Tourism Holdings Ltd (THL) has booked a 45% gain in after-tax profits for its half-year result, upgraded its full-year profit guidance to $24 million and says it is "on track'' to hit a $30 million profit by 2019.
Increasing numbers of tourists, low fuel costs, airline competition and the weakening New Zealand dollar all contributed to a "strong result'', Craigs Investment Partners broker Peter McIntyre said.
"THL has come a long way, streamlining operations and restructuring, but that's bearing dividends now,'' he said.
THL shares were down almost 2% following the news, trading at $2.49.
Chairman Rob Campbell said last year's strategic review indicated the business would look to grow after-tax profit to $30 million by 2019.
"We remain on track or ahead of that target based on current performance,'' he said yesterday.
Forsyth Barr broker Suzanne Kinnaird said the transformation of THL's operating performance had been "inspirational'', the strong result prompting THL to lift its guidance for full-year profit to $24 million, "The outperformance was driven mainly from THL's US operations, which grew revenue by more than 50% to $39.6 million, $13 million ahead of our forecast, and its operating earnings before interest and tax up by more than 61% to $9.8 million,'' she said.
Also impressive was THL's also having absorbed a step-up in operating costs to reposition its business for growth, estimated at around $1.3 million in the first half.
Mr Campbell said new initiatives were progressing and the business continued to explore acquisition growth options internationally, which would be incremental to the $30 million target.
Chief executive Grant Webster said the profit upgrade to "around $24 million'' reflected the positive operating environment for tourism in New Zealand and overseas.
"The peak season is well under way and operating to plan,'' he said.
From a debt perspective, THL was operating well within its own benchmarks.
"We have changed the manner in which we report fleet capex [capital expenditure] spend to provide improved investor understanding of how we have created more flexibility in the business model,'' he said.
THL said in its outlook, tourism globally remained "high growth'', with New Zealand's short to medium term outlook "positive'' and Australia similar, but not as strong as New Zealand.
Tourism Holdings Ltd
Half-year result to December. -
Total operating revenue: $133.7m, up 20% from $111.4m. Operating profit before tax: $13.7m, up 44% from $9.5m.
Profit after tax: $8.2m up 45% from $5.6m. Dividend, 7.2c, up 44%, from 5c.
• Largest provider of holiday vehicles for rent and sale in Aust and NZ.
• US: Owns and operates Road Bear RV Rentals and Sales brand.
• New Zealand: operates Kiwi Experience and the Discover Waitomo group, including Waitomo Glowworm Caves, Ruakuri Cave, Aranui Cave and The Legendary Black Water Rafting Co.
• 2012 joint venture: RV Manufacturing Group LP, now Action Manufacturing LP, NZ's largest motor home and specialist vehicle manufacturer.
• UK: February 2015, THL acquired 49% of Just Go Motorhome Rentals & Sales. - SOURCE: THL
