Vacation to consolidate

Press, 6 March 1978, Page 14

Vacation to consolidate

PA Auckland Vacation Hotels, Ltd, intends to continue to consolidate existing activities this year, and at the same time hopes to go ahead with a major re-development of Brents Hotel in Rotorua. These aims are disclosed by the chairman (Mr J, T. Sheffield) in his annual review in the year to October 31. These would place Vacation in a position to take advantage of an increase in the tourist industry, he says. As announced, group net profit rose 19.8 per cent to $553,783, largerly because of a lower tax provision. The year brought some problems. There was a drop of about 20 per cent in the number of tourists from Australia, and the coach tour business and the company’s South Island resort areas suffered in consequence, he says.

Increases in overheads added substantially to expenditure and generally represented costs which could not quickly be recovered. i Substantial renovations and alterations were carried out at the Auckland Intercontinental Hotel. The new 70=bedroom wing at Te Anau was about three months ahead of schedule, and would be ready well in time for the 1978 tourist season. Plans had been prepared for the erection of a 218room tourist hotel on the Brents site. Overseas funds are available for the project and the proposals for the development were now being examined by the Tourist Accommodation Development Committee, Mr Sheffield says.

| The higher profit was learned on revenue which !rose 33 per cent to $13.7M, I but costs and expenses were jup 35 per cent to almost $12.9M. As a result the net profit before tax was only slightly higher at $899,263, compared with $892,488 for the previous year. The taxation provision was $84,820 lower at $345,480, but depreciation was $47,088 higher at $411,395. The steady 9 per cent ordinary dividend required an unchanged $293,964. The earning rate on ordinary capital was up from 14.2 per cent to 15.6 per cent, and that on average shareholders’ funds fell from 9 per cent to 8.8 per cent.