THL slashes profit guidance

Tourism Holdings Ltd (THL) has cut guidance for its net profit after tax (npat) for the 2024 financial year to between $50 million and $53m, down from the $75m forecast it made in February this year.

The company says one of the reasons behind the revised guidance, which follows a review of all divisions, is that vehicle sales volumes and margins are declining quicker than expected in most markets.

“Over 50 per cent of the overall group earnings before interest and tax (ebit) decline is attributable to the Australian retail dealership division and in particular, a shortfall in the sales volumes of high-margin ex-fleet vehicles,” it explains.

“Rental yields have generally met expectations in most markets, however, a recent slowdown in forward booking intakes for the Australasian shoulder season will lead to a poorer rental performance than earlier forecasts in the remainder of FY24.”

THL’s update to the NZX on May 6 also notes the weakening economy has impacted most regions and business divisions negatively and lowered expectations into the fourth quarter of the financial year.

A presentation to investors shows ebit for the retail and rentals Australia division is expected to be $17.9m lower than projected