Tourism Holdings has reported a net profit of $3.8 million, following the successful 2012 merger of its New Zealand rental business with United Campervans and KEA Campers. Revenue from continuing operations in the 12 months to June 30 grew 12% to $225 million from $200 million in the prior year.
According to a report by Stuff.co.nz, the RV rental and tourism operator last year posted a net profit of $4.3 million for the 12 months to June 2012.
THL also announced Rob Campbell had been elected as chairman, effective Aug. 29, 2013. Campbell replaces Keith Smith, who signaled at last year’s annual meeting he would step down once integration of New Zealand rentals, KEA and United businesses was complete. Smith will retire from the board at the conclusion of this year’s annual meeting in November.
Smith said the merger with United and KEA had delivered on its objectives to position THL for the challenging market conditions it faced.
“It has linked our highly competitive international sales and service infrastructure with high-quality brands servicing complementary market segments, and is allowing the orderly reduction of the New Zealand motorhome fleet,” he said. “THL is a much stronger company as a result. The rationalization of the New Zealand rental fleet is on track. We have consolidated the three businesses’ back-office operations and service centres, and the capital invested in the business.”
Campbell said he was optimistic about the year ahead and looking forward to leading the company in its next phase of development.
“Motorhome bookings for the New Zealand summer season are shaping up well,” he said. “Our U.S. operation, now in the midst of its high season, continues to deliver excellent results and the New Zealand tourism operations including Kiwi Experience and Waitomo Caves are performing steadily. Our Australian business faces tough trading conditions, but restructuring programs are positioning it for the future.”
THL declared a final dividend of 2 cents a share taking total dividends for the year to 4 cents a share, the same as the previous financial year.
THL chief executive Grant Webster said strategic decisions made over the past two and half years to enter the United States market plus the New Zealand rentals merger were delivering the expected results.
In an effort to improve its results from the “financially unacceptable” year it had to June, Auckland, New Zealand-based motorhome rental and tourist attraction operator Tourism Holdings is looking at new ways to improve business.
According to Stuffco.nz, the company, which operates Waitomo Glowworm Caves and several motorhome brands in Australia, New Zealand and the United States, plans to reduce the number of vehicles it owns.
It is also creating new marketing campaigns targeting Asian tourists and is considering reducing the number of brands in its campervan portfolio.
Tourism Holdings earlier reported a $27 million net loss after tax for the year to June compared with a $5 million profit a year earlier.
At its annual meeting in Auckland, CEO Grant Webster said having too many vehicles on its books here and was one of the main reasons for the company’s poor performance for the year to June. It had ambitiously increased its fleet in November 2009 when bookings indicated business would be strong, but performance turned out to be flat. It hopes to sell at least 5% of its fleet in the financial year, ending June 2012.
“The difference is depreciation where the increase was the biggest impact to the result … more larger vehicles which obviously cost more and excess fleet to requirements have been the driver of the increased depreciation costs,” Webster said. “Depreciation for Tourism Holdings is a real cost and reflects the need to rotate fleet just as a retailer rotates stock.”
In the year ahead, it is reviewing the campervan brands in its portfolio. Those brands in New Zealand are higher end Maui, family brand Britz, Back Packer and Explore More. Stuffco.nz that the Explore More brand, targeted at youth, has been struggling the most.
“We will review our Backpacker and Explore More brands over the next year … They may be consolidated,” Webster said.
The company has created some new marketing initiatives to boost business, including school holiday tours of the Waitomo Glowworm Caves for children, and its bus tour group Kiwi Experience is soon to launch a new package for the Asian market in New Zealand.
It is also looking at ways to increase the popularity of its motorhome rentals with Asian markets both in New Zealand and in Australia.
The board announced that it would resume paying dividends and will confirm at the half-year results a 2-cents-a-share payout next April.
Chairman Keith Smith said results for the first half of the financial year were likely to exceed by $1 million its forecast earnings before interest and tax of $9.2 million.
New Zealand-based motorhome rentals operator Tourism Holdings (THL) is recommending shareholders reject a partial takeover offer from Kiwi limited partnership Ballylinch.
According to Stuff.co.com, Wellington, THL said in a target company statement released to the NZX that the offer price to acquire 40.85% of shares Ballylinch does not already own is materially below the fair value range determined by an independent adviser’s report.
The report’s author, Simmons Corporate Finance, said there is no compelling reason to accept the offer and the offer price is below the current market price.
The offer, if successful, would give Ballylinch a controlling ownership of between 50.01% and 52.20% of ordinary shares. It currently holds 19.14% of THL shares.
THL said the offer comes at a time when its performance has been affected by the global financial crisis, the persistently high New Zealand and Australia currencies and a series of natural disasters in both countries which have affected global tourism flows.
