v2 Report - Additional Information Supplement
JTM Jasons Travel Media Limited
Press releases
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29 Aug, 2007, 14:00 Jasons To Purchase Today/Tonight and make rights issue |
| 29 August 2007 For Immediate Release Jasons To Purchase Today/Tonight Publications and make 1 for 6 rights issue Jasons Travel Media is to purchase the operations of the Today/Tonight partnership in Christchurch and Queenstown for around one million dollars, as it expands its investment in South Island tourism marketing. Today/Tonight publishes two successful visitor guides in Christchurch and Queenstown. Its Christchurch guide is published five times annually while its Queenstown guide publishes ten times a year. The partnership also licences a further guide into Southland and Fiordland, and operates a number of websites under the Today/Tonight brand, including www.todaytonight.co.nz. "Today/Tonight is a logical fit to our other South Island investments," said Jasons CEO Steven Joyce. "The publications are well-performing operations, and they give us a stronger local presence in both Canterbury and the Queenstown area - which are key New Zealand tourism markets, and a stronger presence in the attractions and activities area." "This purchase will complement our other recent purchase of brochure distribution and publishing operations in Queenstown, and also our established Auckland and Wellington What's On Visitor Guides", he said. Jasons will fund the purchase with part of the proceeds of a pro rata rights issue to existing shareholders. "We advised shareholders at our recent annual meeting that we would consider making an equity issue as our strategy unfolded," said Chairman Geoff Burns. "This is an appropriate time to involve shareholders further in what has been a set of exciting developments for the company". The Rights Issue has been set at one new share for each six currently held at a price of 70 cents. Timing details of the issue will be finalised shortly. An investment statement and prospectus will be sent to shareholders, and until then no monies are being sought. The directors have indicated that they will be taking up their entitlements to the issue. Mr Joyce said that today's acquisition would work well alongside the web strategy the company has been developing. "With our new commission-free Jasons.com website, we are confident we can leverage our print business online, and vice versa. The internet and specialist print publications are the primary means by which visitors obtain travel information. Having a foot firmly planted in each will pay good dividends for our clients," he said. Today/Tonight CEO Nick Reekie says that combining with Jasons made a huge amount of sense for Today/Tonight and its clients. "We will be able to provide clients with much stronger distribution both around Canterbury and Queenstown and further afield, and online opportunities that we could not have offered on our own", he said. "Jasons is very supportive of our client-focused approach and personal service", he said. "Aside from the new opportunities that are open to us, it will be very much business as usual for our clients and staff." Mr Reekie is joining Jasons, heading up its Monthly Visitor Guide operations from his Christchurch base. "We are really pleased that Nick and his top people are all staying involved," says Mr Joyce. "Nick is a passionate tourism marketer and has done a great job building up Today/Tonight in a very competitive environment. We look forward to working with him and his team." Jasons Travel Media Limited is an NZAX listed public company which specializes in tourism marketing, with operations on the web, in print, and in brochure distribution. The company publishes more than 45 printed visitor guides and directories annually and supplies online travel information through www.jasons.com for more than 3900 destinations across New Zealand, Australia and the South Pacific. ENDS Steven Joyce Chief Executive Jasons Travel Media 021 442 148 Geoff Burns Chairman Jasons Travel Media 027 458 2832 |
Chairman's report
A YEAR OF STEADY IMPROVEMENT
Jasons Travel Media has had a year of steady performance improvement in 2007 as it lays the building blocks for growth in future years. The company recorded an 11% higher net profit after tax for the 2007 year. This positive result continues on from our successful first year as a listed company in 2006. Directors anticipate better results again for the 2008 year ahead following operational restructuring over the last six months.
Jasons has recorded a 3% increase in turnover and a 22% increase in operating surplus before tax. This has occurred at the same time as we have made some significant value generating changes to the business. Annual operating revenues were $12.30 million in the year ended 31 March 2007, compared with $11.92 million in 2006; while after-tax profit before amortisation was $726,000, versus $666,000 in the previous year.
Interest charges fell as a result of the funds raised in the 2005 public offering. Interest in the 2007 year was $256,500, down from $437,700 the previous year. Capital expenditure was $438,500; down from $812,200 in the 2005/06 year. Bank debt increased by $400,000 but this partially funded a reduction in current liabilities of $526,000.
