Campervan company optimistic
Tourism Holdings reported its second straight annual loss as Covid-19 travel restrictions hurt its campervan business. But the company expects to return to profit this year as travel rebounds.
The company, which rents and sells campervans in New Zealand, Australia and the United States, reported a $2.1 million net loss in the year to the end of June, an improvement on the $14.5m loss the previous year.
Tourism Holdings has faced the biggest single challenge in its history as border closures due to Covid-19 wiped out the international travel market that underpins its business.
Chief executive Grant Webster said the past year had two distinct halves.
‘‘The first part of the year saw significant impacts from the Covid-19 Delta wave, travel border restrictions lifting later than initially anticipated, and an increasingly challenging global supply chain,’’ he said. ‘‘The industry is just starting to recover, borders have just opened, and customers are travelling.’’
Revenue fell 4% to $345.8m. The company’s campervan rental income from New Zealand slumped 41% to $18.4m, which is only 19% of its pre-Covid level in 2019.
To bolster its business during the pandemic, Tourism Holdings has been selling more campervans. It sold 9% of its global fleet during the year, reducing its fleet to 3858 vehicles.
It achieved record profit margins on those sales, achieving an average gain on the sale of each vehicle of $29,000. But it expects margins have peaked and will reduce to more normal levels over the coming two years as future sales will be of newer campervans that were bought at higher prices.
It is now positioning the company for growth and expects to expand its fleet by about 20% this year.
Tourism Holdings expects to return to profitability this year as tourism recovers, and said its profit is expected to be within the current range of analyst expectations of $17m to $30.2m.
Still, the company won’t pay a dividend for the past year and said a dividend is unlikely for the coming year. Tourism Holdings last paid a dividend in 2019, and later cancelled its first-half dividend in March 2020 due to uncertainty around the pandemic. Any future dividends have to be approved by the company’s lenders.
The company warned that there was still some uncertainty in the outlook.
‘‘There is clear pent-up demand across the wider global tourism industry and an acceptance from customers to meet the current higher costs of travel in rentals, accommodation and flights, after several years of limited travel optionality,’’ the company said in presentation notes to investors. ‘‘However, it is unclear whether this trend with customers will continue after the initial wave of return travel is undertaken or whether greater travel costs will impact willingness to travel.’’
The company said it was coming from such a low base that it expected to experience ‘‘a significant recovery’’.