Tourism Holdings Ltd. has reported a 59% net profit increase as its turnaround strategy begins to bear fruit.

The company announced $4.6 million profit boost, as total operating revenues gained 8% to $182 million and shares rose 1.3% to 80 cents.

According to www.scoop.co.nz, THL’s net debt plummeted 37% to $37 million.

Chairman Keith Smith said that THL had demonstrated positive momentum in the past financial year, but needed a higher return on the business’s capital investment.

THL also announced that it will pay shareholders a dividend of 4 cents after omitting its payment in the previous year.

Mr Smith outlined a three step path which the company will embark on to achieve their desired profit levels.

“Transforming the current customer offer, creating new opportunities for growth to leverage the fixed cost base, and adapting the business model to improve the margins on the rentals business.”

Smith also revealed that THL expects to show growth from rental revenue and visitation perspective in 2011 and that it can’t currently provide adequate guidance for the year.

“Current performance and booking trends see a softening of the backpacker and U.K. markets in particular,” he said.

“The strength of the New Zealand and Australian dollars internationally is also contributing to a lower on-the-ground spend once visitors arrive.”

The company announced a 3% increase in revenue for the rentals business, excluding fleet sales was up 3% to $118 million, though it declined by 5% in the second half.