Tourism Holdings Ltd's revenue rose 15% in first half trading to deliver a turnaround result for the period, a $1.4 million after-tax profit compared with a $300,000 loss a year ago.
However, the campervan manufacturer, fleet owner and tourism operator has forecast its second-half results may yet be affected by a decline in international visitor numbers and earnings.
Interest and tax gains - from a loss last year of $4.4 million to a profit of $3.1 million - are expected to be weaker in the second half of this year.
Revenue was up 15% from $80 million to $92 million, including an $8 million increase in fleet sale revenue, while cashflow at $17 million was up 160%.
THL chairman Keith Smith said a $A40 million investment in Australian growth for this year had begun, an increase of $A27 million on earlier plans.
Rentals revenue, excluding fleet sales, was up 11%.
The improved result reflected a turnaround for THL's campervan manufacturing, which should return to profitability in 2011, and THL's tourism businesses, including the Waitomo caves and Kiwi Experience, which had continued to perform well following two years of cost-reductions,Mr Smith said.
Craigs Investment Partners broker Peter McIntyre said THL had refocused its business during the past three years "to get back on track", the result signalling dividend reinstatement, growth in Australia and curbing costs.
Forsyth Barr broker Peter Young said the $1.4 million profit, $1.5 million better than expected, signalled "the first leg of profit improvement".
"The worst is behind THL.
"This is demonstrated by its decision to increase investment in the Australian rentals fleet by $27 million," he said.
"The big surprise was the resumption of an interim dividend of 2c per share, and the guidance of a final dividend of 2c if it achieves a full-year after-tax profit of between $3 million and $4.5 million," Mr Young said.
He said Australian rentals revenue growth was "outpacing" the "sluggish" New Zealand rentals operation, prompting THL to commit to increasing the Australian fleet.
Mr Smith said, "We have indicated previously that our expectations for the second half of the financial year are for an ongoing reduction in international visitor demand in line with Australian and New Zealand national tourism forecasts," signalling second-half earnings before interest and tax would not match the first-half results.
