Tourism Holdings lifts annual profit forecast, shares rise
Tourism Holdings, the biggest campervan rental company in Australia and New Zealand, said annual profit may rise as much as 44 percent on increased sales and lower costs. The shares rose to a six-year high.
Profit is expected to be between $15 million and $16 million for the year ended June 30, 2015, up from $11.1 million it recorded this year, and up from a previous forecast of $15 million, chairman Rob Campbell told shareholders at their annual meeting in Auckland. The profit growth would follow a 192 percent rise in earnings in the 12 months ended June 30.
The company flagged a potential 6 cents-per-share dividend at the half-year, up from 5 cents per share a year earlier, and will confirm in February. It expects profit to rise 60 percent to $4 million in the six months ending Dec. 31 and plans to reduce debt 12 percent to $85 million.
Tourism Holdings has improved earnings across its business by selling off excess fleet capacity and lifting its profit margins. The company is looking to leverage earnings from New Zealand's booming tourism market to fund growth in the international motor-home market. The company said it expects profit increases in the coming year to be led by growth in its local and Australian rentals businesses, as well as cost cutting.
"The goals set out last year have been achieved, they are a maker on the road, moving Tourism Holdings to a position where the long run returns, regardless of cyclical issues, meet reasonable investor expectations," Campbell said in a statement. "Tourism Holdings is only part of the way through a major change in the nature of its business. The potential for growth in the scope, scale, earnings and shareholder value is exciting."
Tourism Holdings is downsizing its fleet, after buying its New Zealand rivals United Campervans and KEA Campers in 2011 to reduce total campervan numbers and improve margins. The company received $65 million from vehicle sales in 2014 and expects to continue to reduce its Australian and New Zealand fleets in the coming year, generating an expected $50 million to $60 million of sales, while its US fleet is likely to expand.
"It would be fair to say we still have indigestion from the mergers and acquisition over the past couple of years from an operations, brand and product perspective," chief executive Grant Webster said. "We will fix that over the coming year."
Shares of Tourism Holdings rose 4.8 percent to $1.75 and have gained 78 percent since the start of the year.