Tourvest's inflight business hit by rand appreciation

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Profits drop by 43% as the rand's strength against the dollar cuts spend from inbound tourists

South African retailer Tourvest Group has experienced a 43% drop in pretax profit to R144.4m ($24.2m) for the financial year to June 25 after the strength of the rand hit inbound tourism spend. Revenue of R1.56bn ($260m) was down by 6% compared to 2003.

The company's inflight duty-free business has suffered from a lower rand turnover even though sales in dollars were higher. Tourvest chief executive Tommy Edmond said the rand's appreciation against the dollar this year has reduced both South Africa's competitiveness as a tourist destination and the discretionary spend of tourists. Outbound tourism benefited from the strength of the rand but the group's 75% skew towards inbound tourism meant the overall impact was negative.

Edmond said the company would continue to search for acquisitions even though it was unsuccessful in its bid for travel company Sure earlier this month. "While we are disappointed at the negative outcome of our conditional offer for Sure, Tourvest remains an acquisitive business and we are examining all opportunities for adding critical mass to our travel-retail operations," he said.

Tourvest Duty Free won the worldwide concession for Virgin Atlantic Airlines in May this year.