‘Record volumes and margins’
Tourism Holdings Ltd (THL) has plenty of headroom to buy about 2,500 vehicles with ANZ and Westpac committing about $200 million in lending.
Chief executive Grant Webster told shareholders at the company’s annual general meeting last month that the company is targeting Australia and the US to get back to pre-Covid fleet levels at some point during the 2023 financial year.
“New Zealand fleet regrowth is more uncertain but will likely take longer than that,” adds Webster, pictured.
Rob Campbell, THL’s chairman, had earlier told the meeting the company sees no structural reason why it cannot achieve the net profit after tax target of $50m it disclosed to the market in 2017. This was achievable within two years of the global tourism market operating in a pre-Covid manner, he had said.
Webster explained: “We could potentially achieve that goal with less capital employed than would have been required pre-Covid given the improved low-capital businesses and lower cost base. That, however, is the future.”
No profit guidance was given for the current financial year at the AGM with a loss remaining the expectation and 2022’s first half tracking down on 2021 because of delta variant’s impact across Australasia, lower rentals in the US and less government support globally.
Webster did provide one bit of guidance, however, by revising expected net capital expenditure down to between $25m and $60m in 2022.
The company, the largest provider and manufacturer of rental RVs in Australasia with motorhome concerns in the UK and US, recorded a decrease in revenue of $359, or 10 per cent, to the year ending June 30, 2021. That resulted in a $14.5m loss, down 153 per cent from last year's $27.4m profit.
The 2021 year was described as THL’s “largest operating loss on record” by Webster at the AGM, reports the NBR, but the company is of the view that it minimised the loss well.
With Covid-19 having shut borders around the world, the company has shifted its focus to vehicle sales.
Campbell said while some RV demand is one-off by nature, research shows there is structural growth in RV sales, and a greater proportion of younger buyers and families are choosing that method of travel.
In New Zealand, rental sales rose to $101m in 2021 from $45.9m in 2020, while in Australia they increased to $31m from $16.8m.
“We have sold over 2,900 RVs… and have made the most of the increase in demand combined with automotive supply issues to deliver record volumes and margins in each country,” Campbell told shareholders.