DIVIDEND
The directors have approved a final dividend of 1.5 cents per share ($255,000), payable on 2 August 2007. Taken with the interim dividend of 1.5 cents per share ($255,000) paid on 31 January 2007; total net dividend is 3 cents per share. Gross dividend for the year, adjusted for imputation credits, is 4.5 cents per share.
MANAGEMENT CHANGES
A major event during the year was the retirement of company founder and CEO John Sandford from his operational role, after 39 years at the helm. The high degree of trust that travellers have for the Jasons brand today is very much as a result of John’s careful stewardship since he started the company back in 1967. John retains a strong involvement in Jasons through his family shareholding and his role as a non-executive director. Steven Joyce, who joined the company as a non-executive director in January 2005, took over as CEO in August 2006. Steven’s background is in marketing, media and the management of public companies, through the development of his own successful radio company.
RESTRUCTURING
Following Steven’s appointment as CEO in late August last year, the company undertook a full review of its operations. This has resulted in some internal re-organisation. The previously separate marketing, administration and customer services functions have been combined into one business services group under the leadership of General Manager, Business Services, Mary Ansell. These changes have meant a reduction of the equivalent of five full-time positions in the company. Savings of a little over $380,000 per annum should flow through to the 2007/08 full year result.
JASONS PRINT
The company’s printed travel guides continued to perform well in the year. The flagship Motels Director y continues to grow steadily, along with the other New Zealand publications. Significant growth of note was experienced in Jasons ‘Business Traveller’ guide. This growth somewhat counter-intuitively appears to be a result of more businesspeople performing their own bookings as a result of the internet. We are seeing an increased demand for offline information to support their online activities.
It was a solid year in the South Pacific publications, although political events in Fiji are a concern for tourism in that country and across the wider South Pacific. We published on schedule in Fiji during the year, but will keep further publications there under review in the year ahead. Due to a realignment in publication dates, one less regional RoutePlanner was printed in New Zealand during the year, but that will resume in 2007/08. During the year a total of 42 print publications were released across New Zealand and the South Pacific.
JASONS WEBSITES
The performance of Jasons Travel Channel™ was steady rather than spectacular during the year. There were significant increases in the numbers of visits to client listings and enquiries to clients for bookings. Of interest is the strong growth in online users ordering print guides to be posted to them before they travel. This is proving to be a significant part of our distribution effort. We made a decision in late 2006 to change web developers.
Since that time, we have been working with the new developers to provide a much simpler search function for our listings and to incorporate interactive mapping. A new version of the site is due for release shortly. Following that release, we have planned a programme of steady releases of enhancements to the site in the year ahead.
JASONS PRINT DISTRIBUTION
Our print distribution teams in Auckland and Christchurch undertake distribution of Jasons printed guides, plus the distribution of third party brochures through the VisitorPoint brochure distribution network. Under the leadership of Clive Jimmieson, we have seen steady revenue and profit growth in this division during the year. Both branches have moved into larger premises during the year, and the quality of our distribution services, which was already good, has been further improved. In October we bought back the Bay of Plenty franchise (Tauranga and Whakatane) and have since been steadily redeveloping that area.
JASONS AUSTRALIA
Following the consolidation of Jasons Australia as a wholly owned subsidiary in 2005/06, we have conducted a review of operations in that market. We have recently restructured and increased the size of our Queensland-based sales team and we are now actively looking for opportunities to grow our market position both in Queensland and adjacent states. We currently publish the Queensland Directory and three touring maps in Queensland, plus a Tasmania Accommodation Directory.
RECENT DEVELOPMENTS
At the time of our annual announcement, we advised that Jasons was now looking for opportunities to grow the business, both organically and by acquisition. Recently the company has announced two acquisitions:
Strait Solutions Booking Engine and Websites
Jasons is to purchase the online accommodation booking businesses of Strait Solutions Limited which include the websites www.holidayguide.co.nz www.dutymotel.co.nz www.roomsearch.co.nz and www.booknow.co.nz These websites together have one of the largest lists of accommodation properties supplying room availability and collecting online bookings in New Zealand. The purchase is a natural fit with Jasons, which operates one of the largest travel websites in New Zealand, but hasn’t until now provided a booking engine with online availability.
