Poor ski season blamed for loss

Press, 26 February 1986, Page 33

Poor ski season blamed for loss

PA Wellington A disappointing 1985 ski season was the main reason for Mount Cook Group, Ltd, recording a loss for the six months ended November 30, the directors said yesterday. The company reported a loss of $1,089,000 before extraordinary items, compared with a $591,000 profit for the same period the previous year. Turnover was up 21.5 per cent at $45,659,000 ($37,590,000) and the company had a pre-tax operating loss of $2,082,000 ($468,000 loss). An export tax incentive credit added $978,000 ($1,022,000) for an after tax loss of $1,104,000 ($554,000 profit).

Minority interests were $15,000 ($37,000) and extraordinary items added $559,000 ($414,000), giving a loss of $530,000 ($1,005,000 profit) after extraordinary items.

These items reflect the profit on disposal of the company’s helicopter operation, the sale of surplus property in Napier and Mangere and the disposal of some older buses.

The directors said the first six months of the company’s operation is traditionally reliant on a good ski season in what would otherwise be the off-season. “The 1985 ski season was very disappointing and the major reason for a loss being recorded for the half year,” they said.

“The first stage of the Remarkables ski area opened late because of lack of snow, and closed early for the same reason. Coronet Peak opened in late June, but early good falls were not sustained through July and August.

“These conditions coincided with a good ski season in Australia and, together, they reduced the number of visiting skiers.

“This had the-: further adverse effect bn coach and airline services. "The tours section increased gross revenue by

37 per cent but the strengthening of the New Zealand dollar brought substantial exchange losses, while fine costing, because of competitive pressures, severely reduced margins. “Airline operations also showed positive growth,

despite fairly aggressive competition from a newcomer.

“Reduced margins because of discounted airfares weakened the result.” The directors said Mount Cook operates in a high capital investment industry and, despite a more than satisfactory debt-equity ratio, the heavy increase in interest rates adversely affected profitability.

Profit for the second half of the year is likely to be in line with that for the same period last year, they said. The high wage round will count against any spectacular recovery of the first six months losses. However, the forecast result will comfortably cover an ordinary dividend equivalent to last year’s, the directors said.