COMMERCIAL Mt Cook Forecasts Increased Profits

Press, Volume CVII, Issue 31421, 14 July 1967, Page 12

COMMERCIAL Mt Cook Forecasts Increased Profits

The period ahead for Mt. Cook and Southern Lakes Tourist Company, Ltd., Timaru, promises to be the most interesting and rewarding in the company’s says the chairman and managing director (Mr H. R. Wigley) in his annual report.

The percentage of overseas visitors using the company’s services is very high, leaving the company largely isolated from local economic conditions. The percentage of overseas visitors using the airline in the six-month period was 70.

As announced, profit-for the year to March 31 rose $33,258 to $56,030. The dividend, raised from 8 to 9 per cent, requires $6524 more at $23,984 and is covered 2.3 times by profit. Future Expansion As to the future, Mr Wigley says that because of the company’s virtual monopoly of air service and charter operations from Christchurch to Mount Cook, Queenstown, and Manapouri, the company can confidently expand to cater for the expected upsurge in tourist volume. There is no reason why Mount Cook’s profitability cannot be maintained and increased now that the volume of traffic has reached a certain level where the tourist industry is capable of earning worthwhile profits. Total revenue rose 23 per cent to $1,042,770 in the latest year. The increase in revenue was largely because of

the Government tax remission incentive scheme which has allowed the company to considerably increase its overseas promotional efforts in the last three years. Earning Rates The earning rate on average shareholders’ funds is up from 7.7 to 15 per cent while the rate on average capital, all ordinary, is up from 10.4 to 21.1 per cent The latest year finished on a strong note. In spite of the very late snowfall on Coronet Peak and the international airline industrial troubles, the forecast made to shareholders in December proved to be correct, says Mr Wigley. The shortage of accommodation has had the effect of spreading the traffic over a longer period and this is diminishing seasonal problems from which the company has always suffered. The airline division, which made a loss of about $28,000

the year before, made a modest profit in the latest year. It earned more than the coach division and its potential capacity for earning is great It is expected that a decision will be announced soon on the possibility of the pur- , chase of a turbo-prop aircraft, i The coach division in- . creased its revenue consider- . ably and Coronet Peak had a , record season. Air Services Mount Cook Air Services . Ltd., a wholly-owned subsidi- , ary, earned nearly $40,000 , more than in the previous year. The latest profit is after providing $5156 more for depreciation at $57,972 and $36,096 more for tax at $49,256.

Shareholders’ funds are $36,648 higher at $391,972 and include capital steady at $266,498.