THL - Tourism Holdings

[minimoke]

Time for me to get the Blood Mop out for this one.Lol.
Heart skipped a few beats. Phew. Still some way to go before I Need to look at stop loss. Happy to ride this out in the meantime.

[Beagle]

up until the last few days that was correct


9889

Nicely spotted. Another warning sign for those that need it.

[winner69]

Nearly 20% off recent highs

Crash territory

[couta1]

Nearly 20% off recent highs

Crash territory Low PE, bargin hunters be moving in soon.

[causecelebre]

H1 looking interesting

Doji followed by Hammer candle and a bit of divergence, but volume has fallen off

https://www.tradingview.com/x/ChB4F2Fe/

[Beagle]

Low PE, bargin hunters be moving in soon.

Company hasn't forecast FY19 earnings so if we don't know what the forward PE is.

[golden city]

The whole thl story hasn’t change. It is still growing core business. Can’t expect management to keep growth rate and not taking money to reinvest in future. I am stay calm just taking the dividends .

[golden city]

I just calculated. Thl has paid me over 200k More than My initial investment

[sb9]

The whole thl story hasn’t change. It is still growing core business. Can’t expect management to keep growth rate and not taking money to reinvest in future. I am stay calm just taking the dividends .

Well said, second that.

[Jantar]

After reading some fairly positive comments, followed by plenty of negative ones, and seeing the massive drop in SP, I decided to go back and review the investor presentation that accompanied the results announcement.

Overall, I found the outlook for 2019 to be uncertain, but not as negative as the reaction would suggest. The following comment from page 7 suggests that at these prices the return to shareholders is looking very good indeed.

"We need to consider new medium-term goals for the business. The underlying assumptions for the 2020 NPAT goal of $50M haven’t materially changed. We will reset a new goal. It is too soon to set that goal, but we will set it openly and deliver. The new goal will be substantially higher."

[golden city]

It is a substantial higher goal. That is what I saw it too could be anything from 60m to 80m. They must know what the new acqusition looks like and have the numbers soon could be a underwrite cr for the acsqusition too

[Justin]

When the substantially higher new goal set up ？Mr Market dont like to wait.

[minimoke]

It is a substantial higher goal. That is what I saw it too could be anything from 60m to 80m. They must know what the new acqusition looks like and have the numbers soon could be a underwrite cr for the acsqusition tooTHL have over the past few years been pretty good at delivering what they say they will. While SP is getting closer to my stop loss I"m still happy to remain a wile longer and see how this plays out.

[Justin]

It is a substantial higher goal. That is what I saw it too could be anything from 60m to 80m. They must know what the new acqusition looks like and have the numbers soon could be a underwrite cr for the acsqusition too

Where the new acquisition information come from, any more details? thanks

[Patient Panda]

Plenty of talk about their acquisition hunt in the annual report.

[Justin]

yes，found it，thanks

“We are continuing to explore M&A activity that adds value to the longer term position of thl. We are currently in discussions with various parties around the world,
with interesting opportunities for both core thl and the businesses in which we have equity interests. We will keep the market informed, as appropriate.”

[golden city]

It could well be a few acqusition not just one to consolidated the industry with Share offer to the party involve. Thl is good at doing deals without much cash

[iceman]

After reading some fairly positive comments, followed by plenty of negative ones, and seeing the massive drop in SP, I decided to go back and review the investor presentation that accompanied the results announcement.

Overall, I found the outlook for 2019 to be uncertain, but not as negative as the reaction would suggest. The following comment from page 7 suggests that at these prices the return to shareholders is looking very good indeed.

"We need to consider new medium-term goals for the business. The underlying assumptions for the 2020 NPAT goal of $50M haven’t materially changed. We will reset a new goal. It is too soon to set that goal, but we will set it openly and deliver. The new goal will be substantially higher."


I'm with you Jantar. I don't see in the report any suggestion that profit will be lower next year, quite to the contrary, but with some risk due to further funding of TH2. I sold 40% of my THL shares back in February but intend to hold the rest long term and see how it plays out. I acknowledge the company is changing course quite substantially with the JV. I find it quite exciting to be part of it but will be watching progress carefully.

[Yoda]

I do not know,however "the market" is saying it doubts it will.
So should we decide to "only" pay twice the 6.175 eps growth?
6.175 x 2 =12.35.
So PE of 12.35 times year 2020 eps of .428, gives a share price of $5.28.
SUM easier decisions elsewhere,should you follow Rob??
Written on 13/7...thanks Percy .. Will we get to 5.28?

[Jantar]

Written on 13/7...thanks Percy .. Will we get to 5.28?
If we do, I shall sell half the remainder of my portfolio and buy only THL :)

[Yoda]

updated this thl chart just to see what may happen in the next year or two

Forecast eps based on $39m for F18 and $50m for F19 (normalised ...without the one off gains expected F18)

Sort of looks OK but share price might have got ahead of itself a bit

Current PE about 19 which is getting pretty high for a company which isn't really generating that much cash

Like these charts as besides showing whats happened (esp earnings) it gives you a feel of market sentiment over time. As we all know market sentiment is one of the key drivers of share price.
From 15/7 ..... Thanks for that chart Winner. I finally sold out at 5.90. Watch and wait . I did buy a few at 6.10, but on the dead cat bounce.... Oh well.
Will get back in at some stage .

[Yoda]

If we do, I shall sell half the remainder of my portfolio and buy only THL :)
Sounds like a good plan !,

[percy]

Written on 13/7...thanks Percy .. Will we get to 5.28?

I do not currently own THL and do not have an opinion about them,however the market does have a habit of overshooting/undershooting,and the chart does indicate $5.28 is possible as the sp is a downtrend from the high of $6.85 it reached a few weeks ago.If I was looking to buy I would wait for the trend to change.The current sp is $5.60.
I can only quote Market Screener figures,which I do not know whether are correct or not.
It would appear 2019 projected eps are causing the present sp weakness.
The eps growth from 2019 to 2020 is 35.8% and the 2020 to 2021 eps growth is 30%.
So one bad year,with five great years.
...........……………..2016......……...2017............. 2018.............2019............2020...........20 21.
eps....................20.5...............24.6.... ..........49.6.............25.4.............34.5.. ..........44.9
eps growth.......................20%............100%.. .......-[48.2%].......35.8%..............30%
PE ratio............................................. ..............................22.9.............16. 8...........12.9
yield............................................. ..................................4.27%..........5 .10%........6.17%

[iceman]

Action Manufacturing cleared for a large land purchases to build more campervans in Hamilton. Good news.http://www.scoop.co.nz/stories/BU1808/S01045/tourism-holdings-campervan-maker-cleared-to-expand.htm

[Patient Panda]

Action Manufacturing cleared for a large land purchases to build more campervans in Hamilton. Good news.http://www.scoop.co.nz/stories/BU1808/S01045/tourism-holdings-campervan-maker-cleared-to-expand.htm


Thanks for the link

interesting final sentence “Earlier this week Action announced the purchase of Auckland-based Fairfax Industries, a maker of refrigerated truck and trailer units, as part of a strategy to expand into large commercial vehicles”.

