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Tourism Investment Corporation Limited - Restructuring Positions Tourvest For Growth TOURISM INVESTMENT CORPORATION LIMITED (Incorporated in the Republic of South Africa) (Registration number 1996/008144/06) Share code: TRT ISIN: ZAE000012472 For further information call Tommy Edmond, CEO, on 011 339 6044 RESTRUCTURING POSITIONS TOURVEST FOR GROWTH Johannesburg, 18 August 2005 - The virtual completion of its restructuring process has equipped Tourvest to achieve real earnings growth in 2006 even in a strong rand environment and it is now also poised to expand organically and through acquisition, the company said today. Announcing its results for the year to 25 June 2005, Tourvest said the further strengthening of the rand during this period had again impacted heavily on its inbound tourism operations. However, its outbound retail travel business delivered another good performance in spite of flat market conditions while the American Express foreign exchange business had a good year on the back of higher foreign currency sales and reduced cash losses. The retail merchandising division was also affected by the downturn in tourist spending. Chief executive Tommy Edmond said in this generally difficult trading environment, the group had done reasonably well to increase operating income by 1.8% to R150.6 million and headline earnings per share, adjusted for STC, by 2.3% to 11.82 cents. Revenue was up 2.5% at R1.1 billion. An ordinary dividend of 5.75 cents per share (2004: 3 cents) has been declared in line with the group`s policy of paying an annual dividend equal to 50% of earnings per share. `The past two years have been a time of inward focus for Tourvest as we reorganised our operations to align them with market changes. This process has included the consolidation of our retail travel business as well as our outbound and inbound tour operators into single, multi-branded businesses. It has now almost been completed and the benefits are already becoming evident,` Edmond said. `While Tourvest will always be a currency-impacted business, we are confident that the restructuring and refocusing has equipped the group to achieve real earnings growth, even at an exchange rate of R6 to the dollar. In addition, the group is now in a sound position from where it can look outside and ahead for future growth opportunities. Given the substantial market shares we hold in our existing businesses, Tourvest will have to seek this growth beyond its existing borders or in new market sectors, or both. Our businesses have some unique skills, which we believe are eminently exportable to other regions or applications.` Reviewing the past year, Edmond noted the following: Inbound Tourism Services: The full benefits of the consolidation of the division`s inbound tour operators will only be seen in future years but the operations` combined purchasing has already started to pay off and will have a positive effect on margins. The performance of both sub divisions were negatively affected by poor trading conditions. Outbound Travel Services: The retail travel business continued to perform well, producing growth of 20% after allocating the profit arising from the settlement of the supplier dispute to the 2004 financial year. The profitability of this business has not been affected by the introduction of a zero-commission dispensation by the airlines this year. The turnaround of the division`s outbound tour operators is still in progress but this business is already cash- positive and should return to profitability in 2006. Financial Services: Dollar sales increased by 9.8% and despite the rand`s strength, the division increased its profitability by 18.8%. Cash losses were significantly reduced. Retail Merchandising: The jewellery business incurred once-off restructuring costs of R6.6 million but showed growth in normalised trading profit. The duty- free business realised marginal growth on the back of strong dollar sales after adding back the release from restraint payment in 2004. Good progress has been made in managing the problems in the Virgin Atlantic concession. The African art and curio operations were affected by reduced tourist spending. Issued by du Plessis Associates on behalf of Tourism Investment Corporation. dPA contact Helen McKane Tel : +27 11 728 4701, Fax: +27 11 728 2547, Mobile: 082 330 2034 or e-mail: tourvest@dpapr.com website : www.tourvest.co.za Date: 18/08/2005 12:16:05 PM Produced by the JSE SENS Department
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