Thursday 28th February 2013
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Tourism Holdings, which merged its campervan rental business with two rivals last year, cut its annual earnings guidance on a deteriorating Australian market after posting a small first-half loss as expected. The shares fell 1.5 percent.
The Auckland-based company made a loss of $500,000, or 0.4 cents per share, in the six months ended Dec. 31, from a profit of $4.2 million, or 4.2 cents, a year earlier, it said in a statement. That was at the top end of its November forecast, and earnings before interest and tax of $5.3 million beat First NZ Capital's expectation for $4.6 million. Sales rose 8 percent to $108.5 million.
Tourism Holdings cut its forecast annual profit, excluding costs from the merger with Kea and United, to between $3 million and $4 million from an expected $6.7 million, and $4.3 million in 2012. Forecast ebit was lowered to a range of $14 million to $16 million from previous guidance of $19.3 million.
"The strong and sustained rise of the Australian dollar against the currencies of core inbound tourism markets is entrenching perceptions that Australia is an expensive destination," chief executive Grant Webster said. "We are taking steps to put in place a cost structure that reflects these weak demand conditions, but we expect the business to underperform our previous forecasts."
Last year's merger was forecast to lift Tourism Holding's annual revenue to $241.3 million in 2014 from this year's $200 million, with profit rising to $14.8 million from this year's $4.5 million.
The shares fell 1 cent to 67 cents, the lowest level since Jan. 7. The stock is rated an average 'outperform' based on three analyst recommendations compiled by Reuters, with a median target price of 66 cents.
The board declared an interim dividend of 2 cents per share, with a record date of March 15, payable on March 22.
Tourism Holdings New Zealand rentals revenue fell 20 percent to $20.2 million in the period from a year earlier, and posted an ebit loss of $2.2 million from a profit of $2.9 million in 2011.
Australian rental revenue increased 1 percent to $37.4 million with ebit unchanged at $3.4 million, while US rental revenue rose 1 percent to $11.4 million and ebit gained 5 percent to $6.4 million.
The tourism business, which includes the Waitomo Caves attraction, showed a 3 percent fall in sales to $8.9 million, and ebit increased 14 percent to $800,000.
The company said Australian returns were squeezed due to heavy discounting, which is expected to continue, and it will look to strip out $3 million in annual costs.
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