[Yoda]

Thanks Percy.....better keep some cash on hand .

[Beagle]

Picture says 1000 words about how savagely analysts have downgraded their EPS outlook https://www.marketscreener.com/TOURISM-HOLDINGS-LTD-6491392/revisions/
That's ugly ! I'm with Percy, no way I'd touch this until the trend changes.
Worth noting that THL has generally traded around 17 times forward earnings. 17 x 25 cps = $4.25.

[winner69]

Consensus still close to 6 bucks

thl definitely need to come up with those acquisitions pretty soon to get punters excited again and to get the share price up again.

Current business not worth 6 bucks or even 5 bucks on fundamentals .....but how many years can they go on making acquisitions to keep the merry go round going round and keep the share price at over inflated levels

[golden city]

I think if the share price going down further Citic might lodge a full takeover

[RupertBear]

I may be wrong but I still believe this is a good long term hold with a good divie. I am mildly tempted to buy a few more at these levels although I agree it may go down even further in the short term ;)

[couta1]

I may be wrong but I still believe this is a good long term hold with a good divie. I am mildly tempted to buy a few more at these levels although I agree it may go down even further in the short term ;) I reckon you're got the situation pretty well sussed out there young bear.

[Justin]

SP stop dropping today:)

[iceman]

Someone keen to pick these up with 50000 shares bid at 5.71

[BlackPeter]

Someone keen to pick these up with 50000 shares bid at 5.71

trying to catch dropping knifes is dangerous .... but it looks like somebody did.

GLTAH!

[golden city]

Possible the one trying to catch fallen kneife is a Kong fu master citic China haha

[iceman]

trying to catch dropping knifes is dangerous .... but it looks like somebody did.

GLTAH!

THL a green arrow in a sea of red on the NZX today.
Here is one more recognition for this great company https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12120371

[BlackPeter]

THL a green arrow in a sea of red on the NZX today.
Here is one more recognition for this great company https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12120371

True - nice upwards move, but still below the MA200 - actually just touching it.

Don't misunderstand me - THL is a well run company which delivered great returns for its shareholders. If we assume it keeps growing as in the past five years with an EPS CAGR of above 25%, than it is definitely still undervalued.

Question is just - how likely is this? Much easier to grow the earnings from 4 cts (in 2013) to roughly 40 cts / share within 5 years than doing this exercise again - or does anybody seriously expect $4 EPS in 2023?

What I am saying is - growth is guaranteed to slow down and in this case a backward PE of 57 and a forward PE of 16 (based on 4-traders forecasts) does not look that flash anymore. From a fundamental perspective it looks fully valued to me - and while I expect them to do well over years to come - from a fundamental perspective do I think that the downward risks look at this stage more significant than the potential upward gains.

What are the risks I see?

tourism is correlated with people having spare money. Money might sit a bit tighter when the current bull run ends ...
all the usual suspects impacting on tourism including a wave of anti-tourist publicity in New Zealand impacting on the "feel-good" factor for tourists.
its a cyclical business and it had a good run.
part of their business is selling these newish campervans at an for them still acceptable price. At some stage however the market for pre-loved camper vans will reach saturation - I guess, how many of them does one need to stand around in ones driveway? From a personal observation - more and more campervans are now cluttering the landscape in our neighbourhood, but (at least I hope) it sort of feels we reached saturation level. LOL.
new strategy (TH2) is interesting, but unproven. Are the risks factored in into the SP?



Having said that - the market is short term not driven by fundamentals, i.e. nobody can predict based on the fundamentals how the SP will develop short and midterm. If might push up today or it might bounce back at the MA200. If it manages to push back through the MA200 and stick there, it well might go back into an uptrend.

Still not sure how much future potential people would see for the share price given its current lofty heights ...

[winner69]

BP - good post

Most of thl’s recent growth has come from acquisitions .....and further acquisitions are needed if share price is to keep rising

That’s how I see it anyway

[RTM]

BP - good post

Most of thl’s recent growth has come from acquisitions .....and further acquisitions are needed if share price is to keep rising

That’s how I see it anyway

Yes....great summary. I guess a positive for them is that there is a steadily increasing number of folk reaching retirement age who will rent one of their vans for a holiday or holidays once they sell the family home and move to the provinces. Or secure a loan from HBL.

The TH2 initiative concerns me quite a bit. Maybe because I don't fully understand it. IT projects can easily go wrong and consume a lot more money than budgeted. And will it deliver what they think it will ? I am really in the hands of the company management here as as noted above....I don't fully understand how it will be used to generate a big return. Buying a Camper Van, renting it, selling it...I can understand that. But this is another step. Lets suppose / hope that the idea is sound and great ...as someone noted...it turns them into a tech company. Do they have the expertise ?


Wee bit concerned, and yes, I do hold.

[iceman]

BP - good post

Most of thl’s recent growth has come from acquisitions .....and further acquisitions are needed if share price is to keep rising

That’s how I see it anyway

Agree it was a good post from BP. The risks he outlines are real but some not particularly high risk at present, in my view.

I expect an acquisition announcement soon-ish to continue growing the business apace.

[KJ]

Yes....great summary. I guess a positive for them is that there is a steadily increasing number of folk reaching retirement age who will rent one of their vans for a holiday or holidays once they sell the family home and move to the provinces. Or secure a loan from HBL.

The TH2 initiative concerns me quite a bit. Maybe because I don't fully understand it. IT projects can easily go wrong and consume a lot more money than budgeted. And will it deliver what they think it will ? I am really in the hands of the company management here as as noted above....I don't fully understand how it will be used to generate a big return. Buying a Camper Van, renting it, selling it...I can understand that. But this is another step. Lets suppose / hope that the idea is sound and great ...as someone noted...it turns them into a tech company. Do they have the expertise ?


Wee bit concerned, and yes, I do hold.

Likewise I don't understand how TH2 works.The coy needs to explain how this operates.How does it generate its revenue?
I would be pleased if anyone knows & can explain as I am not IT savy. What is in it for Thor?

[simla]

From the Mighway website.

