Cullinan lifts earnings 61% as new ventures take off

br Airport 380 INLSA Cape Town airport at the SAA terminal. Picture: Gareth Smit

Audrey D’Angelo

Cullinan Holdings lifted revenue and headline earnings during a successful year to September and the tourism conglomerate declared its first dividend since 2008 yesterday.

During the year it made two acquisitions – iKapa Tours & Travel, and import agent Glacier Enterprises – and is looking for more opportunities.

Its Thompsons Tours division has opened a Shanghai office and will launch a plan to bring Chinese tourists to South Africa in the coming year.

Revenue rose by 16 percent to R454.8 million and headline earnings leapt 61 percent to R35.5m. Cash generated by operations during the year amounted to R65m and it ended the year with cash and cash equivalents of R188m.

Despite the weak rand, which is discouraging South Africans from travelling overseas but encouraging foreign tourists with strong currencies to come here, the directors say prospects for the coming year “remain positive and we expect continued growth. While there are concerns around external factors such as the economy, inflationary pressures and exchange rates, the fundamentals of the business remain strong.

“The group owns many leading travel brands, has proven leadership within each business unit, an ability to increase market share and a robust financial position while a number of fundamental steps have been taken to support the group’s strategy for the year ahead.”

Among other new ventures, it has been appointed to develop and run SAA’s new holidays division, which will provide travel and accommodation packages to tourists and encourage travel to destinations served by the national carrier and its low-cost division, Mango, outside South Africa.

The directors say the meetings and incentives division opened by the company last year “has proved to be highly successful with the management of the COP 17 conference on climate change in Durban in 2011. The division is seeking further opportunities for expansion in this area.”

iKapa Tours and Travel, bought last year for R14.5m funded from cash reserves, has an inbound tours division and a coach charter division. Its assets were valued at R14m with the balance paid for goodwill. Since the acquisition, iKapa has been materially restructured and has contributed revenue of R17.2m.

In the year to September, the group’s outbound tour operators contributed revenue of R82.6m compared with R79.8m the previous year and an operating profit of R6.8m compared with R5.6m the previous year.

Its inbound tour operators contributed revenue of R96.2m and an operating profit of R26.5m. Its coaching and touring division increased revenue to R123m compared with R97.8m the previous year.

Attributable earnings have risen to R35.5m compared with R22m last year and headline earnings a share rose to 4.95c compared with 3.08c. The dividend is 1c a share.

Cullinan shares closed 4.55 percent higher at R1.15.


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