Drop in tourism hits Newmans

Press, 23 September 1988, Page 17

Drop in tourism hits Newmans

PA Wellington The downturn in tourism pushed Newmans Group into a $1,712,000 loss in the year to June 30, reversing the previous year’s $9,064,000 profit. Extraordinary gains of $7,360,000 saved the company’s total profit, resulting in a $5,648,000 surplus, down 75.7%. The extraordinaries came from the sale of subsidiary and associate company interests, but were still lower than the previous year’s $14,160,000 extraordinary profits, which gave Newmans a final result then of $23,224,000. Newmans is now controlled by Corporate Investments, with a 52% shareholding mostly acquired from troubled Rada Corporation earlier this year. The head office of the tourism group is being moved from Nelson to Auckland. Newmans’ loss before extraordinaries came in spite of a 31.4% rise in

the company’s turnover to $384,582,000. The first-time inclusion of trading by travel agent Atlantic and Pacific Travel brought that increase, directors said in reporting yesterday. They attributed the reduced total result to a poor performance by a subsidiary, Truck Investments, in addition to the tourism downturn which had become particularly evident in the first half of 1988. Other trading had been adversely affected by the general economic downturn and the strength of the New Zealand dollar. Newmans still had a strong balance sheet, they said, but they recommended no final dividend to top up a 5c a share interim payout. Dividends should be adequately covered by trading profits, they added. The annual dividend rate previously was 11.5 c a share (23%). The company had a loss

of $7,260,000 before tax and equity accounting, in contrast to the previous year’s $5,635,000 profit. As with the previous year, tax was a credit, of $4,986,000 ($3,930,000). Minority interests added to the size of the loss with a $129,000 deduction ($818,000). The loss was partially offset by a share of associate company equity profits up to $691,000 ($317,000).