The present:

"Discover the United States, from the beautiful forests and beaches in California, to the nightlife and delicious food in Florida, and everything in between. From the West Coast to the East, from North to the Deep South, the States are yours to see. Or explore clean, green New Zealand, with its beautiful scenery, kind locals, and amazing history. From North to South, New Zealand is an adventurers dream, waiting for you enjoy it.

With Mighway, you can enjoy the freedom to go where you want, when you want. We've got tons of great travel tips for you on our blog, amazing inspiration pics on our Instagram, and a great community to join on our Facebook.

Whether you want a 2-person campervan in New Zealand, or a 12-person RV for the States, we can help. Plan your trip with Mighway, and let the journey unfold!"


But now the future (same site):

"TH2 is a joint venture created by two travel giants: Thor Industries, the world’s largest RV manufacturer, and thl, the world’s largest RV rental and sales operator. Together, TH2 is bringing together with the world’s best travel and technology companies to reimagine the RV experience.

TH2's innovative approach to the RV experience will improve every aspect of ownership with capabilities that include trip planning and booking, remote monitoring, theft tracking, and peer-to-peer RV and campsite rental.

Mighway is proud to be part of the TH2 family."

The bolding is mine. If it works, it should be a game changer I would have thought. My reading is it is about owning the screen space, owning the app. Agree that launching successful computer work is an interesting challenge, but these guys seem pretty organised.

Why is owning the app important? Ask yourself how you react to this news then: "Most notably, 44% of younger users (those ages 18 to 29) say they have deleted the Facebook app from their phone in the past year." http://www.pewresearch.org/fact-tank/2018/09/05/americans-are-changing-their-relationship-with-facebook/ Apps matter.

[RTM]

The bolding is mine. If it works, it should be a game changer I would have thought. My reading is it is about owning the screen space, owning the app. Agree that launching successful computer work is an interesting challenge, but these guys seem pretty organised.

From their recent report

"We will invest further into TH2. The opportunity is substantial and, given the very low level of cash investment to date from thl, the approach now is to invest to create a deeper, richer product, build it faster and take a more expansive approach to how we engage customers (we will commence with a freemium consumer product offer, rather than seeking subscription fees upfront). This year we will invest around $15M NZD in this business (thl share)."


It sounds to me as though the plan has already changed. I hope they do not have a tiger by the tail with this one.

[simla]

... "The opportunity is substantial" ...

It sounds to me as though the plan has already changed. I hope they do not have a tiger by the tail with this one.
Agree about the tiger. On the other hand they obviously hope for big things. The presentation with the results said of TH2 "a global digital platform for the RV industry." p5 http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/THL/322893/285512.pdf

[winner69]

Did you guys read this back in February

http://www.thlonline.com/FinancialInvestorInformation/Documents/thl-Joint-Venture-TH2-Investor-Presentation.pdf

[simla]

Yes. The difficulty is that they are understandably being coy about their hopes. The nearest they got to communicating the scale of their hopes (I thought) was p9.

"The [Global] RV Ecosystem is Fragmented
WE WILL BE THE PLATFORM TO CONNECT IT!"

Presumably they teamed up with Thor to maximise the commitment from the industry in order to maximise the chance of industry buy-in later. Plus they probably want their app preinstalled on the vehicles as well as customer phones (I have not seen any mention of a phone app, I'm assuming it?)

Launching websites / apps leads to unknown outcomes usually. I certainly wish them luck as this seems a great idea.

[winner69]

A close below 560 would see the continuation of the down trend from 680. That was about when the long term uptrend ceased

A fall of 20% is quite significant

Must be some Fibonacci support levels coming up ...yes?

[winner69]

Promising start to week for thl

Hope 560 was the low and it’ll be back to 6 bucks plus soon

[minimoke]

Promising start to week for thl

Hope 560 was the low and it’ll be back to 6 bucks plus soon
???? up 0.5% on $3000 worth of trades. Love the optimism!

[Justin]

nice rebound today

[BlackPeter]

nice rebound today

still below the MA200, though :ohmy:

[oldtech]

I do not currently own THL and do not have an opinion about them,however the market does have a habit of overshooting/undershooting,and the chart does indicate $5.28 is possible as the sp is a downtrend from the high of $6.85 it reached a few weeks ago.If I was looking to buy I would wait for the trend to change.

Well on it's way there at the moment ... :(

[winner69]

Well on it's way there at the moment ... :(

Yesterday’s close of 555 another low in this downtrend from 685

Lower highs and lower highs equals downtrend

More than 20% off its highs ..ouch

Becoming more realistically valued on cash flows by the week. Desperately needs to announce a decent acquisition to pump up the share price again.

[Beagle]

Yesterday’s close of 555 another low in this downtrend from 685

Lower highs and lower highs equals downtrend

More than 20% off its highs ..ouch

Becoming more realistically valued on cash flows by the week. Desperately needs to announce a decent acquisition to pump up the share price again.


The directors have not clearly articulated their strategy or the expected benefits of Th2. Market is unconvinced this adds any value. These sort of IT projects almost always have a habit of going WAY over budget sometimes by multiples of same. TA looks shocking.

[winner69]

Did somebody mention 528 as a possibility

[RupertBear]

Must be close to good buying. Nice wee divie coming up soon

[RupertBear]

The directors have not clearly articulated their strategy or the expected benefits of Th2. Market is unconvinced this adds any value. These sort of IT projects almost always have a habit of going WAY over budget sometimes by multiples of same. TA looks shocking.

Yes it does Mr Beagle but no worse than your mate TRA! :p My bear gut tells me this one will turn around soon and be the better one to be holding atm, but that maybe wishful thinking as I hold THL ;)

[couta1]

Yes it does Mr Beagle but no worse than your mate TRA! :p My bear gut tells me this one will turn around soon and be the better one to be holding atm, but that maybe wishful thinking as I hold THL ;) Add HBL to the former two to get your current unholy threesome and yes I do hold all three.PS-Always follow your bear gut unless we're talking the likes of SLI.

[DarkHorse]

Risk-reward doesn't look good at all to me atm - too much uncertainty and not much to appeal to either FA or TA minded investors. After being a happy holder for years pleased to sell remainder at 5.81. Will definitely be on my watchlist though.

[winner69]

Been a tough couple of weeks for thl shareholders

Wonder what this week will bring, hopefully not another diwn week

Wonder what share price will be come ex dividend date of Oct 1st

thl badly need to announce the expected big acquisition to boost the shareprice

[oldtech]

Currently at $5.30, hope it remembers to stop at $5.28 ...

[Beagle]

Currently at $5.30, hope it remembers to stop at $5.28 ...

No such luck. Looks like its going to test $5.

