Tough half-year brings Tourism Holdings loss

Tourism Holdings has significantly reduced debt after a disastrous year for tourism companies, but is likely to seek further funding as it invests in new vehicles.

The company posted a net loss after tax of $1.77 million for the six months ending December 31 and an underlying net loss of $3m, down from a profit of $13.1m for the same period last year.

Total revenue fell 1 per cent to $205.8m, driven by growth in vehicle sales.

Tourism Holdings said it cut net debt to $22m in the period, a reduction of about $106m in the first half of the 2021 financial year and $175m since March 24, 2020.

The company said it was difficult to provide guidance for the second half, but it expected to make a full-year loss. Chief executive Grant Webster warned that net debt would increase in the remainder of the financial year as it invested in new vehicles following record sales of rentals.

Webster said the company was confident it could sell more vehicles in the months ahead.

In its first half-year, Tourism Holdings acquired the remaining 50 per cent stake in specialist vehicle manufacturer Action Manufacturing. The acquisition is expected to be complete by the end of March and is worth $9m, which will be funded by THL issuing 3.2 million ordinary shares at $2.30 per share to Alpine Bird Manufacturing, with the remaining $1.5m paid in cash.

Tourism Holdings shares closed yesterday at $2.25, down about 12 per cent over the past 12 months.