$27.3m loss for Tourism Holdings

Keith Smith
Keith Smith
"Unprecedented" natural disasters and currency volatility during the past year saw listed Tourism Holdings book a 56% decline in earnings before interest and taxation.

A previously announced non-cash goodwill writedown for Tourism Holding's rentals businesses in New Zealand and Australia totalled $26.1 million, meaning its after-tax result was a loss of $27.3 million, compared to an after-tax profit of $4.6 million a year ago.

Chairman Keith Smith said Tourism Holdings' core profitability in its vehicle rental businesses on both sides of the Tasman was hit by the earthquakes in Christchurch, February floods in Queensland, 10% appreciation of the New Zealand and Australian dollars against the euro, the kiwi's 13% appreciation against the pound sterling, and the weakened US dollar making the US a more attractive destination.

"The tourism industry in New Zealand and Australia has had an unprecedented series of impacts on visitation over the past two years and the impact in the last 12 months has been significant," Mr Smith said.

No dividend was declared and Tourism Holdings shares were unmoved at 63c after the announcement.

Tourism Holdings operates holiday rental vehicles in Australia, New Zealand and the United States, with a fleet of 3773. It manufactures campervans at Ci Munro in New Zealand and has tourist operations at the Waitomo Caves.

While net debt increased from $37 million to $99 million, which was $11 million less than earlier forecast, Mr Smith said the debt to debt plus equity ratio remained strong for the industry, at 43%, and all bank ratios were "well within" the required covenants, "with no foreseen concerns over the coming year".

Company revenue was up 7% to $195.8 million, included six months' contribution from Road Bear USA, which was bought last December and provided $15.4 million in revenue and earnings before interest and tax of $300,000.

However, depreciation was $5 million higher than a year earlier, employee costs were up almost $3 million, repairs and maintenance costs were up almost $3 million and and net finance costs rose by $2 million.

Mr Smith went on to reiterate earlier financial guidance for the year ahead, despite the global volatility.

The board was satisfied the forecast profitability and ongoing performance with vehicle sales in all its markets provided enough confidence to maintain a net debt level around $100 million, he said.

Based on the company's capital structure, he forecast earnings before interest, tax, depreciation and amortisation at $64 million, earnings before interest and tax at $17.2 million and after-tax profit at $5.9 million.

 

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