Jasons Profit Announcement

The motel industry still relies on the print media for the majority of its marketing with directories still attracting the major spend.

While print is by no means dead, it would appear to be dwindling in significance as the internet increasingly provides more perceived cost competitive opportunities.

Jasons have a tremendous goodwill built up over many years with many hard core loyal motel clients that value their publications and associated products. But times are changing and loyalties are soon forgotten as a third of operators exit the motel industry every year.

Specifically for motels, Jasons have developed an internet directory and reservation product that adds value and compliments its core print product. With print, Jasons have a significant competitive advantage with their economies of scale and distribution, however as there is a shift in favor to the internet by clients, it will become more difficult to compete in this crowded medium.

Under the circumstances, it would appear that the financial results for Jasons are not too bad.

www.nbr.co.nz
Robert Smith
June 11 2009

Less demand for advertising in local visitor maps and guides, along with the launch of several new publication, has seen Jasons Travel Media post an 18% drop in profit for the year.

Thanks largely to the launch of several new publications, the company lifted revenues by 2.4% to $13.98 million for the year ending 31 March, but costs associated with those new activities also helped drag profit after tax down by 17.9% to $806,000.

This is still slightly better than the profit forecast issued by Jasons last month, when it said after-tax profit would fall from $982,000 a year ago to $787,000.

However, this was still below earlier projections, with the media company blaming the economic climate for its dour performance.

But with the company putting a lot of faith into new publications launched in the second half which have not yet reached targeted revenues, chief executive Matthew Mayne says the next year should be more stable.
"We have taken a conservative approach to forecasting revenues for peripheral products and local visitor guides. Some uncertainty remains around the short-term prospects for the tourism sector. However, with the benefit of a full year's contribution from last year's acquisitions and other new products, we expect to match the 2009 result.”

He says Jasons is building market share in a glum situation and is also exploring expansion opportunities in the Australian market.

“Australia continues to be the largest source market for visitors to New Zealand and the most significant destination for New Zealanders."

In the past year, Jasons has launched new tourism related publications in Christchurch, Rotorua and Auckland, and has also acquired tourism brochure distribution businesses in Rotorua and Northland.

As it is physically impossible for any company to reveal results without shifting a little blame on to the general economic climate, chairman Geoff Burns says lower than expected revenues were unavoidable due to a reduction in demand for advertising in smaller publications, particularly some local visitor maps and guides.

A fully-imputed final dividend of 2.24 cents at the end of next month, maintaining the annual dividend at last year’s level.


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