Tourism operator Tourism Holdings Ltd (THL) has booked a
turnaround profit for its first-half trading, prompting a
strong forecast for a 175% increase on full-year profit.
THL's revenue for the half year to December rose 4% to $112
million, with earnings before interest and tax (ebit) up $1.9
million to $7.2 million, while its after-tax profit was $2.5
million, a marked improvement on a $500,000 loss a year ago.
THL chairman Rob Campbell said the improved half-year result
set ''a strong base for a dramatically improved full-year
''We're now in a position to forecast a full-year 2014 net
profit after tax of $10.5 million, which will be an increase
of 175% on the prior year [$3.8 million],''Mr Campbell said.
The interim dividend rose from 2c a year ago to 5c. THL
shares rose more than 9.5% to $1.15, following the
Craigs Investment Partners broker Peter McIntyre said THL's
directors were ''bullish'' and showing ''confidence'' in
providing forecasts, which had not been seen for some time.
THL said there were positive results from the New Zealand
rentals business merger, with rental revenue up 18% and
vehicle sales up 60%, with improved tourism group results
being the primary drivers of the improved result.
The Australian business, as previously forecast, traded down
on the previous year - rental revenue down 18% and vehicle
sales down 24% - but was making ''outstanding progress'' on
reducing costs and refocusing the business, with a target to
achieve a 14% return on funds.
The US had strong fleet sales, of 262 vehicles, throughout
the 2013 calendar year, but that limited rental revenue
growth in the US high season to 2%. The joint venture
manufacturing business showed a significant turnaround in
profitability, from a $700,000 loss a year ago to a $700,000
The company's net debt decreased by $37 million to $97
THL's chief executive, Grant Webster, singled out debt
repayment, saying while a portion of the decrease against
guidance was timing, he could now ''confidently forecast'' a
net debt figure for June 2014 of $95 million, a 40% drop
since the New Zealand rentals merger in November 2012.