THE BOTTOM LINE
Ecotourism in SA is a drag, but Botswana is killing it
Wilderness Holdings says all geographical segments – other than SA – reported increases in segment profit
Botswana-based ecotourism company Wilderness Holdings released some eye-catching interim results on Monday.
While the half-year to end August numbers from Wilderness – a frustratingly illiquid stock – may not be of too much interest to local JSE punters, the results do suggest that our neighbour’s tourism sector is enjoying some vibrant times.
Backers of local tourism stocks probably won’t like the comments from Wildernesss directors that all geographical segments – other than SA – reported increases in segment profit.
They noted the two main drags on SA are additional corporate recoveries as well as a slowdown in the road transfer business due to the impact on tourism following the water crisis in Cape Town.
The segmental operating profit breakdown showed the Botswana tourism business growing 27% to 117-million pula while the SA business fell 6% to 33-million pula.
The scary fact is that SA accounted for R505m, or about 65%, of the revenue line. This means margins were badly eroded in the interim period – perhaps indicating how tough the local ecotourism market has become lately.
Overall though, things look encouraging for Wilderness with forward occupancy for the rest of the year matching the previous period.
The strength of the US economy should help numbers too, with the bulk of Wilderness’ clients (46%) coming from the Americas.
Interestingly, Wilderness shares touched their highest level yet on the JSE on Monday, albeit on minuscule volumes. The company, which is now hitting its stride, should offer game investors on the JSE more of a free float to hunt.