Tourism Holdings lifts profit 38%
Campervan rental company confident of meeting forecast of $27m for the whole year
Tourism Holdings, the campervan rental company, has lifted first-half profit 38 per cent with strong tourist demand in New Zealand and Australia, and says it will at least deliver its forecast annual profit of $27 million.
Net profit rose to $11.3m in the six months ended December 31, 2016, with revenue rising 9 per cent to $146m, the Auckland company said.
The company maintained annual guidance for 2017, but said it would “continue to drive the business to exceed that expectation and treat the $27m as a minimum deliverable”.
Tourism Holdings has set a goal for $50m in profit by 2020, which it says is based on conservative top-line growth expectations. It is forecasting gross capital expenditure of $175m in the full year, and $118m in vehicle sales, with the latter recognising an increase in sales from its US Road Bear operation, flex fleet sales and the inclusion of sales from US campervan rental and sales business El Monte Rents which it bought for $91m effective on January 1.
“We have growth and improvement plans for the existing businesses, a clear action plan for El Monte and clarity on the strategic direction of the company as we continue to build our position as a global leader in the RV industry,” the company said. “There are areas for improvement and we continue to challenge ourselves, stretch ourselves and focus on continuous delivery to publicly declared goals.”
Tourism Holdings said global poli- tical events such as Brexit and the US election had created risks of volatility in consumer confidence or exchange rates, but to date it had not seen a material change in bookings.
In the six months to December, New Zealand rental revenue rose 16 per cent to $49.4m, while tourism revenue advanced 17 per cent to $17.7m. Australian rental sales dipped 0.1 per cent to $36.2m, while US rentals rose 7.3 per cent to $42.5m.
The US rental segment has the highest return on funds employed in the business, posting the biggest net profit of all the segments at $5.6m, while the New Zealand rental segment reported net profit of $2.6m and the Australian segment $3m.
Tourism Holdings said El Monte had started “on track” with its expectations, with no impact on the firsthalf results, and it would report the newcomer separately from its Road Bear operation in its full-year results.
The board declared a 10c a share dividend, with an April 3 record date, payable on April 13. It’s also putting in place a dividend reinvestment plan where shareholders can reinvest their dividends in new shares, based on the five-day, volume-weighted average price after the record date with a 2 per cent discount. Details will be sent out in early March.