Long haul for Tourism Holdings as profit falls by a quarter on back of weak US sales

Friday, 28 February 2020

It's a long road to success for Tourism Holdings' United States businesses.

Tourism Holdings said its after-tax profit dropped by 25 per cent in the six months to the end of December.

The company, which operates the Maui, Britz and Mighty rental brands, and makes and sells recreational vehicles, blamed weak vehicle sales in the United States, as well as the performance of its newly-formed international Togo Group.

But chief executive Grant Webster assured shareholders: 'We have a strong balance sheet and market position.'

The six-month profit drop for Tourism Holdings, which is the largest provider of holiday campervans for rent and sale in Australia, New Zealand and United States, followed a 52 per cent fall in after-tax profits in the full year to the end of June 2019.

Tourism Holdings was doing well in New Zealand and Australia, but was struggling in its US ventures.

* Buyer pulls out of deal to buy Tourism Holdings**

'We have confidence in the future of THL, despite the difficult trading environment in some markets at present,' Webster said.

'The teams globally are intensely focussed on performance and delivery in every aspect of the business,' he said.

Tourism Holdings is listed on the NZX sharemarket, but it has operations in Australia, the United Kingdom, US and Australia.

Tourism Holdings Limited manages the Waitomo Glowworm Caves.

The global recreational vehicle rentals business was performing well, Webster said, and recreational vehicle sales were 'solid' in Australia and New Zealand.

But vehicle sales in the United States remained a key challenge and focus for the rest of the year.

In the US the company owned and operated both the Road Bear RV Rentals and Sales, and El Monte RV Rentals and Sales brands.

As well as announcing an after-tax profit of $13.1 million for the six months to the end of December, compared to $17.5m in the same period the year before, Tourism Holdings cut the interim dividend it will pay shareholders to just 10 cents per share.

That was 23 per cent lower than the interim dividend announced this time last year.

Togo Group is the company's global technology and RV fleet management operation, which it co-owned with Thor Industries, the largest RV manufacturer in North America.

The aim of Togo Group was to create a technology platform for road-based travel and outdoor tourism which travellers could use to make it easier to own, rent, and maintain recreational vehicles as well as more easily discover, book, and navigate road trips.

Togo Group also leased its services to tourism businesses to enable them to better manage their RV fleets.

Webster told the NZX that Tourism Holdings was reviewing the nature of its investment in Togo Group, which has offices in Chicago, Cincinnati, Auckland, and Melbourne.