31 Wed, Aug 2011
STRONG local currencies, soft market conditions and the oversupply of product are among those factors that have most influenced this year’s results for Wilderness.
Although the group reported a 9% increase in turnover to P949m (R988m), operating profits have decreased by 26% to P51m (R53m) according to the audited results of the company for the financial year ending 28 Feb 2011.
In his statement as chairman, Malcolm McCulloch said the economic climate remained challenging with continued softness of demand in Wilderness’ source markets and unfavourable exchange rates. “In our view these circumstances will not change in the short term.”
Discretionary income in key source markets like the USA and Europe have led to soft demand, agrees ceo Andy Payne. “Bednight sales in our infancy businesses in Zambia and Zimbabwe rose by 30%. In our mature businesses, Botswana saw some growth in bednights sold but this was largely offset by the drop in demand for Namibian and South African product. Turnover increased in all source currencies except the rand and the Namibian dollar.”
Bednight sales were down 1% in South Africa, and 18% in Namibia. Zambia and Zimbabwe bednight sales were up 29% and 31% respectively, while the group’s Botswana properties saw an increase in sold bednights of 5% and on North Island in the Seychelles, 26%.
Among the highlights over the financial year were the reorganisation and refocusing of the group to reposition the organisation and enhance business performance, as well as rebranding the group to release and differentiate niche trading brands.
“In the latter half of the year under review we rolled out a number of new brands and essentially reorganised the business in a way that we believe clarifies the unique features of each of the different elements of the group and allows them to focus on their core purpose. We moved from what was a house of brands to what we have termed a brand house.”
“The group brand is now simply Wilderness, with two non-profit entities – Children in the Wilderness and Wilderness Wildlife Trust – associated, as well as several trading brands: Wilderness Safaris, Wilderness Adventures, Wilderness Explorations, Wilderness Air and the Wilderness Collection,” explains Payne.
According to Wilderness, there are signs of slow recovery from the depressing demand for luxury and discretionary purchases since the global economic crisis hit in 2008. “The delayed and uncertain recovery of the European economy has been a particular issue for some of our businesses, most notably those in Namibia, which are heavily dependent on European visitors.”
From an opportunity perspective, Wilderness cites significant possibilities in countries such as Zimbabwe and Zambia. “Significant opportunities also exist in countries where we presently do not operate at all.”
“We presently have no footprint in east Africa. Given the strong industries in Kenya and Tanzania and the potential in other countries such as Uganda and Rwanda, it is likely that opportunities for expansion exist in this region.”