ILT’s annual revenue is highest ever, profit down
The Invercargill Licensing Trust recorded its highest-ever sales – $110.4 million in the financial year that ended on March 31.
It was 4% ahead of gross sales reported in the previous year making it “another record year” for the trust, a report from the chief executive officer to the board stated.
Chief executive Chris Ramsay said the profit for the year would be behind last year’s, but “relatively in line with budget”.
It was forecast to finish the year with $6.3m in profit before tax and donations, according to the report.
All of the 4% gain it made was in the first half of the financial year, while the second half saw the effects of inflation and the cost of living crisis on its revenues.
Ramsay said it was positive to see the year’s growth from The Langlands’ operations.
“The first half of the financial year revenues were really strong and well ahead of the same six month period [on] the year prior, but that included a period where The Langlands wasn't fully operational, and we still had some Covid restrictions.
“Once we hit the anniversary, which was September/October last year, revenue started to flatten and got relatively lumpy.”
That was visible in its January result, he said, where its profit plunged by 91%.
The depreciation of The Langlands hotel had the “biggest impact” on its bottom line – the net income – and its depreciation cost had doubled.
“That's the other big difference between our profit from 12 months ago, and what we believe our profit will be this year.”
Previously, the ILT had put some of its profit away to build the new hotel, and in the last four to five years, it had made the decision to be “more aggressive” in its capital expenditure and reinvestment in its existing businesses.
“We would make, on average, say, $6[million] or $7m [profit] before tax. Roughly 50% of that goes to donations back into the community, and the other 50% goes to reinvestment into our existing properties.”
The Langlands’ marketing team was focused on bringing business from both national and international audiences via conferences and meetings and inbound tourism.
The hotel’s average yield per room was “well over” $220 a night, and across the whole year occupancy was just over 50%, Ramsay said.
In comparison to its first year of operation, The Langlands’ revenue had improved slightly in the 2023-24 year, but the majority of its gain was from yield rather than occupancy, Ramsay said.
While the coming financial year would be challenging, the trust would focus its attention on conference and events activity, he said.
In the four week period to March 31, the ILT’s total sales were 1% down on last year at $8.7m, due to the timing of Easter, and St Patrick’s Day falling on a Sunday, the report stated.
Its forecast for operating profit (before tax and donations) for March was $748,000, which would be $287,000 higher than March 2023.
The ILT donated $9.14m during the financial year. Among those who benefited were the museum redevelopment, Learn to Swim programme, Age Concern, Recycle South and the Southland Charity Hospital.