Cullinan earnings climb by 25.2%

This translated into diluted headline earnings per share of 3.79c versus 3.02c for the previous comparable half-year.

Profit before taxation was up 24% to R36.9m‚ while cash resources increased by R5.7m.

"The business continues to generate strong cash flows and‚ despite incurring quite significant capital expenditure‚ has seen a modest growth in cash resources to R161m from R155m. The company also bought 90% of Glacier Enterprises for R18‚9m‚ which was also funded out of cash resources," it said in a statement.

Cullinan declared and paid an additional dividend of a cent per share in the period.

The company added that the six-month period had been characterised by strong growth in the domestically-dependent travel and outbound tourism business units despite the unpredictability in the local economy. The Inbound divisions had seen positive results with some signs of a mild recovery in Europe and the UK‚ and good growth out of the USA and Asian markets.

According to the company the coaching divisions, which were primarily dependent upon the inbound tourism sector, had benefited from the growth and posted particularly pleasing results.

"Profit growth for the period resulted from a general growth in all of the group's travel businesses as against any one event or one business in particular‚" the group added.

Operational changes

The period had also been an active and successful one for finalising a number of changes that had helped to secure a strong operational base for the group for the future. These included moving the coaching divisions to a new depot in Salt River in Cape Town in November last year and moving various Cape Town-based travel businesses into a single office in Chiappini Square in March.

Cullinan also completed the first phase of its inbound reservation system allowing the group to transact electronically with suppliers and customers. The next phase of this implementation would be to bring the outbound tour operators onto the same system. This is likely to happen in the second half of this year.

Cullinan invested heavily in the fleet of coaches and has started to upgrade its Johannesburg coach depot to an equivalent standard to its Cape Town depot. This upgrade is due to be completed by November.

"In addition to these operational changes‚ a number of successive periods of improvement in the business have placed the group in a good position to look for new opportunities‚ both through organic growth and through acquisition. Growth initiatives include the launch of the Chinese inbound department with staff based in Cape Town. It has opened a sales office in Shanghai.

Cullinan's Planet Africa division opened a branch in Tokyo in February to try to secure a dominant share of the Japanese tourism business coming to southern Africa.

"On the local front‚ we believe the time is now right for Pentravel to expand its travel agency network with the roll-out of six additional branches in shopping malls. The first of these will open in June," Cullinan said.