Top Dunedin tourism attraction the Taieri Gorge Railway is expecting turnover of more than $5 million for the first time this financial year and has marked several record milestones in its performance.
Taieri Gorge, which is 68% owned by the Dunedin City Council and 32% by the Otago Excursion Train Trust (OETT), is expecting to post another "modest" profit this year, but has signalled it will not pay a dividend and will be reinvesting in its $1 million capital expenditure programme.
Chairman John Farry said company turnover this year was running 12% ahead of last year, prompting expectations it will exceed $5 million for the first time, for the trading year to May 30, 2010.
"There is a huge need to continue to develop infrastructure, particularly sleeper replacement and capital expenditure," Mr Farry said.
Four recently restored carriages had been bought into service, two more were nearing completion and five more were programmed to be added during the next three years, he said.
A "vital ingredient" of the company's success were the 120 volunteers who assisted with each of the cruise ship excursions, Mr Farry said.
The operation was now financially "stand-alone", with Mr Farry saying the council had not put funds into the venture since the early 1990s.
Until five years ago, the Community Trust of Otago annually gave about $20,000 to the OETT, which was used for special events, but there had been no contribution since then, Mr Farry said.
"The returns for the past six-months are better than most other tourist operations around New Zealand, on a growth percentage basis," he said, pointing to the 12% increase in turnover and expanding passenger numbers.
He attributed the growth to "word-of-mouth" recommendations around the world and the capacity for ship passengers to step from ship, to wharf, to train for the "magnificent Central Otago journey" and lunch, then to be returned to the ship.
He noted Dunedin was "more than matching Auckland" for its number of cruise ship visits and in spite of the cruise market declining during the recently finished season, the train carried 7.6% more ship passengers than last year to reach a record of 11,265.
"The company is well placed to cater for the large increase in cruise ship visits over the next two years," he said.
Taieri Gorge reported $4.64 million turnover for the year to June 2009, declaring a $14,000 after-tax profit for the trading year.
"We expect a modest, similar, profit for the year, but we have a large capital expenditure programme and will be investing any surpluses into this programme, so will not be paying a dividend," Mr Farry said.
"One-way customers on our daily train are up by over 31% as a result of strong rail trail business and an increase in one-way tour business," Mr Farry said.
