Tourism Holdings Limited Analysis

Overview

Tourism Holdings Limited is New Zealand's premier tourism company. It is the largest provider of holiday vehicles for rent and sale in Australia and New Zealand under the Maui, Britz, Mighty, KEA Australia and Motek Vehicle Sales brands. In the USA it owns and operates the Road Bear RV Rentals and Sales brand.

Within New Zealand, Tourism Holdings Limited also operatse Kiwi Experience and the Discover Waitomo Group which includes Waitomo Glowworm Caves, Ruakuri Cave, Aranui Cave and The Legendary Black Water Rafting Co.

In 2012 the company entered in a joint venture to form RV Manufacturing Group LP, New Zealand's largest motorhome and specialist vehicle manufacturer. RVMG LP has operations both in Auckland and Hamilton.

Performance

The following information was extracted from Tourism Holdings Limited's full year report, released on 27 August 2024:

FY24 ANNUAL RESULTS

Summary:

• Underlying net profit after tax of $51.8M, within guidance range
• Statutory net profit after tax of $39.4M due to $12.4M impairment of goodwill attributable to UK/Ireland divisions
• Record EBIT results from New Zealand Rentals & Sales, Action Manufacturing and New Zealand Tourism divisions
• Final FY24 dividend of 5 cents per share, 100% imputed and 0% franked, providing a full year FY24 dividend of 9.5 cents per share
• Continued growth in rental fleet to 7,921 vehicles, up 10%
• Group Return on Funds Employed of 10.0%
• Despite operating conditions for the coming period being uncertain, we expect an increase in underlying NPAT in FY25 compared to

FY24

• Prevailing economic conditions make it unrealistic to achieve $100M net profit after tax goal by FY26, however we remain steadfast in

our belief that we have the necessary components and will advance towards our goal as tourism rebounds and general economic

conditions improve

thl today releases its results for the 12 months ending 30 June 2024.

Cathy Quinn, thl Chair, said “There is no doubt that the last six months have been particularly difficult for parts of the business. However, the New Zealand and Australian rental businesses, which had the greatest opportunity to benefit from the merger of thl and Apollo, have each delivered strong profit results and are well positioned for the future.”

Grant Webster, thl CEO, said “Our FY24 results reflect a mixed set of outcomes by business area and geography. The overall underlying NPAT of $51.8 million, while still a significant number, is below what we believe to be achievable for thl and well below the expectations we had some months ago.

“Positively, the New Zealand Rentals & Sales, Action Manufacturing and New Zealand Tourism divisions have all achieved record EBIT results. This success is reflective of the recovery in international tourism to New Zealand as well as the continued growth of Action Manufacturing following several small acquisitions in the past few years.”

Cathy Quinn said “The current environment is uncertain, leading us to the view that the difficult operating environment will continue over the upcoming year. We believe that we are prepared for this uncertainty, with balance sheet strength and renewed financing arrangements that position us well to manage persisting economic pressures.

“We will continue to focus on improving operational performance, cost reduction, primarily on fleet as our largest single investment, and achieving target returns on capital across all our businesses.”