Tuesday, June 03, 2008

Newfound results and re-structuring announcements

Newfound NV released their annual results today, and at the same time announced major changes to the management structure, and corporate financing.

The following is the Humber Valley part of the Chairmans statement:
"At the beginning of the year the sales strategy was altered to attract high net worth purchasers to Humber Valley Resort in Newfoundland, Canada. This strategy has taken longer to deliver results than originally envisaged with new sales of US$ 4.7million which was below expectations, although in addition there were a number of re-sales.

We believe that there is a market for our product at Humber Valley at the US$ 750,000 level as evidenced by the re-sale market and from early 2008 this is where we have been concentrating our marketing efforts.

Since the autumn we have focused on vacation marketing to Humber Valley. This is an important aspect of the business as it gives a momentum throughout the year, increases our operational revenues and some of our vacationers have gone on to purchase property. We have now signed agreements with a number of Tour Operators who can sell vacations to the resort. Most of these Tour Operators are based in Europe and Canada, but due to the time lag in operators publishing their brochures and websites, we expect the main impact to be felt from the 2008/2009 ski season.

Humber Valley Resort's occupancy in 2007 rose by 18% over 2006 resulting in an increase in operational revenues in local currency of 16%. The first three months of 2008 showed further progress. Going forward, we are looking for further suitable agents for the North American markets and focussing on the conversion of vacation leads and enquiries into real bookings as well as enhancing our web based sales and marketing strategy.

Our current owners at Humber Valley are our best marketing avenue and we have been talking with many of them to see how we can improve the operations there. This has resulted in a review of the way the accommodation rental pool is operated to make it more simple and transparent. Priorities have been set for infrastructure capital spending that is required to benefit both owners and vacationers and improve the existing facilities.

As mentioned in my statement last year, we have been addressing the construction issues and although some still remain we did achieve our aim of accelerating the construction program during 2007 and we are making healthy margins on new build. During the year, we carried out significant construction work on over 60 chalets resulting in an increase in revenue in local currency from construction and furnishings of 66% to US$ 21.3 million. We have nearly completed the construction backlog inherited at the time of the Newfound acquisition in 2006 and, subject to suitable funding being in place, it is hoped that all of the remaining outstanding contracts will be started during 2008.

In 2007, the first full year of operation of the 18 hole golf course, we won four prestigious awards including Golf Magazine (golf.com) Best New International Course 2007 and ScoreGolf Magazine's Best Canadian New Golf Course 2007. The credit for this must go to our Golf manager and his team.

We have recently signed an agreement with Monarch Airlines to run a weekly Boeing 757 from Gatwick to Deer Lake to cover both the summer and winter seasons, thus supporting the expected increase in vacation traffic. Although the charter at present makes a financial loss until such time as vacation numbers increase, it is an important part of both the operations at Humber Valley Resort and its future development."

In addition todays annoucement included a new CEO, and a future new Chairman with Jeremy White standing down as Chairman when the right replacement is found.

Jayne McGivern, the former chief executive of Multiplex's UK arm, has taken over as head of a Newfound. McGivern, who left Multiplex in February in the wake of its takeover by Canada-based Brookfield last summer, was this morning appointed CEO of a new management team at Newfound.

Read the full statement - ShareCrazy or Newfoundresorts.com announcements
We're CrazyAboutNewfoundland.com - Are you?

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