[couta1]

No such luck. Looks like its going to test $5. Being priced as a no growth stock.Lol.

[arc]

No such luck. Looks like its going to test $5.

Wasn't this one the supposed target of an Asian buy-in a while ago... ?

Im seeing this type of thing happening across a broad spectrum.
The machines color code sequence (health/status) is creating lots of yellow warning lines. International actions are triggering multiple color reversal events.

[sb9]

Wasn't this one the supposed target of an Asian buy-in a while ago... ?

They may be lurking behind scenes and adding more at these prices....

[arc]

you have a good point
pump, dump, repump.. repeat

[sb9]

you have a good point
pump, dump, repump.. repeat

In other words "rinse and repeat" :)

On a serious note, based on their commentary at FY results time they said they've few things underway and may be market thinking that they will tap shareholders to fund some of that.
Hence the reason I'm picking weakness in price as cap raise price will be related to VWAP for whatever period they calculate.

[Beagle]

Being priced as a no growth stock.Lol.

Have a look at the 5 year chart mate and then plot the logical extension from about the 4 year point to now in a straight line and you get a nice straight line from about 90 cents five years ago to just on $5 today. Maybe the recent steepening of the trend line was just over exuberance and the current price is back to fair value ?

[arc]

Have a look at the 5 year chart mate and then plot the logical extension from about the 4 year point to now in a straight line and you get a nice straight line from about 90 cents five years ago to just on $5 today. Maybe the recent steepening of the trend line was just over exuberance and the current price is back to fair value ?


Yes Beagle, I was just looking at that same history. Im still holding despite the recent downturn... The machine agrees, with caution

[Snow Leopard]

Have a look at the 5 year chart mate and then plot the logical extension from about the 4 year point to now in a straight line and you get a nice straight line from about 90 cents five years ago to just on $5 today. Maybe the recent steepening of the trend line was just over exuberance and the current price is back to fair value ?

Using a linear price axis on a chart spanning from $0.50 to $7.00 is not a good idea, to put it mildly.

The log chart shows a fairly even 5 years of uptrend that was sick by mid-July, on life-support beginning August and dead by September.

[winner69]

Have a look at the 5 year chart mate and then plot the logical extension from about the 4 year point to now in a straight line and you get a nice straight line from about 90 cents five years ago to just on $5 today. Maybe the recent steepening of the trend line was just over exuberance and the current price is back to fair value ?

But they kept announcing good things like acquisitions and big targets to keep punters enthusiastic.

A bit of a lull lately ....desperately need to announce a big acquisition / ‘event’ tonstop the downtrend

Did read an article on FCF per share multiples today ....basically said what Jeff Bezos said a while ago ....and on that basis a reasonable value for thl is 400/450

[Beagle]

But they kept announcing good things like acquisitions and big targets to keep punters enthusiastic.

A bit of a lull lately ....desperately need to announce a big acquisition / ‘event’ tonstop the downtrend

Did read an article on FCF per share multiples today ....basically said what Jeff Bezos said a while ago ....and on that basis a reasonable value for thl is 400/450

Reversion to the mean is SUM times a bitter pill to swallow...
That rising debt is a worry as is Trumps terrible tariff tantrums.

[Beagle]

Using a linear price axis on a chart spanning from $0.50 to $7.00 is not a good idea, to put it mildly.

The log chart shows a fairly even 5 years of uptrend that was sick by mid-July, on life-support beginning August and dead by September.


A simple 180 day moving average line would have kept people in from 50 cents all the way to getting out a while back at just over $6, 12 times your money in 5 years, not too shabby eh. When it clearly breaks back up through that support line I'll buy it and not before.

[Jonboyz]

Solid company to me as a long-term investor. Holding $50k worth of stock atm. Looking to add more if it gets to $5. I think the recent SP drop is only of concern to traders and only temporary at that.

[winner69]

Solid company to me as a long-term investor. Holding $50k worth of stock atm. Looking to add more if it gets to $5. I think the recent SP drop is only of concern to traders and only temporary at that.

Need to come up with a big acquisition / event to turn the tide ....without that share price will continue to drift.

Thl share price always has had heaps of future potential built in to it (forward looking) and the future at the moment doesn’t have heaps of potential ..just solid at best growth

[Leftfield]

Need to come up with a big acquisition / event to turn the tide ....without that share price will continue to drift.

Thl share price always has had heaps of future potential built in to it (forward looking) and the future at the moment doesn’t have heaps of potential ..just solid at best growth


I'm not sure an acquisition is needed, THL just needs to up its game in the USA.

I'm just back from a tour of 8 US states by RV (using Cruise America) and still see much potential for THL in the US and Canada. The market leader Cruise America is not doing a great job with dated vehicles and poor service. All the THL / el Monte vans we saw were much better designed and in better condition. THL has much room to grow and based on our rough survey's would only have 10-20% of the USA market.

I also see a Huge potential in THL's IT with apps such a Camper Mate - there is a huge gap in the USA for such apps at the moment.

I'm sure the THL SP will rebound, but in the meantime have taken my gains and reduced my position by 2/3.

[upside_umop]

I'd put THL in a similar bucket to AIR. I.e. THL and AIR are both highly leveraged to economic growth and oil prices. When oil prices increase, economic activity slows and prices increase. THL with their largely fixed costs, low margins and capital intensive business will suffer.....much like an airline does in times like these.

Without being too controversial, it I was betting oil was to continue to trend towards $100+ for the next 18 months, this is stock I'd be selling along with AIR NZ.

Sell, sell, sell.

[minimoke]

Sell, sell, sell.Seems like you are being listened to $5.10 the new price

[bull....]

fcnz lowered price to around 5 , so that probably means lower

[oldtech]

Ouch ... from $6.85 on 25/06 to $5.11 as I write this in just under three months ... my daughter's portfolio has some in it, sends shivers down my spine when I look at it :(

Not keen on selling as she will take a substantial loss, I think for better or worse she will have to ride this one out.

[winner69]

fcnz lowered price to around 5 , so that probably means lower

must be looking at real numbers like free cash flow rather than those fandangled PE ratios which are always a bit dodgy for high capex spend stocks

[minimoke]

Anyone shed some light on waht this means

"

In its annual results for the year ended 30 June 2018 released on 28 August


2018, Tourism Holdings Limited indicated its intention that the Dividend


Reinvestment Plan (DRP) for the final dividend would be fully underwritten.





thl wishes to advise that as part of its ongoing review of its business and


activities, thl has decided to no longer seek to fully underwrite the DRP for


the final dividend.

