Tourism Holdings’ profit guidance falls 22%

AUCKLAND: Tourism Holdings lowered its fullyear earnings guidance by as much as 22% and said a decisive operation and capital review of its US operations is now under way.

The company, which rents and sells camper vans, expects net profit of $25 million to $28 million for the year to June 30. When reporting firsthalf earnings in February, Tourism Holdings signalled annual profit would be around $32 million.

‘‘The primary reason for the revised guidance is that the vehicle sales market in the USA has continued to deteriorate and THL’s expectations for the financial year are now substantially below previous forecasts,’’ it said. According to the Financial

US auto sales rose last year but Ford and General Motors reported a drop in domestic sales that pointed to a slowdown this year.

Tourism Holdings’ US operations include Road Bear, Britz and El Monte RVs rentals, which it also sells. It is also involved in a 50:50 joint venture with Thor Industries, a motorhome manufacturer in the United States.

The TH2 JV runs the Cosmos digital platform to RV owners and operators, and the Mighway and Roadtrippers businesses.

Earlier this month, TH2 merged its transtasman CamperMate and Roadtrippers businesses with Australia’s Go SeeAustralia and Outdoria to create one entity.

For the six months to December 31, Tourism Holdings posted a 23% decline in profit as the rental RV operator continued to invest in its joint venture with Thor but reiterated its expectation for TH2 to be a ‘‘significant earnings contributor in the future’’. That is one of several strategies underpinning Tourism Holdings’ stated aim of doubling the value of the business in three years.

Performance in the New Zealand and Australian markets remained on track with a solid outlook, Tourism Holdings said.

The company said it would provide an update on the review to the market before the end of May.

The stock last traded at $5.09 and has shed 16% over the past 12 months. — BusinessDesk