| Wed 23 Aug 2006, 12:16 | | Tourvest Starts Growth Drive As Improved Efficienc |
|
TRT
TRT
Tourvest Starts Growth Drive As Improved Efficiencies Boost Its
Performance In Flat Market
Tourism Investment Corporation Limited
(Incorporated in the Republic of South Africa)
(Registration number 1996/008144/06)
Share code: TRT
ISIN: ZAE000012472
TOURVEST STARTS GROWTH DRIVE AS IMPROVED EFFICIENCIES BOOST ITS PERFORMANCE
IN FLAT MARKET
Johannesburg, 23 August 2006 - Three years of restructuring and
refocusing paid off for Tourvest in the 12 months to June as improved
operational efficiencies helped the group to post a 24% operating income
increase in a flat market.
Revenue of R1.3 billion was marginally ahead of the previous year"s R1.2
billion but operating income grew from R151 million to R187 million. The
rise in operating income would have been higher but for a R5 million
provision for a supplier dispute and a R2.5 million charge related to the
method of accounting for a new lease agreement.
Headline earnings per share rose by 12% to 12.9 cents. The difference
between the operating income and headline earnings growth rates is
attributable to the higher STC charge on an increased final dividend of
5.75 cents per share, higher interest payments and an increased minority
charge related to the recent acquisitions at Victoria Falls and Cumming
Travel.
Chief executive Tommy Edmond noted that the inbound tourist market had
shown little growth, with overseas visitors to South Africa increasing by
only 3.4% between July 2005 and April 2006. Trading conditions in the
outbound market were also difficult, with the reduction in airline
commissions and high direct sales through the internet impacting on the
domestic travel industry.
"Tourvest"s satisfactory performance in this indifferent trading
environment is a direct consequence of the remedial measures of recent
years. These have had the intended effect of increasing efficiencies and
cutting costs, and of enabling the streamlined group to benefit fully from
the integration of its substantial skills, resources and buying power,"
Edmond said.
Reviewing the operations, Edmond said the inbound tour operator business
had done well compared to the previous year but inbound products had
performed below expectations. The retail travel businesses had again
produced strong growth, while the lossmaking outbound tour operators had
shown a material improvement.
The American Express foreign exchange business had suffered from a
reduction in inbound US dollar volumes as overseas visitors switched from
travellers cheques and cash to credit and bank cards. The retail
merchandising division had a good year on the back of an exceptional
performance by its duty-free operation, which grew its operating income by
more than 90% from higher sales on the airlines and achieving shrinkage
control below international norms.
"The successful restructuring of the group has created a strong platform
for future growth, and our focus now is on expanding the business both
organically and by acquisition. A major component of this expansion drive
will be the leveraging of the group"s proven - and, in some sectors,
world-class - skills into new markets," Edmond said.
"This has already started with the entry of Tourvest Retail Travel into
Nigeria and Ghana and the acquisitions of recent months. These include
Cumming Travel in South Africa, the Ganzee souvenir store chain in the
Caribbean, the Adderley Hotel in Cape Town, the hotel management business
Relais Hotels, the Makalali game reserve in Limpopo, the Tank destination
restaurant in Cape Town, and the East African tour operator Vintage Africa.
Tourvest has also recently been awarded the concession to develop a new
luxury tented camp in Tanzania"s Serengeti National Park."
Edmond said the acquisitions were not expected to contribute to earnings in
the current year but the group was nevertheless budgeting for good earnings
growth at present exchange rate levels. He cautioned, however, that the
volatility of the rand made forecasting difficult.
For further information call Tommy Edmond, CEO, on 011 728 0540
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
Sponsor : Investec Bank Limited
website : www.tourvest.co.za
Date: 23/08/2006 12:16:03 PM Produced by the JSE SENS Department