[mondograss]

I had to look it up myself. When a DRP is fully underwritten they issue enough shares to accommodate every single shareholder deciding to participate in the DRP and then have a broker sell what doesn't get issued to shareholders and use the money that's raised to pay out the dividend to those that wanted the cash. Since this basically drives a lot of selling and there seems to be plenty of that going around it makes sense they wouldn't make the situation worse by underwriting it this time. Underwriting is something that makes sense if you have a high DRP participation and a growing share price and little\no sense if you don't.

[minimoke]

I had to look it up myself. When a DRP is fully underwritten they issue enough shares to accommodate every single shareholder deciding to participate in the DRP and then have a broker sell what doesn't get issued to shareholders and use the money that's raised to pay out the dividend to those that wanted the cash. Since this basically drives a lot of selling and there seems to be plenty of that going around it makes sense they wouldn't make the situation worse by underwriting it this time. Underwriting is something that makes sense if you have a high DRP participation and a growing share price and little\no sense if you don't.
Thanks for that

[couta1]

Ouch ... from $6.85 on 25/06 to $5.11 as I write this in just under three months ... my daughter's portfolio has some in it, sends shivers down my spine when I look at it :(

Not keen on selling as she will take a substantial loss, I think for better or worse she will have to ride this one out. Just hold them, although it only makes up about 1.5% of my portfolio I'm down 20%. I've learnt from the likes of KMD which I sold for a substantial unnecessary loss just to sit and wait whilst collecting divvies along the way. PS-Remember the market wouldn't have a clue what it's doing a lot of the time anyways.Lol.

[minimoke]

I suppose, on the bright side, I should get more shares in the DRP along with the 3% discount

[Sideshow Bob]

I'm not sure an acquisition is needed, THL just needs to up its game in the USA.

I'm just back from a tour of 8 US states by RV (using Cruise America) and still see much potential for THL in the US and Canada. The market leader Cruise America is not doing a great job with dated vehicles and poor service. All the THL / el Monte vans we saw were much better designed and in better condition. THL has much room to grow and based on our rough survey's would only have 10-20% of the USA market.



I just had a bit of a look...…….keen on this for an upcoming holiday! Also payback for all those tourists who come to NZ and drive like a nong…..

[oldtech]

Just hold them, although it only makes up about 1.5% of my portfolio I'm down 20%. I've learnt from the likes of KMD which I sold for a substantial unnecessary loss just to sit and wait whilst collecting divvies along the way. PS-Remember the market wouldn't have a clue what it's doing a lot of the time anyways.Lol.

Thanks couta1; yup that's my intention - for better or worse the die is cast, so will sit, hold, collect divvies, and ride it out on her behalf. May average down if I can pluck up the courage - not just yet though. :eek2: Think I will wait and see just where this settles to.

[minimoke]

May average down if I can pluck up the courage - not just yet though. :eek2: Think I will wait and see just where this settles to.Jeez - at this rate I might have ot find some cash and do the same.

(all quiet on the takeover front - at this level (now at $5.06)it would be attractive if there was anyone around)

[Justin]

But they kept announcing good things like acquisitions and big targets to keep punters enthusiastic.

A bit of a lull lately ....desperately need to announce a big acquisition / ‘event’ tonstop the downtrend

Did read an article on FCF per share multiples today ....basically said what Jeff Bezos said a while ago ....and on that basis a reasonable value for thl is 400/450

Will SP reach to the reasonable value :confused:

[peat]

at this level (now at $5.06)

even though I said it would hit 5.00 I'm still surprised !!

[minimoke]

I just had a bit of a look...…….keen on this for an upcoming holiday! Also payback for all those tourists who come to NZ and drive like a nong…..And as you speak. seven people in a campervan!!
https://www.stuff.co.nz/timaru-herald/news/107183546/unknown-number-of-patients-after-serious-crash-on-sh1-north-of-timaru

[winner69]

And as you speak. seven people in a campervan!!
https://www.stuff.co.nz/timaru-herald/news/107183546/unknown-number-of-patients-after-serious-crash-on-sh1-north-of-timaru

And Kiwis sadly do the same in the US
https://www.stuff.co.nz/national/106943992/kiwi-couple-killed-in-headon-car-crash-in-us

[Xerof]

Anyone shed some light on waht this means

"

In its annual results for the year ended 30 June 2018 released on 28 August


2018, Tourism Holdings Limited indicated its intention that the Dividend


Reinvestment Plan (DRP) for the final dividend would be fully underwritten.





thl wishes to advise that as part of its ongoing review of its business and


activities, thl has decided to no longer seek to fully underwrite the DRP for


the final dividend.




mondograss is correct in what he/she/rainbow says. I would point out that they have only said they will not FULLY underwrite the DRP. I guess it'll be just enough to cover cash outflows. Winner, you'll know - whats their FCF like?

[RupertBear]

A simple 180 day moving average line would have kept people in from 50 cents all the way to getting out a while back at just over $6, 12 times your money in 5 years, not too shabby eh. When it clearly breaks back up through that support line I'll buy it and not before.

Are you not a weany bit tempted to buy a few at these levels Mr Beagle? If it goes below $5 I fear I will be unable to resist gobbling up a wee few. PS I am still working on my impulse control! :D

[Beagle]

Are you not a weany bit tempted to buy a few at these levels Mr Beagle? If it goes below $5 I fear I will be unable to resist gobbling up a wee few. PS I am still working on my impulse control! :D

Tricky thing for dogs and bears catching falling knives using just your claws, (so as to avoid bloodshed). Almost inevitably you slice some of your paw pads and end up limping for quite a while afterwards. TA screams stay out. For mine, they have failed miserably to articulate how their investment in th2 will be earnings accretive. They introduced this into a JV with Thor, wrote the value up and engaged in highly creative accounting saying they'd made a profit. To add insult to injury they're now throwing money at it and who knows how deep that rat hole becomes ?
Show me one major IT project that's gone to plan in terms of cost and time...I think the risks are the cost blows right out and there's no tangible EPS from it.
I also think people have forgotten that tourism can be a cyclical industry...business confidence and now consumer confidence is hitting decade lows.

A far less risky strategy is to wait for the next up cycle, (whenever that may be) and buy into that. Sure it trades cum a nice divvy but this hound reckons paying divvies out of rising debt level's is a dangerous game. They're already 100 campers behind with their re-sales, how are they going to sell these expensive campers if business and consumer confidence is deep in the toilet ? Cash flow to be impacted further ?
And then to trump all these concerns there's the man himself who is doing his best to start a trade war with all and sundry including America's friends...that can't help tourism.

