Tourism Holdings says 2017 profit may rise as much as 17%
Tourism Holdings said profit in the 2017 year may rise as much as 17% as the campervan rental company benefits from increased visitor numbers and is open to acquisitions which could be funded by debt.
Chief executive Grant Webster told shareholders at their annual meeting that first-half profit is expected to rise to $9.5 million from $8.2 million a year earlier, contributing to annual earnings in the range of $27.5 million to $28.5 million, up from $24.4 million last year.
Earnings growth "reflects positive growth in the core businesses, offset by the investment in Mighway, Geozone and the foreign exchange translation of earnings impact," he said in presentation notes released to the NZX.
Mighway was launched a year ago as an online platform to link owners of campervans with people wanting to rent them. It is "providing us with peak season flexibility, regional pick-up options that are otherwise unprofitable and a connection point with owners for other RV related activities," Webster said. "The marketing, owner acquisition, development and management costs are still higher than the revenue expectations this year and we will, again, make a loss in this business while it's in start-up mode."
Geozone is a network of GPS-enabled travel apps.
Mr Webster noted that dividend payments rose 27% to 19c last year, outpacing a 21% increase in profit. "Dividend growth exceeding profit growth is clearly not sustainable long term; however, we remain highly focused on providing a strong and sustainable dividend flow into the future," he said.
The shares fell 2.7% to $3.29 and have surged 54% this year.