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Tourism Holdings sees NZ merger, US driving 25 percent 1H earnings growth; shares jump

Wednesday 27th November 2013

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Tourism Holdings, which merged its campervan rental business with two rivals last year, said benefits from the merger and continued strong performance in the US market is expected to lift first-half earnings by 25 percent. The shares jumped about 18 percent to a three-year high.

Earnings before interest and tax may rise to $6.6 million in the six months ending Dec. 31, from $5.3 million a year earlier, chairman Rob Campbell told shareholders at their annual meeting in Auckland. Net profit would be $2.5 million compared to a loss of $500,000 a year earlier, when it recognised costs including those associated with the $69.5 million merger with United Campervans and KEA Campers.

"Importantly we consider there are no significant one off gains or losses to be included in this result and this is an indication of the progress we have made getting THL in shape," Campbell said. "There is no reason in today's environment why shareholders should not regard this outlook as a sustainable minimum."

The shares rose 15 cents to $1, matching the high of April 2010.

It was too soon to provide full-year guidance though the company expects to lift its dividend, he said. At the time of the merger last year, the company forecast 2014 sales rising to $241 million and EBIT of $28.8 million, although in February this year it cut its 2013 guidance because of a struggle in the Australian market.

For the second half of the year, Tourism Holdings expects the US performance to be "slightly down" on the year earlier, while New Zealand is expected to continue to show "strong merger-related growth," he said. Australia would continue to cut costs and growth was expected to accelerate in the company's tourism operations.

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