[Balance]

Are you not a weany bit tempted to buy a few at these levels Mr Beagle? If it goes below $5 I fear I will be unable to resist gobbling up a wee few. PS I am still working on my impulse control! :D

Watch and wait for a or several big crossing(s) of several million shares.

Then ......

[RupertBear]

Watch and wait for a or several big crossing(s) of several million shares.

Then ......

Cheers Balance :)

[carrom74]

Are you not a weany bit tempted to buy a few at these levels Mr Beagle? If it goes below $5 I fear I will be unable to resist gobbling up a wee few. PS I am still working on my impulse control! :D

I entered yesterday @5.08 as i was not able to resist...

Also Slide 44 of their presentation read as "With a number of M&A and business changing activities still underway in the business, we believe it is prudent to wait until the Annual Meeting in October to review the forecast position for the Company"

You make a call on and decide... (its up to $5.22 already... ) so hurry...

[Leftfield]

Well done Carrom..... looks like you picked it!

[winner69]

Good old Forbar eh .....their revised target of $6.00 and OUTPERFORM gave the thl share price a decent boost today

Mind you many rate Forbar on a par or even worse than Morningstar

Never mind that if it convinced their clients into buying that’s good

[Beagle]

FCNZ at $5...who does one believe ? Personally I'd back FCNZ's analysts over Forbar any day of the week.

[RupertBear]

Good old Forbar eh .....their revised target of $6.00 and OUTPERFORM gave the thl share price a decent boost today

Mind you many rate Forbar on a par or even worse than Morningstar

Never mind that if it convinced their clients into buying that’s good

My FOMO got the better of me today and I had a wee nibble ;) didnt time it quite a well as Carrom did yesterday though, well done. I guess time will tell if its one of those dead cats playing bounce with me :D

[golden city]

My own valuation for current year is 5.80 to 6.60

[Justin]

Fcnz vs Forbar :confused:

[oldtech]

THL SP is starting to look like a roller-coaster - up to $5.45 at the moment and climbing like a Jumbo, in stark contrast to the last two weeks.

[winner69]

Around 585 would signal downtrend from 685 over ....a new higher high that would be

[Justin]

What real PE this company worth? Any suggestions ?

[winner69]

What real PE this company worth? Any suggestions ?

Using PE ratios for companies like thl can get you into trouble, especially if you think anything above 10 is ‘right’

Better to look at FCF per share and work a value out from there.

So am I saying a PE of 10 is what it’s worth ...maybe

[Justin]

the th2’s partner , Thor Industries inc, the SP dropped from top 157 to 86.87 today ,it that means us investor don’t like the th2?

[Arthur]

Thor's drop appears to be more about slowing caravan and RV sales
growth

[RTM]

I hope they have got this right !

https://finance.yahoo.com/news/th2-launches-first-edition-togo-180800900.html

[RTM]

Classic. Look where the van is placed on the road !
https://www.runswithtogo.com/

[Snow Leopard]

Togo is a country in Africa: https://www.cia.gov/library/publications/the-world-factbook/geos/to.html

Not sure why they would name an app after it :confused:

[simla]

Or more simply: Yay! Well done!

Releasing an app in Google and Apple is quite a long way down the road. Google Play : https://play.google.com/store/apps/details?id=com.runswithtogo.togo

And here's a description of it, and full of "Coming Soon"s in addition to what is already there. https://www.runswithtogo.com/rv-solutions And already with the all-important login. https://www.runswithtogo.com/togo-id

I'm always willing to applaud a NZ company getting somewhere with tech. Yes, I own some too.

[Leftfield]

Thanks for posting Simla. I think a lot of the recent drop in SP is due to the market not understanding the potential of THL's incursion into the digital realms. The potential is HUGE IMO.

Imagine THL being able to clip the ticket on ALL (or most)
- Trip planning
- RV Hire (the air bnb of RV's)
- RV ownership/maintenance
- Campground and RV site locations and bookings
- Tourist attractions on any given route

While I've recently reduced my holding to apply the gains elsewhere, I still hold about 10% of my portfolio in THL and am v happy to continue holding.

[arc]

the th2’s partner , Thor Industries inc, the SP dropped from top 157 to 86.87 today ,it that means us investor don’t like the th2?

The 150+ range was back in January, most companies seem to be either trending down or perhaps sideways since then.
Nervousness about the emergent global trends and "playing safe"... ma and pa being more cautious with their hard earned $

I agree with LeftFields comment on the role of technology, there is potential for boosting the "image"

and

https://finance.yahoo.com/news/thor-tho-acquire-erwin-hymer-133301917.html

[minimoke]

Thanks for posting Simla. I think a lot of the recent drop in SP is due to the market not understanding the potential of THL's incursion into the digital realms. The potential is HUGE IMO.

Imagine THL being able to clip the ticket on ALL (or most)
- Trip planning
- RV Hire (the air bnb of RV's)
- RV ownership/maintenance
- Campground and RV site locations and bookings
- Tourist attractions on any given route

While I've recently reduced my holding to apply the gains elsewhere, I still hold about 10% of my portfolio in THL and am v happy to continue holding.PushPays SP went mental on the back of their ticket clipping app. Get a few runs on the board and THL could be rocketing off as well.

[sb9]

Thanks for posting Simla. I think a lot of the recent drop in SP is due to the market not understanding the potential of THL's incursion into the digital realms. The potential is HUGE IMO.

Imagine THL being able to clip the ticket on ALL (or most)
- Trip planning
- RV Hire (the air bnb of RV's)
- RV ownership/maintenance
- Campground and RV site locations and bookings
- Tourist attractions on any given route

While I've recently reduced my holding to apply the gains elsewhere, I still hold about 10% of my portfolio in THL and am v happy to continue holding.

Well said lf, as always :)

[Pricey]

The explanation of Togo is worth a little bit of movement, I think.

"In 1925, a diphtheria outbreak spread among the children of Nome, Alaska. Due to the subzero temps, the town was only accessible by land. Dog sled teams were used to deliver serum from Anchorage to Nome. Togo the sled dog ran 265 miles of the 350-mile journey. Everyone said he was a VERY good boy! We were inspired by Togo's intelligence, endurance, and drive to lead the pack. Think of Togo as an RVer's best friend, running alongside you while you're out on the road!"

[Brain]

And there was I thinking that it just meant TO GO somewhere. Nothing more nothing less.

[pg0220]

And there was I thinking that it just meant TO GO somewhere. Nothing more nothing less.

Fair guess!

[sb9]

Expecting some action today being last before it goes ex-div on Monday.

