Thursday 22nd April 2021
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thl provides a general update on its performance and expectations for the financial year ending 30 June 2021 (FY21).
FY21 financial performance
Following the latest review of expectations, thl has an improved outlook and expects that its FY21 net loss after tax will be between $14 to $18 million. This compares to the current average loss projected by market analysts of approximately $21.5 million.
We expect that net debt will not exceed $90 million on 30 June 2021 (our previous net debt guidance was for around $90 million). As signalled in our interim results, debt was expected to increase in the second half as we are re-investing in new fleet to replace the volume of vehicles that we continue to sell.
The vehicle sales market in the USA continues to remain strong. Record average sales margins have been achieved in recent months. Some of this margin growth is considered one-off in nature, reflective of the current market conditions.
Domestic rental demand has remained strong during the current shoulder season. We have positive expectations for the upcoming 2021 summer season and expect that domestic demand will be at or above the 2020 summer season.
Following completion of the Great New Zealand Motorhome Sale campaign in late 2020, average sales margins have recovered to previous norms and in some cases have exceeded these. Vehicle sales volumes continue in line with that achieved in the first half of FY21.
The New Zealand rental business will continue to be loss-making under a domestic only environment. We have experienced an increase in web search activity in connection with the re-opening of Trans-Tasman travel. We expect that this will convert to increased forward bookings as travellers continue through the holiday planning cycle. Search activity is highest for school holidays and Queenstown.
Vehicle sales volumes in Australia have remained stable and in line with the first half of FY21. Margins remain in line with expectations.
An extended period of State borders remaining open (other than one lockdown in Brisbane) has accommodated for growth in domestic rental demand. Yields in Australia are currently at levels consistent with our pre-COVID norms. Our recent performance within an open domestic environment supports our previously stated expectation that the Australian business can deliver positive EBIT in these conditions.
We believe that thl is well prepared for a range of scenarios.
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