Tourism Holdings returns to profit
Campervan rental company Tourism Holdings says a return to profitability in its first-half result sets a strong base for a "dramatically improved" annual result.
The tourism company (THL) today reported a $2.5 million net profit for the six months to December 31, a turnaround from last year's after-tax operating loss of $500,000 in the first half.
A net profit of $10.5m was forecast for the year to June 30, 2014, the company said in a statement.
New Zealand campervan rentals were in the middle of a busy high season and in line with the company's growth expectations, it said.
The Australian campervans business had more stable forward bookings and was on track with further cost reductions.
The forward book for the upcoming United States high season rentals was strong and the group's tourism businesses high season was on track.
THL chairman Rob Campbell said the forecast fiscal year net profit of $10.5m would be an increase of 175 per cent on the prior year.
"The business is well on track with its transformation and a decisive focus on achieving appropriate returns for shareholders," he said.
"The 175 per cent expected increase in net profit after tax over FY13 reflects the recent actions undertaken and a positive operating leverage within THL."
"The board are very positive given the turnaround of the business, and whilst remaining tight on capital expenditure will commence development of the next growth strategies over the coming months to enable continued growth in net profit after tax, return on net funds employed and dividends paid in FY15."
A 5 cents a share fully imputed interim dividend should also be seen by all as a positive indication of our progress and commitment to those targets, Campbell said.
THL chief executive Grant Webster said all parts of the business had growth planned for the full year to June 30 and were performing in line with those plans.
"Significantly, the approach to rectifying the Australian result is working and we remain confident in achieving an appropriate return on capital over the next 18 months," Webster said.
The company had a net debt of $97m at December 31, he said.
"Whilst a portion of the decrease against guidance is timing, we can also now confidently forecast a net debt figure for June 2014 of $95m, a drop of 40 per cent since the New Zealand rentals merger in November 2012," he said.
"This forecast net debt figure is after the payment of $5.6m to shareholders through the interim dividend to be paid in April 2014."
Revenue of $112m for the half represented an increase of 4 per cent on the previous corresponding period.