Tourism Holdings (NZX:THL): What is its outlook for H2 FY22?

Highlights

• THL suffered the biggest ordinary loss in FY21 amid a volatile environment.
• The Group expects its results to improve in H2 FY22 as travel curbs ease amid a strong vehicle sales demand.
• The overall outlook for the second half of FY22 remains uncertain. 

Tourism Holdings Limited (NZX:THL) is involved in the production, rental and sale of motorhomes and further tourism services in NZ and Australia.

THL suffered an ordinary net loss after tax of $14.3 million, down $34.3 million on pcp in FY21. It also reported a net debt of $49 million and refinanced debt facilities of up to $250 million through to 2024 in the period.

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The Group’s New Zealand business saw the biggest loss, given that it had the biggest fleet within THL’s rental businesses and the smallest population domestically by a significant margin.

Australia witnessed a positive domestic atmosphere from December 2020 to late June when the Delta variant of COVID-19 led to shutdowns in NSW and Victoria. The Group’s US business also fared well in FY21.

THL’s performance in H1 FY22

THL had projected that its performance in H1 FY22 will be below pcp due to current domestic travel curbs in Australia and NZ as well as lower performance in the 2021 US Summer season.

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The US autumn shoulder season performance has been in harmony with pcp and has seen sharper-than-anticipated reservations for winter. The vehicle sales market stays robust, with average sales margin growth surpassing pcp in all areas. However, the present sales margin is transitory.

THL expects a net loss after tax of between $4 million-$7 million in H1 FY22.

Road ahead

THL’s outlook for the second half of FY22 in NZ and Australia remains unclear as both markets have some form of domestic travel curbs in place. There remains uncertainty if the international demand returns in this period though respective governments have given timetables of easing border controls.

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Based on the NZ government’s announcement on border controls, any significant Trans-Tasman travel looks unlikely in H2 of FY22. Global booking entry for the US’ April–May shoulder season has been encouraging but the demand for this year remains uncertain.

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The Group’s H2 results are likely to be above pcp as domestic travel curbs ease and THL exploits solid vehicle sales demand. The Group is also keeping an eye on Omicron variant-related developments to evaluate the potential impact on travel.

On 6 January, at the time of writing, THL was trading at $2.97, down 2.3%.

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)