Tourism Holdings boosts profit 81% on wider campervan rental margins

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Tourism Holdings [NZX: THL] boosted its annual profit 81%, slightly ahead of guidance, after strengthening its balance sheet and improving margins.

Profit rose to $20.1 million in the year ended June 30, from $11.1 million a year earlier, the Auckland-based campervan rental company said in a statement. That's ahead of its April guidance of between $19.5 million and $20 million, which was the third time the company had upwardly revised its forecasts. Sales rose 4% to $237 million.

The company has improved earnings across its businesses by selling off excess fleet capacity and focusing on margins. The company is looking to leverage earnings from New Zealand's booming tourism market to fund growth in the international motorhome market. It is also on the hunt for further acquisitions.

"This year represents a turning point for THL," chairman Rob Campbell says.

"We are in a positive economic environment for tourism. It is imperative that we maximise this opportunity, get aggressive about growth and scale this business internationally."

Mr Campbell says the company has the potential to grow profit to $30 million within four years, before it accounts for any acquisition growth.

At balance date the company had lifted cash on hand to $6.5 million, from $3.5 million a year earlier. It reported net debt was $69 million, in line with its April guidance, and down from $79 million in the previous comparable period.

Tourism Holdings' New Zealand rentals business lifted earnings before interest and tax 64% to $12.3 million. Its Australian rentals business improved Ebit 65% to $6.1 million, while its US operations lifted Ebit 17% to $8.9 million.

The company's tourism group, which includes its Waitomo caves business, lifted Ebit 17% to $7.7 million, on the back of strong growth from Asian markets.

The shares last traded at $1.99 and have gained 11% this year.

The board declared a final dividend of 8 cents per share, making the total for the year 15 cps, up from 11 cps in the previous year.

(BusinessDesk)