Fin24

Cullinan sales down, profit climbs

2010-06-01 08:05

Johannesburg - Tourism and leisure company Cullinan Holdings [JSE:CUL] on Tuesday reported diluted headline earnings per share of 1.64 cents for the six months ended March 2010 from 0.79 cents a year ago.

Revenue was lower at R200.35m from R209.4m, but operating profit rose to R14.23m from R7.90m before.

The company said the results for the six months showed a substantial improvement on 2009. Although sales continue to be affected by the general economic malaise, the measures taken in the last 12 months to improve product and efficiency and manage overheads resulted in improved performance in its travel and tourism businesses, it said.

As anticipated, the marine businesses struggled as the effects of the economic slowdown really took hold in this period. Fortunately, steps taken in anticipation of this have allowed us to manage this slowdown and mitigate the effect.

Cash flow was healthy in the period with cash of R29m generated from operating activities. The cash generated was used to settle long-term borrowings based on expected strong cash generation going forward as well as to recapitalise and improve fleet in both Hylton Ross Tours and Thompsons Touring and Safaris.

Looking ahead, the group said difficult market conditions remain an ongoing challenge for management with the impact of the World Cup still to be seen. Despite these difficult market conditions, Cullinan is cautiously optimistic about its business prospects over the next year.

- I-Net Bridge