‘Omnicorp major force in world tourism’

Press, 28 July 1987, Page 26

‘Omnicorp major force in world tourism’

PA Wellington Omnicorp Investments, Ltd, will make a one-for-four cash issue of ordinary 50c shares to fund further expansion of its international tourist interests. A packed annual meeting of Omnlcorp shareholders was told this yesterday, along with news the company has taken a 50 per cent interest in an enlarged Jagwar Holdings, Ltd. Jagwar was formed last October as a New Zealand tourist company equally owned by Omnicorp and Contlki International, Ltd, the big British-based tour operator. The two will extend their association through an expansion of Jagwar into a Hong Kong-based company with shareholders’ funds of $BO million and an estimated turnover this financial year of $2OO million. Omnicorp’s chairman, Mr Lloyd Morrison, told the meeting the expan-

sion, and the previouslyannounced enlargement of its investment in International Leisure Group (ILG), of Britian, had been accommodated within Omnicorp’s existing financial resources. Nevertheless, the directors decided it was appropriate to increase the the company’s capital base and the cash issue, at par, would raise about $27 million, to give it flexibility for international expansion, Mr Morrison said. The directors projected total assets at next September 30 of $302.8 million, 16 per cent higher than at last March 31 ($260.7 million), and a proprietorship ratio of 66 per cent (62 per cent). The investment in Jagwar was projected to rise from $l5 million to $5O million, and that in ILG from $24 million to $95 million. Mr Morrison said Omnicorp had also increased its shareholding in World Adventures Ltd, formerly

called Australian Himalayan Expeditions, from 50 per cent to 63 per cent World Adventures, now with offices in San Francisco, Toronto and Copenhagen, was forecast to have a turnover of $5O million next year. He said ILG was forecast to raise its turnover this year to $1.6 billion, and Omnicorp’s 49 per cent investment would result in a “positive” bottomline contribution despite historically low margins and cyclical low profitability at the moment Mr Morrison said the link with ILG had made Omnicorp “a major force in the European travel industry, with strong bargaining power with travel agencies, airlines and providers of accommodation.” ILG was one of three companies dominating tourism in Britain. Its investments with that company and with Jagwar and World Adventures, meant Omnicorp

was aligned with the most respected names in international tourism, he said. Mr Morrison predicted the company’s shares would become rated in an international equity market, like Fletcher Challenge and other New Zealand companies gaining global ranking for performance in their industries. Omnicorp’s trading profit this year has been forecast at more than $3O million, 41 per cent ahead of the $17.7 million reported for the year to last March 31. The meeting approved a 2 per cent final dividend (1c a share), and Mr Morrison defended the size of the payout by saying Omnicorp had long seen itself giving benefit to shareholders primarily through a high asset growth rate. When the group had consolidated more tourist operators, generating a greater cash flow, dividend cover would rise, he added.