Motorhome rental and manufacturing group Tourism Holdings has lifted its profit forecast for the year just ended, only weeks after cutting it, in the middle of a takeover approach from an Australian led consortium. The company told the share market on 23 July that it now expects underlying net profit after tax from continuing operations of around $46 million for the year to 30 June 2026.
That is a clear step up from the $40 million to $43 million range the company gave on 29 May, and it lands close to the top of the $43 million to $47 million guidance the business was working to before that. In other words, after knocking its own numbers down in late May, Tourism Holdings has spent the following two months clawing most of the reduction back.
The company said the improvement came from a favourable year end interest outcome, stronger late booking trends across its markets, and vehicle sales in New Zealand landing at the upper end of what it had expected. Its debt position also came in better than feared. Reported net debt as at 30 June is now expected to be about $436 million, below the $460 million to $470 million the company had flagged in May, which matters for a capital heavy business that owns and finances a large fleet of vehicles.
Tourism Holdings, which trades as thl and rents and sells motorhomes in New Zealand, Australia and North America, said forward bookings had turned around since the low point earlier in the year. North American bookings were running significantly ahead of the prior year, with bookings in the United States more than 50 percent higher in recent weeks. Forward bookings in Australia and New Zealand had returned to growth after a difficult stretch between March and June, when the company blamed a mix of soft consumer confidence and global travel disruption for weaker demand.
The turnaround is striking because the May downgrade was not a small one. At the time the company pointed to softer consumer confidence, disruption to global travel, the effect of conflict in the Middle East on vehicle sales, weaker rental demand in Australia and unhelpful movements in exchange rates. Radio New Zealand reported that the profit cut arrived on the same day the company confirmed a fresh takeover approach, which left investors weighing a weaker near term outlook against a bid that valued the business well above its recent trading price.
That bid is the backdrop to everything happening at Tourism Holdings right now. A consortium built around Australian private equity firm BGH Capital and the family interests of Luke and Karl Trouchet has put an indicative all cash offer of $3.10 a share on the table. When the revised approach emerged in late May it represented a premium of around 41 percent to the last traded price of $2.20, and the consortium already controls close to 20 percent of the company. Tourism Holdings granted the consortium access to due diligence in June, the stage at which a suitor gets to look properly at the books before deciding whether to firm up an offer.
A profit upgrade in the middle of that process cuts both ways. A stronger result and lower debt make the company look healthier, which is useful for a board that wants to argue any offer should reflect full value rather than a price struck when the outlook was at its gloomiest. It also gives independent directors and their adviser more to work with when they judge whether $3.10 a share is enough. Against that, a business that is clearly recovering is a more attractive target, and the consortium will have seen the same booking trends the market has now been shown.
Investors have been reminded more than once this year how quickly the mood around Tourism Holdings can shift. The shares have swung on takeover headlines, guidance changes and shifting travel demand, and they remain well up over the past year even after the May wobble. Newswire covered the revised takeover approach and the accompanying profit downgrade in May, when the stock jumped sharply on news of the higher offer.
For the wider tourism sector the update carries a modest but genuine piece of good news. The recovery in United States bookings suggests North American travellers are still keen to tour New Zealand and Australia by road, and a return to growth in trans Tasman bookings points to steadier domestic and Australian demand after a patchy first half. Motorhome hire is a useful barometer of discretionary travel spending because it involves a fairly large upfront commitment from the customer, so a lift in forward bookings tends to say something real about confidence.
The figures released this week are guidance rather than an audited result. Tourism Holdings said its full year accounts and Integrated Report are due on 25 August, when the numbers will be confirmed and the company will have the chance to say more about how it sees the year ahead and where the takeover process has landed. Until then the market has an upgraded forecast, a lower debt figure and an open question over whether the company will still be listed by this time next year. You can read Radio New Zealand’s report on the upgrade here and the company’s market update on the NZX announcements page.
What do you make of the timing of this upgrade in the middle of a takeover bid? Have your say in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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