Tourism Holdings doubles first-half net profit on El Monte, tax benefit

Tourism Holdings [NZX:THL] says its first-half net profit more than doubled, reflecting the purchase of American campervan rental and sales business El Monte and a tax benefit resulting from US tax cuts.

The tourism and campervan company is also forecasting a net profit of $55-59 million, up from $30.2 million the previous year.

The company reported a $22.8 million net profit for the six months ended December, up from $11.3 million in the same six months a year earlier.

The year-earlier period didn’t include any contribution from El Monte, which delivered earnings before interest and tax (ebit) of $US7.2 million, well above the $US6.6 million target.

“It is pleasing to see most of the core businesses continue to improve as well as seeing the El Monte RV business outperform our expectations for the calendar year,” chairman Rob Campbell says.

“The new joint venture announced last week with Thor Industries will only enhance the prospects of Tourism Holdings,” he says.

Tourism Holdings shares jumped to a record $6.10 after the Thor deal was announced and closed yesterday at $6.04, 55% higher than a year ago.

Excluding one-offs, the result was 86% higher than the year-earlier six months and was achieved on a 43% jump in revenue.

Per-share earnings were up 95% and the company will pay a 13c per share dividend, up 30% and half of it imputed.

The company’s net debt fell to $178 million, below its $200 million forecast.

Chief executive Grant Webster says Tourism Holdings increased its debt to buy El Monte for $93.5 million in late 2016 and has “delivered to stage one of the integration of that business whilst reducing debt further than originally planned.

“The outlook remains positive and we will continue to grow in a sensible but global manner.”