Skyline lifts profit

Tourism operator Skyline has reported a slight increase in profit before tax despite visitors to its Queenstown and Rotorua gondolas falling 9 per cent.

Skyline announced yesterday a preliminary profit before tax and property revaluations for the year ended March 31 of $24.2 million, up 3.4 per cent from last year's $23.4m.

However, after providing for $7.2m worth of tax and a $7.9m devaluation of the company's property portfolio, profit was $9m, compared with last year's $25.2m.

Chairman Barry Thomas said changed accounting standards introduced last year, meant it had to provide for annual property revaluations, which had significantly distorted Skyline's results.

Underlying trading performance of the group was "very good" and the fundamentals remained strong, he said.

Shareholders were expected to receive a 22c dividend, 21 per cent less than last year's 28c payout.

Skyline's shares were trading yesterday at around $4.25 on the lightly regulated facility Unlisted.

Thomas said the directors believed the reduced dividend was prudent given the amount of capital expenditure it had planned this year and the overall trading outlook.

Skyline was spending $3.5m upgrading its Queenstown gondola site and an additional $4m on a retail development in Rees St in Queenstown after the property was destroyed by fire.

Thomas said it was difficult to predict the forward tourism numbers, but he did not expect any growth in the tourism sector until late next year.

Reduced tourism arrivals had resulted in fewer passengers on Skyline's cableways and luge rides in Queenstown and Rotorua, which all experienced a 9 per cent drop.

However, its Sentosa Island cableway in Singapore had performed well and its operation in Canada saw a small increase in luge rides.

Occupancy at its Blue Peaks Lodge in Queenstown and the Apartments was down about 9 per cent on last year, while occupancy at its Mercure Leisure Lodge dropped by less than 1 per cent.

Skyline had managed to reduce its overhead costs and a fall in interest costs, assisted the company's overall result, Thomas said.

Christchurch Casino, which was 46 per cent-owned by Skyline, reported profits similar to the previous year.

One of the casino's main gaming floors and food outlets was refurbished at a cost of $3.1m and further renovation upgrades were planned for this year, Thomas said.

The Dunedin Casino, a third owned by Skyline, did not trade well and directors and management were working to deal with several issues to improve its results.

- © Fairfax NZ News