[winner69]

The downtrend from 680 odd to nearly 500 is well and truly over

Amazing nearly 20% increase in last week or so

That big acquisition must be going to be announced very soon

[RTM]

The downtrend from 680 odd to nearly 500 is well and truly over

Amazing nearly 20% increase in last week or so

That big acquisition must be going to be announced very soon

By THOR of THL ?;)

[winner69]

By THOR of THL ?;)

Who knows

But punters would prefer a big thl announcement

[Snow Leopard]

The downtrend from 680 odd to nearly 500 is well and truly over

Amazing nearly 20% increase in last week or so

That big acquisition must be going to be announced very soon

My log chart says the down trend is still on. :(

My software moved it from the Red Zone to the Orange Zone yesterday. :)

[kiora]

Here is a pointy up thingy
https://www.tradingview.com/symbols/NZX-THL/technicals/

[winner69]

My log chart says the down trend is still on. :(

My software moved it from the Red Zone to the Orange Zone yesterday. :)

Suppose I was preempting a close over 585 today, being the previous low high

[oldtech]

My log chart says the down trend is still on. :(

My software moved it from the Red Zone to the Orange Zone yesterday. :)

Out of interest, what software do you use if you don't mind me asking?

[carrom74]

I am sceptical with the current SP. With current fuel prices and airfares rising... the $50M profit projected profit in 2020 sounds a bit far stretched.

Forbar thinks yes but FNZC think no....

Monday's pricing is the key when THL goes Ex-Div

[Snow Leopard]

Out of interest, what software do you use if you don't mind me asking?

Tiger Stocks :t_up:

Initially created over ten years ago during a lull in work:
[Boss: you seem really busy, I thought you had no projects on at the moment?
SL: I doing a homer.]
now on it's second major iteration, with planning for the next level of sophistication under way (and has been for several years).

A test bed for new software paradigms, coding ideas and fanciful data analysis, Tiger Charts is able to draw strange conclusions by mangling vast quantities of financial data.

Tech Support for it is terrible.

[oldtech]

Tiger Stocks :t_up:

Initially created over ten years ago during a lull in work:

now on it's second major iteration, with planning for the next level of sophistication under way (and has been for several years).

A test bed for new software paradigms, coding ideas and fanciful data analysis, Tiger Charts is able to draw strange conclusions by mangling vast quantities of financial data.

[B]Tech Support for it is terrible.

:D Heh, my wife says the same about the computer built by oldtech enterprises ...

[Patient Panda]

I am sceptical with the current SP. With current fuel prices and airfares rising... the $50M profit projected profit in 2020 sounds a bit far stretched.

Forbar thinks yes but FNZC think no....

Monday's pricing is the key when THL goes Ex-Div


On historical standards airfares are dirt cheap. Kiwi dollar is also relatively low.

[minimoke]

With a "has decided to pursue new opportunities elsewhere" the CFO is off to other pastures.

[Beagle]

http://www.scoop.co.nz/stories/PA1809/S00365/visitor-levy-to-raise-80-million-to-future-proof-tourism.htm

What's another $35 when a good full sized campervan is about $3,000 a week in summer. Nobody will care, or will they ?

[Filthy]

that could mean almost anything. I read it more as mark being sick and has decided to take some r&r. wish him the best

[minimoke]

http://www.scoop.co.nz/stories/PA1809/S00365/visitor-levy-to-raise-80-million-to-future-proof-tourism.htm

What's another $35 when a good full sized campervan is about $3,000 a week in summer. Nobody will care, or will they ?Probably not - though theres $450 in GST there already

[Beagle]

$3,000 x 3 / 23 = $391.30 but yes your point is well made.

[iceman]

that could mean almost anything. I read it more as mark being sick and has decided to take some r&r. wish him the best

They recently delayed release of their financials due to staff "illness issues". I think we can safely assume that was Mark who obviously has been quite sick. Probably wants to fins something smaller and less stressful. I wish him the best and thank him for a job well done.

[Patient Panda]

http://www.scoop.co.nz/stories/PA1809/S00365/visitor-levy-to-raise-80-million-to-future-proof-tourism.htm

What's another $35 when a good full sized campervan is about $3,000 a week in summer. Nobody will care, or will they ?


Doubt they will care one bit.

NZ is already a free visa on arrival. Plenty of other countries charge $30+ just for the visa. Once you explain its for the environment I’m sure everyone will be very happy to contribute :)

[minimoke]

Dividend Reinvestment strike price set at $5.283. Shares traded yesterday at $5.36

[Justin]

It’s time to catch knife now?

[Jonboyz]

It’s time to catch knife now?

I'm catching it if it hits around $5.00

[Sideshow Bob]

I'm catching it if it hits around $5.00

Lower dollar has to help as well.....whether more tourists or just gouging harder??

[BlackPeter]

http://www.scoop.co.nz/stories/PA1809/S00365/visitor-levy-to-raise-80-million-to-future-proof-tourism.htm

What's another $35 when a good full sized campervan is about $3,000 a week in summer. Nobody will care, or will they ?

Actually - make this $140 for a family of 4 (or more ...). These fees do add up.

Quite unfair as well that Ossies and Pacific Islanders are treated differently. No cr*p-tax for them, they are allowed to stay free loaders. Why?

[Leftfield]

Dividend in the bank..... comforting in the current market.

[sb9]

Dividend in the bank..... comforting in the current market.

I got more shares thro' DRP, nice...

[minimoke]

Dividend Reinvestment strike price set at $5.283. Shares traded yesterday at $5.36With SP now at $4.96 these Divi reinvestment plans may not really be the best option.

[sb9]

With SP now at $4.96 these Divi reinvestment plans may not really be the best option.

Might look different in a months time..

[minimoke]

Might look different in a months time..Probably will. Good thing is I cant go out and buy anything - so the divi is well locked in.

[Leftfield]

With SP now at $4.96 these Divi reinvestment plans may not really be the best option.

That's my thinking...... another option is to use the $'s for some other bargains that crop up at times like this. Nice to have options and not be 'locked in.'

[Justin]

real P/E around 17 with current SP

[winner69]

real P/E around 17 with current SP

That’s still pretty high eh

[Justin]

That’s still pretty high eh
Especially with furture earning downgrade

[iceman]

Especially with furture earning downgrade

Have you got a link to material on "future earning downgrade" ?

[winner69]

Have you got a link to material on "future earning downgrade" ?

I think Justin is referring to that statement of thl’s that F19 earnings will be lower than F18 because of the investment needed in that new digital initiative

The announcement of the new acquisition can’t be far off .....needed badly to get share price back on track

[iceman]

Do you mean this from the CEO winner ?:
“The creation of TH2 would be the highlight of the year, given the potential of this business. We have made the decision to invest in this business in FY19 to create an even better product and to develop the market faster. We will invest around $15M NZD into the business (thl share).
The outlook for the FY19 result is difficult to determine, given the number of activities under way at present. We will provide more guidance at the Annual Meeting in October.”

