Tourism Holdings is better equipped to cope with major global events that may stifle international travel, such as last year's Brexit vote and the election of US President Donald Trump, says chair Rob Campbell.
Speaking to shareholders at today's annual meeting in Auckland, Campbell said the company is operating in a period of significant change on a global scale in politics, society and technology, which demanded the RV operator adapt its business to keep customers' holiday expectations front of mind. Over the past 12 months a devalued British pound after the Brexit vote weighed on youth travel, while Trump's election has seen reduced travel from Europe to the US and tensions on the Korean peninsula have weighed on Japanese and South Korean travel, he said.
"These events - singularly or collectively - have not yet created a material impact on the company, our results and our forecasts, but we have had to adjust in reaction and they have highlighted to us the importance of flexibility and quick reaction in all respects of our business," he said in speech notes published on the stock exchange. "The structural changes we have made in the business have increased diversity of earnings and flexibility, but these are ongoing challenges."
In August, the company reported a 24 per cent gain in annual net profit to $30.2 million, eclipsing the upgraded guidance it had provided. At the time it projected 2018 profit to be between $36m and $39m.
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Chief executive Grant Webster today affirmed that guidance, although he highlighted several areas of uncertainty for the firm, such as currency fluctuations and a tax issue in one of the countries it operates in. He said New Zealand rental business performed well in the first quarter of the year, while the tourism businesses had a slow quarter due to wet weather in Waikato.
Before the meeting, the company acknowledged a new substantial shareholder, with China's Citic Capital building a 7.3 per cent stake in the company.
Campbell told shareholders the company's share price had soared over the past five years, reflecting "the positive approach the team have taken to creating a business that is more flexible, global and disciplined," but also that it needs to keep improving.
"We have delivered a good return for those of you who have invested in the past, however, we have new shareholders every day and we are just as focused on playing the right game to deliver to you for tomorrow," Campbell said. "We will not continue to generate shareholder returns at the rate of increase in recent years, but we are not at a plateau - nor do I accept that this is just the boom period of a repeated historical pattern, as has recently been suggested. THL today is nothing like the business that showed such patterns."
The shares slipped 0.6 percent to $4.78, having climbed 30 per cent so far this year.
Campbell also said the board will start looking for an extra director to strengthen areas where it's lacking, although no announcement is expected until next year.