Cullinan Holdings controls a spread of business units that trade in the travel and tourism
industry in Southern Africa. The bulk of the company’s income is derived from Tour Operating
where its core brand Thompsons enjoys significant market shares in both the incoming and
outgoing sectors. It also has a small share of the retail travel business.The retail brand Pentravel
caters exclusively for the leisure traveller and has 18 branches. Thompsons Travel provides
corporate travel services and has three branches. The company has sales offices in Japan and
Singapore which supply the incoming business. The intention is to expand both the delivery
footprint within the region, and exploit international opportunities when they arise.
Review of the past six months
Profit before taxation for the six months to March 2005 was similar to that for the comparable
period last year. *The accounts reflect a taxation charge which reduces the attributable and
headline earnings by approximately 30%.This provision for taxation is a non cash charge to the
income statement as the company has an assessed tax loss. It is expected that this loss will be
fully utilised over the next two financial years.
Cash flow remained positive during the six month period despite an ongoing capital expenditure
programme, mainly on computer and telephone technology, a small acquisition and an increase
in working capital.
The outbound business performed well in spite of the tsunami tragedy which occurred over the
peak season in Thailand, a major market for our outbound business. The inbound business
achieved its budget in difficult circumstances.
Thompsons Holidays (Outbound)
The strong rand continues to support growth in the market for outbound travel. On the
domestic front, a significant switch from scheduled to low cost air carriers is taking place.This is
attracting new buyers into the air holiday market which will be good for tour operators.
Thompsons Africa (Inbound)
A shortage of air seats at affordable prices from major hubs to South Africa is a source of
concern.The Thompsons African delivery footprint is expanding and the new offices in Victoria
Falls and Windhoek are performing well. Traffic to countries outside South Africa itself is
increasing, which is encouraging.
Retail Travel
Pentravel has opened three new shops, and start up costs reduced an otherwise good
performance.The Corporate retail brand Thompsons Travel showed a welcome improvement in
its performance.The traditional commission based model for air ticket sales is being changed to
a fee based structure.The new business model has been accepted by all corporate customers,
and no disruption to the business is anticipated.
Manex and Power Marine
Manex supplies components to the local yacht building industry and distributes scuba diving gear
to the retail trade. This division had a difficult six months. It is largely dependent on the health
of the local yacht building industry which is being adversely affected by the strong currency.
Prospects for the next six months
Assuming that the currency remains stable at current levels, no major changes are expected in
the trading performance during the next six months.
Dividend
The board has declared an ordinary dividend for the financial year ending September 2005
of 1 cent per ordinary share (number 126) to all shareholders. The last date to trade
cum dividend will be on Thursday 9 June 2005. Shares will commence trading ex dividend on
Friday 10 June 2005.The record date will be Friday 17 June 2005.The dividend will be paid on
Monday 20 June 2005. Share certificates may not be dematerialised or rematerialised between
Friday 10 June 2005 and Friday 17 June 2005, both days inclusive.
26 May 2005
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