Tailwinds bring strong result for THL

Tourism Holdings' revenue from US operations, pictured, represented 44% of of the overall group....
Tourism Holdings' revenue from US operations, pictured, represented 44% of of the overall group. Photo: Supplied
Campervan and tourism operator Tourism Holdings has booked a record $22.8million half-year after-tax profit and pushed out expectations for its full-year profit.

The period reflected the benefits of tailwinds for some operations, including a one-off gain following United States tax law changes, the Lions rugby tour in New Zealand last year and outperforming US subsidiaries.

For its half year to December, Tourism Holdings' revenue rose 43% on a year ago to $209million and earnings for interest and tax (ebit) rose 78% to $33.3million. Its $22.8million profit included a one-off $1.8 millionUS tax benefit.

Tourism Holdings lifted the upper end of its full-year profit guidance range by $1million, to between $36million and $40million, excluding one-off items.

Forsyth Barr broker Suzanne Kinnaird said it was a ``strong'' half-year result for Tourism Holdings, ``highlighting very supportive tailwinds in key businesses''.

``Earnings growth will continue into full years 2019 and 2020, driven by the US El Monte synergies in particular, but Australian headwinds may temper those growth rates,'' she cautioned.

She said Tourism Holdings' lower tax rate reflected recent US corporate tax changes, meaning Tourism Holdings was unlikely to pay any US tax during full year 2018, due to the depreciation allowed for capital purchases.

Mrs Kinnaird said US rentals earnings before interest and tax grew 196% to $128.8million, largely from rental business El Monte, but the Road Bear rental contribution declined by 3%, she said.

Tourism Holdings chairman Rob Campbell said it was pleasing to see most of the core businesses continue to improve, including El Monte outperform expectations.

El Monte contributed $29million revenue and $15million from vehicle sale revenues and its ebit was expected to be $US6.6 million, but came in at $US7.2 million.

One new development highlighted by management was a joint venture with Thor Industries, the world's largest recreational vehicle manufacturer, to develop a global digital platform for the industry, which would incorporate Tourism Holdings' existing online planner, Roadtrippers.

``The new joint venture with Thor Industries will only enhance the prospects of Tourism Holdings,'' he said.

Net debt at present was $178million, below the forecast $200million level.

Craigs Investment Partners broker Peter McIntyre also noted Tourism Holdings ``had produced another strong result'', making the most of increasing global tourism, especially into New Zealand.

However, he noted there would be some uncertainty for second-half trading as the US-based El Monte went into the tourism shoulder season and operating costs incurred from the new joint venture with Thor Industries.

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