Both Holiday Guide and Jasons operate a commission-free advertising-based revenue model. This is an important option for tourism operators, who are being bombarded with websites seeking to take commissions from their bookings. Jasons history is to stand alongside operators and to assist them, working with their customers on a direct basis. This acquisition will allow us to continue working for the industry in that way.
Whytewaters Group Visitor Guides and Distribution Business
The second acquisition is the purchase of Whytewaters Group’s brochure distribution business in Queenstown and two of that company’s print publications, Queenstown Visitor Guide and Queenstown Dining Guide. This move will allow the company to extend its direct involvement with Queenstown in particular and with tourism activities operators more generally. It is a first step to taking a much larger role in South Island tourism marketing.
The two acquisitions were completed at the end of June and together they have cost less than $1.5 million. They are being debt-funded. They signal that Jasons is keen to take a more active role in the tourism marketing area. While the revenues are not large in relation to Holiday Guide in particular, the purchases will strengthen our overall online offering considerably. Your directors believe that both acquisitions will add value to all three of our core marketing platforms: online, print and print distribution in the years ahead.
JASONS PEOPLE
Jasons is fortunate to have a dedicated and experienced team of people working for the company. Their understanding of and loyalty to the Jasons brand is a real asset for shareholders. They have been asked to cope with a number of changes this year and they have risen well to the challenge. We thank them on behalf of shareholders for their hard work on the company’s behalf.
JASONS 40TH BIRTHDAY
2007 is a milestone for Jasons. The company has been operating for forty years, initially with both travel and farming publications and since 1979 as a specialist travel media company. We are having a number of functions through the year for various stakeholders. The annual meeting of the company will have a 40th birthday theme. Having a significant birthday is always a reminder of how far we have come and of the opportunities that lie ahead. Your directors and our management team look forward to developing those opportunities from the solid base that forty years of experience in the market has provided.
Geoff Burns (Chairman) . . . . . . . . . . . . . . . . . . . . . . . . . . . Steven Joyce (Chief Executive) . .
Director's Report
Your directors are pleased to submit to you, our shareholders, the annual report and financial statements of Jasons Travel Media Limited for the year ended 31 March 2007.
PRINCIPAL ACTIVITIES
Jasons Travel Media Limited is a New Zealand-based multimedia publishing business specialising in travel and tourism. It is publicly listed on the NZAX board of the New Zealand Exchange (NZX) under the issuer code JTM. The Jasons group head office is in Auckland. Jasons Australian office is located in Brisbane. The company has two distribution centres, one in Auckland, the other in Christchurch.
ISSUED CAPITAL
The company has 17,000,000 fully paid ordinary shares on issue, following the issue of 7,200,000 ordinary shares at 50c each fully paid in the Initial Public Offer, in June 2005.
DIVIDEND
The dividend policy for the financial year ending 31 March 2007 was to pay dividends of between 70-85% of annual net profit after tax, subject to various factors. A dividend of 1.5 cents per share was paid in January 2007. The directors have approved a final dividend of 1.5 cents per share payable 2 August 2007. Adjusted for imputation credits, the gross dividend is 4.5 cents per share.
DIRECTORS
John Sandford retires by rotation in accordance with the company’s constitution and being eligible, offers himself for re-election. No other nominations were received by nomination closing date.
CORPORATE GOVERNANCE
The board is responsible for the long-term growth and profitability of the company. It charts the direction of the business and monitors management performance on behalf of shareholders. The board ensures the company is engaged in appropriate strategic planning, operational monitoring, risk management and evaluation of key employees. The board works to ensure the integrity of internal controls and information systems. The board comprises three non-executives and one executive. The chairman and deputy chairman are non-executive members of the board.
There are two board committees:
Audit (Mike Simm and John Sandford)
This committee assists the board’s oversight of the company’s financial statements, financial reporting processes, internal accounting systems, financial controls, external annual audit, risk identification and management.
Remuneration (Geoff Burns and Mike Simm)
This committee assists the board by establishing remuneration policies and practices for directors, executives and employees.
