Tourism Holdings driving up its profits
Campervan company Tourism Holdings said it would step up its investment after reporting a 24 per cent lift in its normalised net profit to record $37.2 million for the June year.
Chief executive Grant Webster, said it was a complex result with one-off gains, US tax changes, the effects of the first full year of El Monte and exchange rate movement impacts.
“The EBIT improvement of 33 per cent in the prior corresponding year represents a great growth rate. However, we still had opportunities and have an intense focus on addressing New Zealand vehicle sales shortfalls in the first quarter of 2019,” he said in a statement.
Webster said a $24.3m noncash gain arose from the contribution of assets to TH2, a global digital platform for the recreational vehicle (RV) industry which it owns jointly with Thor Industries, the largest RV manufacturer in North America. The accounting move was in recognition of value that was present in TH2 but “not recognised fully” by the market.
Webster said the creation of TH2 was the highlight of the year, given the potential of this business.
“We have made the decision to invest in this business in 2019 to create an even better product and to develop the market faster,” he said.
Chairman Rob Campbell said the company’s goal of reaching a net profit of $50m had not materially changed.
“We are now embarking on a major step change. We are in the midst of reallocating financial and intellectual capital to global growth.
“Our core values are unchanged and we respect our heritage, but we are no longer simply a New Zealand story,” he said.
“We intend making this transition while maintaining a positive income distribution policy, but the focus is on global growth, which requires reinvestment, and there will be times of consolidation to create and execute on the global platform.
“THL has substantive global opportunity in this context and this is the next chapter in our story,” he said.
The company is the largest provider of RVs for rent and sale in Australia and New Zealand, and the second largest in North America.
In the US, Tourism Holdings owns and operates the Road Bear RV Rentals & Sales brand and El Monte RV Rentals & Sales.
Tourism Holding’s share price dropped by 22c to $5.93 in the wake of the result, just before trading stopped due to a technical fault on the NZX.
Analsyts said the result was strong but not good as market expectations due to higherthan-expected rates of depreciation and amortisation.
Daniel Kieser, managing director at Shareclarity, at said it appeared Tourism Holdings was on the lookout for acquisitions.
“The trick will be to buy right, because a lot of the companies in the tourism sector are expensive right now,” he said.
The company declared a final dividend of 14 cents, taking the full year dividend to 27cps — up 29 per cent on the previous year’s.