to overcome potential safety problems which can follow power loss.

The prototype will be further tested and the fleet built locally in time for the 2002-2003 peak summer season.

Two new boats for Shotover's Dart River Safaris operations are in final testing and are expected to be carrying passengers by early December to provide more capacity, comfort and safety.

The company has had to turn customers away in the peak periods and the bigger boats are designed to increase summer revenues.

Shotover Jet Fiji was again operating seven days a week after reducing to two following the George Speight coup last year and steady growth was forecast as tourist numbers increased, Mr Januszkiewicz said.

He said the group had for the first time adopted triple bottom-line reporting to include good environmental management and social equity as well as strong financial performance.

"This year's annual report shows details of our initiatives to protect and enhance the environment in which we operate and demonstrates our commitment to staff, customers and the communities in which we do business," he said.

Shotover's environmental activities include reducing jet-boat noise, Goldfields Jet's preservation of Central Otago gold-rush history by restoring Chinese miners' huts and participation in the Conservation Department's programme to breed and release kiwis into the wild.

Mr Januszkiewicz said the company paid the local council more than $300,000 in concession fees used for community projects and $380,000 to the Conservation Department for the preservation of the region's natural beauty.

"The outlook for tourism is positive and Shotover will seek to maximise shareholder returns and to enhance the group's contribution in social and environmental areas."

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