Tourism Holdings sees 10% lift in 2016 profit

Tourism Holdings sees 10% lift in 2016 profit

By Paul McBeth

Nov. 23 (BusinessDesk) - Tourism Holdings, the campervan rental company, expects to lift profit 10 percent in the 2016 financial year, and is weighing up potential acquisitions globally and in the broader tourism industry.

The Auckland-based company forecasts net profit of some $22 million in the year ending June 30, 2016, up from $20.1 million in 2015, chairman Rob Campbell told shareholders at today's annual meeting. That's after an extra $2 million being spent on building future value, which will come under greater board scrutiny after a strategic review this year found Tourism Holdings had scope to make some acquisitions.

"Overall the business is in a positive macro environment. Global tourism is in a positive position with a strong outlook," Campbell said in speech notes provided to the NZX. "Careful allocation of capital and efficient operation of our business will enable THL to take advantage of this."

In August, the company said it was targeting annual profit of $30 million by 2019 from its existing businesses, and would use its flexible balance sheet to make value-adding acquisitions.

Chief executive Grant Webster told shareholders that management were still looking for acquisitions "globally" and "within the broader tourism industry", but hadn't settled on any purchases.

This month, Tourism Holdings soft launched its Mighway business, which providers private owners of RVs to rent their vehicles to customers around the world. Webster said the Mighway business was an acknowledgement that Tourism Holdings' existing business model is capital intensive, that the sharing economy is developing, and that the company needs to be prepared for new technology to potentially disrupt its operations.

The shares rose 1.3 percent to $2.33, and have climbed 28 percent this year, outperforming the 3.5 percent increase in the S&P/NZX All Index over the same period.

(BusinessDesk)

© Scoop Media