Tourism Holdings (THL) says it expects its net loss to be greater than the average of market expectations - $12.8 million for the June 2021 year - due to lower-than-expected domestic travel activity.
THL outlined a strategic plan for the year at its annual meeting on October 30 and said today that the business has been successfully executing to that plan. But the past two months trading indicated domestic demand through January and March would be lower than initially anticipated.
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"While it is not currently possible to provide a credible forecast for the full year 2021 result, based on current expectations, the loss for 2021 is expected to be greater than the average of the results projected by market analysts," the company said.
The average of broker expectations was for a loss of $12.8 million for the year.
Shares in THL dropped by 14c, or 5.5 per cent, to $2.40 on the back of the news.
THL said its focus on balance sheet management had been successful.
Expectations for year-end debt and capital expenditure remained in line with the guidance provided at the annual meeting, which was for capex of $100 -$130m and net debt of $100m.
THL said based on trading in November and early December, domestic demand for travel in the late January to March period was now expected to be lower than originally anticipated.
In Australia, there had been a positive level of rental activity in the short period of time that state Covid-19 border restrictions have been fully lifted.
"This provides confidence that the Australian business will be able to operate profitably in the domestic market, assuming there are no domestic travel restrictions in place."
Vehicle sales to date had been positive with about 100 per cent growth in the number of vehicles sold compared to the corresponding period in the prior year.
It is expected that the positive sales environment will continue for the remainder of 2021.
THL is the largest provider of recreational vehicles (RVs) for rent and sale in Australia and New Zealand, and the second largest in North America.
It is also a joint venture partner in Action Manufacturing LP, New Zealand's largest motorhome and specialist vehicle manufacturer.
THL's net profit came to $27.4m in the June 2020 year.