Tourism Holdings shares soar
Shares in Tourism Holdings Ltd shot to a multi-year high after the campervan rental company announced a much stronger annual result.
THL yesterday reported a strongly improved net profit of $11.1 million for the year to June 30, up from $3.8m in the 2013 financial year.
THL has forecast it will deliver a net profit of at least $15m for the year to June 30, 2015. "The increase in profitability is expected to primarily come from New Zealand and Australia rentals businesses and general cost reductions," chief executive Grant Webster said.
Shares in THL closed yesterday up 11 cents at $1.38, their highest level since the first quarter of 2009.
The international visitor industry was hit by a fall in leisure travelling as a result of the global financial crisis from 2008 but is now well in recovery mode.
Chief executive Grant Webster said he was encouraged that the turnaround in profitability had been driven by both revenue growth in most business units, and cost reductions. THL's total operating revenue of $225.6m was up 0.4 per cent from 2013.
"We know in New Zealand that we need to ensure peak season demand exceeds supply and we will be continuing to down-size the fleet marginally over the coming year to around 1850 vehicles."
In New Zealand THL did not expect double-digit customer growth for the 2014-15 summer, having experienced a very strong peak season in 2013-14.
But the New Zealand rental business was still growing revenues, Webster said. "It's a bit hard to say where it will end up. All the indications from Tourism New Zealand, Air New Zealand and so forth are for growth. We've got no reason to believe that's not the case."
This followed on from a period of consolidation dating back to when too many campervans were being built in this country.
Analysts said the company had performed better after buying New Zealand competitors KEA Campers and United Campervans a couple of years ago, to help reduce total campervan numbers.
THL's United States business had begun its summer season on budget, and the general recreational vehicle (RV) market in North America was returning to pre GFC performance with further growth expected.
The New Zealand rentals business improved earnings before interest and tax 35 per cent to $7.4m out of a group EBIT of $18.8m. However, this performance was "unacceptable given the funds employed in the business".