THL doubles profit but major overseas investment looms

Tuesday, 28 August 2018

Tourism operator THL nearly doubled its annual profit as it expanded to become a global company.

Chairman, Rob Campbell said the company had made another record profit from trading of $37.5m, up 24 per cent, on turnover of $426m, up 25 per cent.

Tourism Holdings' US motorhome rental fleet is now close to the size of its New Zealand vehicle numbers.

'We are now embarking on a major change. We are in the midst of reallocating financial and intellectual capital to global growth. Our core values are unchanged and we respect our heritage, but we are no longer simply a New Zealand story.'

'We intend making this transition while maintaining a positive income distribution policy, but the focus is on global growth, which requires reinvestment.'

* US expansion helps Tourism Holdings Ltd to record $30m profit

* Campervan company helps collect freedom camping fines**

The NZX-listed company is the largest provider of vehicles for rent and sale in Australia and New Zealand, and the second largest in North America, through joint ventures.

Profits over the next 12 months will undershoot the performance of 2018, due to investment in the US, even though core business operating earnings will increase.

Chief executive Grant Webster said the latest profit report was 'complex', with one-off gains, US tax changes, the first full year of incorporating results from the company's El Monte rental business in North America, and exchange rate movements.

The creation of the US-based TH2 joint venture would be the highlight of next year, 'given the potential of this business'.

'We will invest around NZ$15m into the business.'

The joint venture was set up in February with Thor Industries, one of the main international rental vehicle manufacturers.

The goal of TH2 was to create a digital platform for rental vehicle owners to improve trip planning and booking, remote monitoring systems, roadside assistance, and campsite rentals.

As part of the joint-venture, the TH2 joint venture will buy Roadtrippers, and THL assets Mighway, CamperMate, and several management technology systems.

'The outlook for the 2019 result is difficult to determine, given the number of activities under way at present. We will provide more guidance at the annual meeting in October,' Webster said.

There were several projects detailed in the report including electric trials, carbon reductions, and community engagement initiatives.

The total net profit after tax of $62m included a $24m one-off non-cash accounting gain from the sale of THL's assets into the US joint venture.

Excluding a special one-off $24 million accounting gain, the after-tax profit was $37m.

The fully imputed final dividend of 14cents a share, taking the full year dividend to 27c a share. Net debt rose to $199m, up $23m.

Within New Zealand, THL operate Kiwi Experience and the Discover Waitomo group, which includes Waitomo Glowworm Caves, Ruakuri Cave, Aranui Cave and The Legendary Black Water Rafting Co.

THL is also a joint venture partner in Action Manufacturing LP, New Zealand's largest motorhome and specialist vehicle manufacturer.