Tourism Holdings cuts full year profit guidance by a third

Monday, 6 May 2024

Tourism Holdings’ profit after tax over the year to June 30 will be up to $25 million less than expected due to reduced vehicle sales and slower rental bookings, the campervan company says.

In an announcement on Monday, it said that after a review of all divisions, it expects full year profit to be between $50m and $53m.

That was a significant revision down from the company’s earlier guidance, released in February, which forecast its net profit to be around $75m.

The announcement came after the company put a trading halt on its shares on the NZX and the Australian securities exchanges on Friday while it updated its guidance. The halt lifted on Monday morning.

Tourism Holdings, which is the largest provider of campervans for rent and sale in New Zealand and Australia, said the weakening economy had impacted on most regions and business divisions negatively.

That had lowered its earnings expectations into the fourth quarter, it said.

“Vehicle sales have been a major factor globally, with sales volumes and margins now declining more quickly than expected in most markets.”

But over 50% of the overall group’s decline in earnings before interest and taxes could be attributed to the Australian Retail Dealership division, particularly a shortfall in the sales volumes of high-margin ex-fleet vehicles, it said.

“Rental yields have generally met expectations in most markets, but a recent slowdown in forward booking intakes for the Australasian shoulder season will lead to a poorer rental performance than earlier forecasts.”

The company also has interests in the United States, Canada and the UK/Ireland, and said a preliminary review indicated impairment in relation to the UK/Ireland business division was likely as part of the year-end process.

Future rental periods were not expected to be as significantly impacted, with the intake of rental hire days into the 2025 season tracking ahead of the previous year or showing growth in all its markets, it said.

“We consider the current impact to be reflective of current economic conditions which should improve over time. We do not see any signs of a structural change for demand for RVs.”

The company’s expectations for the 2025 financial year were now below the 2023 $77.1m profit, and below the current analyst consensus of about $87m.

But it had retained its goal for $100m net profit after tax in the 2026 financial year, it said.

“We have considered the assumptions underlying our goal and believe the goal remains appropriate based on a positive rental growth outlook and a recovery in the RV sales market globally.”

The company also said its manufacturing and tourism businesses were tracking in line with earlier expectations.

Tourism Holdings owns the Maui, Britz, Mighty, Kea Australia and Motek Vehicle Sales brands. It also operates several tourism businesses in New Zealand, including Waitomo Glowworm Caves and Kiwi Experience.

In 2022, it acquired its largest rival Australia’s Apollo Tourism & Leisure, and became the world's largest commercial RV rental operator.