Tourism Holdings bounces back in style

Friday 6th August 2004

What a difference a year makes. Tourism Holdings' stock has rebounded just like a bungy cord at one of the company's adventure operations.

The recovery is spectacular given the strength of the Kiwi dollar last year and a patchy performance from the company's Australian operations.

But with local tourist numbers at record levels and renewed optimism across the Tasman, the company has weathered the latest winter well.

A jump in profits last year has enabled THL to make some strategic acquisitions, namely the recent purchase of Hertz's campervan business.

Although early days, the move is widely seen as a huge plus as it allows the company to improve its market share in Australia for virtually zero cost.

The deal works out cash positive because of forward bookings and a planned sell-off of up to 50% of the old Hertz fleet next year.

Campervans are back in vogue, especially with retiring baby boomers, and the Hertz business will provide solid back up to THL's existing brands of Britz, Maui and Backpacker Caravans.

The company is due to report its full-year result in two weeks' time.

Forsyth Barr is forecasting earnings before interest and tax and net profit of $27.4 million and $10.8 million respectively. Both figures are well up on last year.

The consensus forecast for net profit is $10.1 million.

All things considered, THL is in a strong position.

New airline fleets; lower airfares and increased competition from Asian carriers are expected to stimulate tourism growth in the near future.

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