Shotover Jet improves margins

For the six months to the end of December the company says net profit rose 52% over the previous year to $882,000.

Although operating revenue fell 2.7% to $11.9 million the company says it was up by 4% on a 'like-by-like' basis after removing the contribution from Christchurch Tramway, which was sold during the second six months of the last financial year.

"The effect of pricing increases along with a strong focus on cost management resulted in improved margins and this has flowed through to a solid profit result."

A decision to defer spending $1.1 million on its jet boat replacement programme also helped the interim cash situation, which is $1.9 million ahead of the previous half-year's position.

Like other tourist operators Shotover Jet has been hit by the decline in visitor numbers since September 11 but it says the impact is being felt more from cancellations of group tours than a decline in the numbers of independent travellers.

The company expects the decline will also affect second half results but believes it will be neutralised to some extent by its strong cost control programme.

In Fiji the company's jetboating operation is finally offering some hope after being beset by coup-induced visitor downturns and is expected to move into profit this year.

At the annual meeting last October chief executive, Adrian Januszkiewicz, introduced a 'back-to-basics' focus, aimed at maximising returns from existing assets.

"This approach is having a positive effect on overall business performance and the work will continue throughout the balance of the year to ensure optimal profit from all operations," the company says.

"Most of the company's business units introduced price increases into the market in October 2001. This has resulted in improved yield.

"In terms of medium to long term planning, all business units have undertaken a significant review of operations from a strategic marketing perspective. They are currently finalising three-year strategic plans, which will drive the company's future organic business growth."

SJL says while the precise impact of visitor forecasts is difficult to predict for the second half of the year it expects to deliver a solid full year result.

Due to the need to fund the jet boat replacement programme and other strategic capital expenditure, the company is not paying an interim dividend.

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