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 half year report, released on 25 February 2025:

FY25 INTERIM RESULTS

Summary:

-Underlying net profit after tax of $26.5M, down 33%.(1)

-Statutory net profit after tax of $25.3M, down 36%.

-Group Return on Funds Employed (trailing 12 months) of 8.1%.

-Underlying EBITDA of $113.3M, down 5%.(1)

-Continued recovery in international tourism underpins rental fleet growth of 11% and rental revenue growth of 8%.

-Ongoing vehicle sales challenges result in 4% decrease in sale of goods revenue and lower margins for ex-rental and retail RV sales.

-Interim FY25 dividend of 2.5 cents per share, 100% imputed and 0% franked.

-Progressing cost-out and optimisation initiatives, continued confidence in delivering at least a $12M NPAT benefit in FY27.

-We remain focused on increasing underlying NPAT in FY25, but acknowledge the risks and uncertainty in the coming period.

-Market factors, including a more prolonged downturn in RV sales, may delay our recovery until FY26 and prevent us from delivering underlying NPAT growth in FY25.

-We intend to provide FY25 earnings guidance in the fourth quarter of FY25 when there is more clarity.

thl today releases its results for the six months ending 31 December 2024.

Cathy Quinn, thl Chair, said “the underlying net profit after tax for the period was $26.5M, down $13.2M on the prior corresponding period. The core rental business has grown, with rental revenue increasing by 8% and the rental fleet expanding by 11%. However, the decline reflects the persisting challenges in RV sales.

“This has been a period marked by significant challenges, but also opportunities and improvements. By some measures, this has been the most difficult period for the RV sales industry in decades. We believe that thl has maintained its performance relatively well compared to many counterparts in the RV industry”.

Grant Webster, thl CEO, said “pleasingly, New Zealand Rentals & Sales has gone from strength to strength and grown EBIT. New Zealand increased rental revenue by 25% during a period in which inbound visitor growth was only 6%. The most notable decline has been in our Australian division, mainly due to challenges in the Retail Dealerships, which have seen the greatest impact from the current cycle.

“We have remained active with numerous projects, including the transition to a single digital platform across multiple areas and investments in new properties like Waitomokia in Auckland and Perth in Australia. In Canada we also launched Motek, our bespoke fleet management and booking system. This marks the first time all our rental divisions are operating on the same system globally. We believe that all of this activity, combined with the experience of our leadership team, positions thl well ahead of a recovery.

“We are also pleased with the progress we’re making in our cost reduction and optimisation initiatives and are on track to meet our goal to deliver an NPAT benefit of at least $12M in FY27. We continue to seek out and harvest the benefits from the merger.”