Grant Bradley

Aviation, tourism and energy writer for the Business Herald

Tourism Holdings upbeat on profit

Share price jumps on prospects for NZX-listed company.

Tourism Holdings, which runs operations at Waitomo Caves, says strong marketing has brought in more tourists.
Tourism Holdings, which runs operations at Waitomo Caves, says strong marketing has brought in more tourists.

Tourism Holdings' share price jumped 6 per cent yesterday after the company said its profit this year may beat guidance released earlier this year.

The company said it had confidence, based on a review of the non-audited results, that its after tax profit would meet or exceed the forecast released to the market in February.

It said then that it expected its profit to rise to $10.5 million, almost three times its profit for the previous year.

The company's shares closed at $1.19 yesterday after matching its 12-month high of $1.20 earlier in the day.

"At this point in time we are confident of achieving further growth in financial year 2015 and delivering the key objectives set at the 2013 annual meeting," the company said.

"Those objectives included achieving an appropriate rate of return on funds employed in the Australian and New Zealand rentals businesses."

Net debt in the year to June 30 is expected to fall to $90 million, lower than its February forecast of $95 million. Chief executive Grant Webster said the business was performing well across the board and in all the countries in which it operated.

The company has the largest fleet of motor homes for rent and sale in Australia and New Zealand. In the United States it owns and operates the Road Bear RV Rentals and sales brand.

In 2012 it bought rivals United Campervans and KEA Campers to reduce the oversupply of campers.

Within New Zealand it operates Kiwi Experience buses and Waitomo Caves attractions.

It also makes motorhomes through its RV Manufacturing Group joint venture, which has operations in Auckland and Hamilton.

Webster said New Zealand's tourism sector was healthy despite the consistently high New Zealand dollar, which made this country more expensive for overseas visitors.

Strong overseas marketing campaigns had helped reinforce New Zealand's appeal.

"We're punching above our weight and we're definitely seeing more [tourists]. With the dollar being as high for as long as it has, it's reset price expectations in the market."

The growth of consumer confidence in traditional markets, including the United States and Britain, was helping.

Webster said tourist numbers had been further boosted by more air capacity to the United States following the entry of Hawaiian Airlines and more Air New Zealand seats between here and North America.

The company will release its full-year results on August 26.

- NZ Herald

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