Tourism Holdings Rentals (THL) H1 2025 earnings summary

Executive summary

• Underlying net profit after tax (NPAT) was $26.5M, down 33% year-over-year, mainly due to ongoing RV sales challenges, despite 8% rental revenue growth and an 11% rental fleet expansion.

• New Zealand Rentals & Sales achieved record EBIT growth, with rental revenue up 25% versus 6% inbound visitor growth, highlighting strong operating leverage.

• Australian division saw the most significant decline, attributed to weak consumer discretionary spending on big-ticket items, though no structural market change is expected.

• North American RV retail sales showed signs of recovery in late 2024 after 40 months of decline, potentially signaling a global upturn.

• Interim FY25 dividend declared at 2.5 cents per share, fully imputed, with a 2% discount for DRP participants; dividend split expected to be 30% interim, 70% final.

Financial highlights

• Total revenue for the half-year was $458.4M, up 2% year-over-year; sale of services up 8%, sale of goods down 4%.

• Underlying EBITDA was $113.3M, down 5% compared to the same period last year; EBIT was $57.8M, down from $73.9M.

• Net finance costs increased 26% to $22.6M; net profit before tax down 37%.

• Basic EPS was 11.53 cents, down from 18.41 cents in the prior period.

• Closing net debt rose to $477M, with an equity ratio of 38.9%.

Outlook and guidance

• Focus remains on increasing underlying NPAT in FY25, but risks and uncertainty may delay recovery until FY26.

• Growth in global rental hire days and cost-out targets are on track, with robust demand in New Zealand and Australia.

• Prolonged downturn in RV sales, especially in Australia, is expected to continue; profit guidance for FY25 will be provided in Q4.

• No indicators of structural change in RV demand; confidence in a strong rebound supported by cost optimization and merger benefits.

• Long-term industry outlook remains positive, with demographic and travel trends supporting future growth.