The group also said that while John Grace, sole director of the limited partnership’s general partner Ballylinch General (BGL), was a long-standing and supportive shareholder of THL, the board is ”unaware of any further specialist experience or expertise” that Ballylinch LP brings to the company.
THL has a number of leading brands including Maui, Britz, Kiwi Experience and the Waitomo Glowworm Caves.
Ballylinch is wholly owned by Scanhard Trustee Company ()STCL) which is controlled by two Hastings’ lawyers.
New Zealand-based Tourism Holdings is boosting its earnings forecast after better-than-expected United States vehicle sales and improved rentals following the Christchurch earthquake.
The New Zealand Herald reported that the tourism operator – which is the target of a takeover attempt – upgraded its forecast operating earnings before interest and tax (ebit) for the year ending June 30 to $4 million from break-even. Its operating loss after tax is now put at $1.4 million, compared with a previously expected $4 million loss.
Tourism Holdings’ assets include car and motorhome rentals in Australia, New Zealand and the U.S., Waitomo Glowworm Caves, motorhome manufacturing in Hamilton and Kiwi Experience backpacker transport.
The improved outlook included better-than-expected vehicle sales volumes and margins in the U.S., which would result in a small earnings gain for the six months ending June 30 for the Road Bear RV Rentals and Sales business bought last year.
New Zealand rentals improved primarily because of motorhome use after the earthquake in February.
Costs had also improved compared to the previous forecast.
Tourism Holdings forecast earnings for the 2012 financial year of about $17 million, with net profit after tax of $6 million.
Chief executive Grant Webster said: “We’re happy that that’s a good step forward from where we are and it’s a realistic step forward and then we’ll be looking for further gains the following year.”
Tourism Holdings (thl) today (Dec. 3) announced it has entered into an agreement to purchase JJ Motorcars Inc. which trades as Road Bear, an RV rentals business based in Los Angeles, according to voxy.co.nz.
Road Bear currently operates a fleet of between 350 and 450 rental vehicles from five branches located in tourism gateways – Los Angeles, San Francisco, Denver, Las Vegas and New York.
The business operates a similar model to thl’s rentals businesses in New Zealand and Australia. The acquisition is expected to be completed on Dec. 31 for $5 million goodwill plus approximately $12 million to fund RVs acquired.
The purchase will be fully debt-funded.
The Road Bear business is expected to contribute $2.1 million pre-tax to thl’s result over the first 12 months of ownership.
thl Chairman Keith Smith said Road Bear was expected to provide returns at least equal to thl’s cost of capital from the first year of ownership.
FY2011 NPAT for the existing thl businesses remains in line with the previous guidance of $4 million provided at the annual meeting.
Recent accounting standard changes now require all costs associated with the acquisition to be expensed rather than capitalized into the purchase price. These non-deductible one-off expenses will be circa $1 million in the FY2011.
The combined impact of the acquisition costs, low season Road Bear trading and incremental interest totals $1.5 million after tax, and therefore the total thl FY2011 NPAT guidance is now $2.5 million.
The 2012 financial year will reflect the full benefit of the acquisition.
“This is a significant milestone in thl’s change of direction over this period, in which we have transformed from a tourism business with diverse assets in attractions, coaching and rentals, to a leaner operation focused strongly on rentals,” Smith said.
“Our existing rentals business has by far the largest footprint in its home markets, along with a proven business model. Road Bear provides an ideal opportunity to establish a beachhead in the U.S.A., based on an operation that is profitable, a good fit with our existing business and has strong potential for expansion in the largest RV market in the world.”
Daniel Schneider and Horst Hagner will remain with Road Bear as employees for an agreed period after the completion of the purchase by thl.
Daniel will remain as CEO and president of the business for the medium term, whilst Horst will transition from the business throughout FY2011.
thl CEO Grant Webster said: “We know the successful performance of Road Bear in the industry, having conducted extensive in-house and external research on the U.S.A. rentals market.”
“The U.S.A. market is very large – there are reported to be 8.2 million owners of caravans and RVs or motorhomes and an estimated 6,000 – 8,000 such vehicles are available for rental in the peak season of June through September,” Webster said. “The business we are buying is small in that context, but has a strong market position with a premium offering.”
“As Road Bear is an existing profitable business, the success of the acquisition will not be dependent on synergies with the existing thl business – although we believe there are potential opportunities in online marketing and bookings, trade relationships and core support services,” he said.
“Road Bear is very similar to the thl rentals businesses, being based on the purchase, rental and then sale of motorhomes timed to align with variations in rental demand. Its customer base is primarily in Germany, Switzerland and the Netherlands, which are core markets for our existing businesses in New Zealand and Australia,” he said. “Road Bear is strongly located for tourism flows and, given relatively short turnaround for both purchase and sale of vehicles, is highly flexible to cyclical and seasonal demand variations.”
Road Bear has been in business since 1980 and under its current ownership for 10 years.