- THL upgraded its profit guidance for FY23
- It said its profit is expected to be above NZ$30 million
- The company said the improved outlook was on the back of its Q1 performance
Tourism operator and provider of recreational vehicles (RV), Tourism Holdings Corporation (NZX: THL), announced its upgraded profit guidance for FY23 ending 30 June today (12 October 2022).
It said that its net profit after tax in FY23 is expected to be above NZ$30 million due to its performance in the first quarter. This guidance compares with the company’s earlier guidance issued in August of a net profit of between NZ$17 million and NZ$30.2 million.
According to the update, this includes the impact of NZ$3.5 million in Apollo-related transaction costs in the same period. It may be recalled that last month, THL got approval from the New Zealand Commerce Commission (NZCC) to acquire Australian company Apollo Tourism and Leisure.
Improved Q1FY23 performance
The company said that the improved outlook was mainly due to the improved performance in the first quarter of FY23 and greater certainty on forward rental revenue for the upcoming season in Australia and New Zealand.
Further, it said that vehicle sales continued to perform well from a margin perspective in all markets.
THL further said in its update that New Zealand and Australia continued to deliver sales margins in line with its full-year 2022 performance, and the reduction of sales margins in the USA towards historical levels was occurring at a slower rate than previously guided.
THL had observed a decline in retail vehicle demand in line with current deteriorating economic conditions.
"However, supply chain issues in motorised RVs are now expected to continue deeper into 2023, resulting in a continuing shortage of sales stock in the market that is holding up sales margins," it said.
Further details in ASM
THL expects to provide further details on regional performance at the annual shareholders’ meeting to be held on 1 November 2022.
In New Zealand, THL owns Kiwi Experience and operates the Discover Waitomo group. THL also owns Action Manufacturing, a leading motorhome and specialist vehicle manufacturer.
Recently, the NZCC granted clearance to the company to merge with Apollo Tourism & Leisure Limited (ATL). As per the company release, the clearance came after an undertaking was given by THL and ATL that they would divest some ATL assets in NZ. According to the release, this would be in line with the terms of the agreement entered into with JUCY on 22 September 2022. According to the NZCC, the sale of assets is necessary to address some competition concerns.
On 12 October 2022, the stock was a top gainer on the NZX. It gained 6.18% to NZ$2.92, at the time of writing.