Tourism Holdings leaves pandemic toll behind

Tourism Holdings chief executive Grant Webster said the tourism scene was feeling positive, even though he wished THL had more vehicles in the country as summer approached. Photo / Getty Images

Tourism Holdings appears to be back on the road to recovery as tourism settles into a new post-pandemic normal and its merger with Apollo Tourism and Leisure bolstered the company’s profit.

The travel and tourism operator reported a statutory net profit (NPAT) of $49.9 million in the 12 months ended June, a change from several years of losses from the lingering impacts of the pandemic.

Total revenue bounced up to $663.8m, a 92 per cent or $318m increase from the 2022 financial year, with tourists having a more enthusiastic appetite for travel and not having to battle border closures.

Earnings before interest and tax (ebit) were $88.9m, up from $6.9m in the previous corresponding period.

Board chair Cathy Quinn said THL had achieved many new milestones in the last financial year, including a listing on the Australian securities exchange (ASX) as a foreign-exempt entity and recommencement of dividends.

“The tourism industry is in a positive position, ready to be a key driver of the economies in New Zealand and Australia in particular over the coming 12 months,” she said.

Chief executive Grant Webster told BusinessDesk that NZ’s tourism scene was feeling positive, but he wished THL had more vehicles in the country as summer approached.

“There’s still being supply chain and shipping issues which have held us back,” he said, adding that NZ’s current fleet of 1,400 vehicles was still sitting around 50 per cent down on pre-Covid.

“We definitely would have had more of the fleet for this summer if we could.”

It had a global fleet of 7,233 vehicles, of which Australia had 2,081 vehicles, the US and Canada had 3,220, and a fleet of 532 in the UK and Europe as of June 30.

Webster was also pleased with the Tourism Holdings and the Apollo Tourism & Leisure transition.

After months of going backward and forwards last year, THL and Apollo were finally been given the go-ahead on their proposed merger by the NZ Commerce Commission.

“It’s intense, there’s no doubt about that,” Webster said about the last nine months since the merger.

“But we are very pleased with the speed of the integration and the quality of the integration. A lot of planning has come to fruition.”

Back to the dividends

Tourism Holdings announced a final dividend of 15 cents per share – 100% imputed, 25 per cent franked – representing the full-year dividend as no interim dividend was paid.

Quinn said the dividend represented about a 42 per cent NPAT payout ratio based on the pro forma underlying NPAT of $77.1m.

Webster told BusinessDesk the company had set a new dividend policy range of 40 per cent to 60 per cent, which was “more reflective” of where the company was today.

“If you go back to pre-Covid, we did have a higher payout ratio, but we’ve got that fleet growth in front of us. So we want to make sure we’re in a positive position for that,” he said.

“We want to make sure that we’ve got the balance sheet in the right place to keep looking at acquisitions.”

Webster added that THL’s previous payout ratio hadn’t been as tax-efficient as it could’ve been.

“What I mean by that is those US Canadian, UK earnings, essentially, if you pay those out as dividends, you’re getting double tax. So we’re better off holding those funds and using them for growth.”

Neither the company nor Webster revealed any earnings outlook for the 2024 financial year, although Tourism Holdings told the market that it was “positive about THL’s opportunity for growth in FY24 and beyond”.

Tourism Holdings intends to provide further guidance on its medium-term growth aspirations at its annual meeting later this year.

Shares in the company shot up 5.2 per cent to $3.65 after the market opened on Tuesday.