Tourism Holdings profit rises
NEW Zealand’s booming tourism market and offshore acquisitions by Tourism Holdings has buoyed its halfyear result, its more than $11 million profit up almost 40% on a year ago.
Revenue for the six months to December was up 9% to
$146 million, operating profit before tax rose 29% to
$17.7 million and aftertax profit gained 38% on a year ago, at $11.3 million.
On the back of the strong result, Tourism Holdings yesterday restated its aim to deliver an aftertax profit of
$50 million on fullyear 2020, and maintained its fullyear 2017 profit guidance of $27.5 million.
Chairman Rob Campbell said the company had continued to deliver profits, dividend growth and return on funds employed, which included acquisitions announced last December that would provide another ‘‘positive leap’’ for Tourism Holdings.
The December acquisitions included the $91 million paid for El Monte Rents Inc, the US’ second largest RV rental business, expansion of the Mighway booking service platform into North America and several transactions with Roadtrippers USA.
Tourism Holdings shares were up slightly at $3.90 following the announcement.
Craigs Investment Partners broker Peter McIntyre said it was a ‘‘strong result from Tourism Holdings, again’’, and both its New Zealand van rentals and tourism ventures were ‘‘particularly strong’’.
The underlying earnings before interest, tax, depreciation and amortisation (ebitda) of rentals were 62% and tourism operations was up 25%.
Mr McIntyre noted earnings before interest and tax were up more than 12% on a year ago and would have been higher, but for ‘‘negative currency headwinds’’, which affected Australian and US operations.
Net debt rose $13 million to $103 million, and when El Monte’s debt was posted in the second half trading, it was expected to be about
$190 million$200 million, Mr McIntyre said.
Forsyth Barr broker Damian Foster said the result was characterised by strong profit growth in New Zealand, during the seasonally weaker part of the year, plus some progress in Australia.
‘‘Tourism Holdings is enjoying industry tailwinds in New Zealand and to a lesser extent in Australia,’’ Mr Foster said.
Chairman Mr Campbell said the El Monte purchase, launch of a pilot of Mighway and investment in road trip app Roadtrippers USA would ‘‘reset the expectations’’ of Tourism Holdings for the next three years.
‘‘With El Monte we have gained a significant infrastructure base, market share position and experience that . . . will deliver superior results,’’ he said.
While reiterating earlier financial guidance of expecting to book a $27 million profit for the full year, Mr Campbell was treating that figure as a ‘‘minimum deliverable’’, with results to date supporting his prediction.