Tourism Holdings looking to $17m full-year profit

Tourism Holdings is benefiting from management changes. Photo supplied.
Tourism Holdings is benefiting from management changes. Photo supplied.
New Zealand and Australia's largest camper van operator, Tourism Holdings, more than doubled its half-year profit and forecasts expectations of booking at least a $17 million profit for the full year.

The half-year result to December was supported by a planned reduction in camper van fleet sizes and sales, increasing tourism demand, especially from US and Chinese visitors and management focus on profit margins.

Total operating revenues were down 2% to $109.7 million, earnings before interest and tax (ebit) grew from $7.2 million to $10.6 million, and after-tax profit grew from $2.5 million a year ago to $5.6 million.

Tourism Holding's chairman Rob Campbell confirmed the company anticipated an after-tax profit for the full year of ''at least $17 million''.

Craigs Investment Partners broker Peter McIntyre said key drivers of the result were low fuel costs around the world, which also encouraged air transport, and a strong tailwind from New Zealand's domestic economy.

He described earlier years of management and results as ''lacklustre and shocking'', but there had now been a ''major turnaround'' in management.

''This very strong result is confirmation management are doing a really good job. For so long that has been problematic for the company,'' he said.

He highlighted the rejection of MSF Living and Leisure's takeover, offered at $2.80 per share in 2007. Within two years its shares had slumped to trade around 41c.

Tourism Holding's shares were up just 1c at $1.88 yesterday after the announcement, but Mr McIntyre predicted the improved management strategy would prompt brokers to consider a positive rerating of the company.

Tourism Holdings increased its dividend, from 5c a year ago to 7c yesterday.

Chief executive Grant Webster said the company was operating in a ''positive tourism environment'' and had addressed ''the core operating issues within the business''.

simon.hartley@odt.co.nz

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