thl strategic decisions delivering results

New Zealand’s leading tourism group Tourism Holdings Limited (thl) (NZX:THL.NZ - News) today declared the 2012 merger of its New Zealand rental business with United Campervans and KEA Campers a success as it reported full-year earnings in line with market guidance.

thl also announced the Board has elected Rob Campbell as chairman, effective 29 August 2013. Mr Campbell replaces Keith Smith, who signalled at last year’s annual meeting he would step down once integration of New Zealand rentals, KEA and United businesses was complete. Mr Smith will retire from the board at the conclusion of this year’s annual meeting in November.

Outgoing chairman Keith Smith said: "The merger with United and KEA has delivered on its objectives to position thl for the challenging market conditions it faces. 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."

"thl is a much stronger company as a result. The rationalisation 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."

"Our balance sheet is strong and the New Zealand rentals business’ returns on funds employed (ROFE) - as measured by the ratio of operating profit before interest and tax (EBIT) to the net value of assets - has improved compared to FY2012 (excluding the RWC one off benefit). ROFE is a key measure for thl as it shows the returns we are delivering on the capital provided by our lenders and shareholders."

Incoming chairman Rob Campbell said: "We are optimistic about the year ahead and I am looking forward to leading the company in its next phase of development."

"Motorhome bookings for the New Zealand summer season are shaping up well. Our US 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 programmes are positioning it for the future."

"The immediate task ahead of the business is to improve earnings further to levels which are commensurate with asset value and trading potential. The board and management are committed to this continuing process."

"Reflecting the board’s confidence in thl’s outlook, directors have declared a final dividend of 2 cents per share taking total dividends for the year to 4 cents per share which is the same as last year. This pay-out continues a consistent record of pay-outs since dividends recommenced in March 2012."

thl Chief Executive Grant Webster said: "It is pleasing to be able to report the significant and bold strategic decisions made over the past two and half years of entering the US and the NZ Rentals merger are delivering the expected results."

Revenue from continuing operations in the 12 months to 30 June 2013 grew 12% to $225 million from $200 million in the prior year. EBIT decreased 10% from $16.3 million to $14.6 million, while net profit after tax from continuing operations fell 16% to $3.8 million.

Mr Webster added: "The results for the 2013 financial year are not directly comparable to the prior year due to a number of one-off factors. Notably, the group result includes a $4.5 million EBIT contribution from KEA Campers and United Campervans and $1.4 million of merger costs. The prior year benefitted from an estimated one-off $4.5 million EBIT contribution from the Rugby World Cup."

"We have also faced very challenging trading conditions in Australia. Demand is still weak due to the combination of continuing economic difficulties in core European markets and a relatively high Australian dollar during the financial year under review."

"thl has delivered a very credible result. We are bearing up to the challenging market conditions we face and continue to take action to position the business for the future and notably building ROFE and finding new ways to leverage the current infrastructure."

"We are looking forward to reporting on our progress at the annual meeting in November."