Tourism Holdings says US tax benefit helped it beat earnings guidance
By Paul McBeth
Aug. 12 (BusinessDesk) - Tourism Holdings said annual earnings beat its downgraded guidance due to a one-off tax gain in the US.
The rental RV operator said net profit will "comfortably exceed" the top of its $25-$27 million forecast, after its advisers found $1.8 million of tax benefits from its US operations. Excluding the one-off gain, earnings will be at or slightly above the top end of guidance, it said.
"The tax years that the losses were applied to had a higher tax rate than the losses were previously valued at," chair Rob Campbell said in a statement.
Tourism Holdings downgraded its annual earnings guidance twice this financial year, and in June it warned that a potential tax issue in Australia may be more expensive than previously announced.
In May, the company completed a review of its US business after an unacceptable performance in the current financial year. As a result, it started to shrink the fleet and rein in capital spending in an effort to lift return on capital employed.
In June, it said the Australian and New Zealand businesses were meeting expectations and poised to deliver earnings growth for the June year.
Tourism Holdings raised $80 million in June, which included a $30 million placement to Chinese investment house Citic Capital, and will start exploring opportunities in China. The funds were raised to give it more headroom to pursue any bolt-on acquisitions in existing markets and regions where it doesn't yet operate.
The shares closed at $3.91 on Friday, and have dropped 23 percent so far this year, making it the second-worst performer on the S&P/NZX 50 Index over that period ahead of Sky Network Television.
The company will report its full-year result on Aug. 27.