Or maybe this from the Chairman:
“We intend making this transition while maintaining a positive income distribution policy, but the focus is on global growth, which requires reinvestment, and there will be times of consolidation to create and execute on the global platform. thl has substantive global opportunity in this context and this is the next chapter in our story.”

I can not see an "earning downgrade" in any recent announcements from THL. For me the announcements are positive. I suppose its a glass half full or half empty question !

[simla]

Results Presentation FY 18, p44 http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/THL/322893/285512.pdf

"Profit Guidance
We expect the core business to show
growth in revenue and EBIT in the FY19
year.
This will be offset by the losses incurred
with the investment in TH2, which will be
circa $15M NZD before tax for thl’s 50%
share. This will directly impact the P&L in
FY19, but is seen as creating future value
for thl.
There is a potential one-off tax liability (as
referred to at the 2017 Annual Meeting),
which has not yet been determined in
terms of quantity or certainty.
With a number of M&A and business
changing activities still underway in the
business, we believe it is prudent to wait
until the Annual Meeting in October to
review the forecast position for the
Company."

It is somewhat ambiguous. I might read that as there will be extra depreciation, but it might be direct cost.

Also, p43 "CAPITAL EXPENDITURE FY19
There is a number of open decisions in the business, and potential M&A activity,
which will have an impact on the financial direction of the business for the year
from a capital expenditure perspective. We have options available for additional
fleet investment in various parts of the world, which have not yet been finalised.
As an indicative guide only, we would expect a baseline capital fleet expenditure
in the range of $190-230M. We expect fleet sales proceeds to be in the range of
$145-165M; again, depending on the options taken for total fleet increases.
We expect to be able to provide more detailed information at the Annual Meeting
in October."

And p6, "SUMMARY OF thl’S POSITION
• Strong profit growth year after year.
• Very strong balance sheet within our
industry (Net Debt:EBITDA of 1.9x).
• Very strong dividend flows and growth
(27cps – up 29%).
• Disciplined asset management and
ROFE performance (ROFE of 15.8%).
• Strategically positioned for growth.
• Investing smartly in new business models."

I don't really read that as being bad myself?

[minimoke]

Currently at $5.12 off a 12 month high of $6.89. Whats happened to that take over chat?

[nocomment]

i thought theyd be riding high on a weak nzd?

[winner69]

I don't really read that as being bad myself??


What Justin was referring to was that that $15m investment in digital means F19 earnings will be less than F18 ....which could mean share price might struggle



But once the acquisition is announced the merry go round will start up again and the share price will go to another level

[Justin]

i thought theyd be riding high on a weak nzd?
weak nzd means higher pertol or diesel

[pg0220]

weak nzd means higher pertol or diesel
But it also means tourists will find NZ an attractive country to travel as they can get more NZDs, doesn't it?

[Justin]

But it also means tourists will find NZ an attractive country to travel as they can get more NZDs, doesn't it?
Agreed，everything has two sides

[Justin]

Results Presentation FY 18, p44 http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/THL/322893/285512.pdf

"Profit Guidance
We expect the core business to show
growth in revenue and EBIT in the FY19
year.
This will be offset by the losses incurred
with the investment in TH2, which will be
circa $15M NZD before tax for thl’s 50%
share. This will directly impact the P&L in
FY19, but is seen as creating future value
for thl.
There is a potential one-off tax liability (as
referred to at the 2017 Annual Meeting),
which has not yet been determined in
terms of quantity or certainty.
With a number of M&A and business
changing activities still underway in the
business, we believe it is prudent to wait
until the Annual Meeting in October to
review the forecast position for the
Company."

It is somewhat ambiguous. I might read that as there will be extra depreciation, but it might be direct cost.

Also, p43 "CAPITAL EXPENDITURE FY19
There is a number of open decisions in the business, and potential M&A activity,
which will have an impact on the financial direction of the business for the year
from a capital expenditure perspective. We have options available for additional
fleet investment in various parts of the world, which have not yet been finalised.
As an indicative guide only, we would expect a baseline capital fleet expenditure
in the range of $190-230M. We expect fleet sales proceeds to be in the range of
$145-165M; again, depending on the options taken for total fleet increases.
We expect to be able to provide more detailed information at the Annual Meeting
in October."

And p6, "SUMMARY OF thl’S POSITION
• Strong profit growth year after year.
• Very strong balance sheet within our
industry (Net Debt:EBITDA of 1.9x).
• Very strong dividend flows and growth
(27cps – up 29%).
• Disciplined asset management and
ROFE performance (ROFE of 15.8%).
• Strategically positioned for growth.
• Investing smartly in new business models."

I don't really read that as being bad myself?

“We expect the core business to show
growth in revenue and EBIT in the FY19
year.
This will be offset by the losses incurred
with the investment in TH2, which will be
circa $15M NZD before tax for thl’s 50%
share. This will directly impact the P&L in
FY19”

It means FY19 EPS will not look good compare to FY18 about 30 cents per share

[iceman]

Very hard to know what to expect as their statement can and obviously is being read and understood quite differently. I hope the AGM will clear things up and I hope and expect to hear of a growth acquisition being completed

[Leftfield]

While I like THL and it has been a good investment for me, the TA chart is not looking great, death cross and all. I've taken my dividend, halved my holding, cashed up gains waiting for more news before deciding how to play it.

(At current prices my remaining shares show a 40% gain so hopefully 'well positioned.')

[iceman]

While I like THL and it has been a good investment for me, the TA chart is not looking great, death cross and all. I've taken my dividend, halved my holding, cashed up gains waiting for more news before deciding how to play it.

(At current prices my remaining shares show a 40% gain so hopefully 'well positioned.')

Pretty much same situation here Left Field

[simla]

It means FY19 EPS will not look good compare to FY18 about 30 cents per share
Yes, it depends how that affects the share price, since that is quite a bit.

(a) Will it actually affect cash flow and the dividends in particular? Would they have increased the dividend just now if they thought they could use that cash to smooth over reduced dividend next time? I did not read the FY18 presentation as warning that the dividend will fall as a result? And in any case the following dividend is not forecast to be affected either way?

(b) And they are still talking an npat of $50m in 2020 (presentation p7 28 Aug)

Are those two points the ambiguity - that we know the profit will fall, but we do not know how that might affect the value of the shares in the shorter term? If so then the current share price volatility is people guessing how the market will react in such circumstances of both good news and bad news at the same time while combined with fine outlook for the following period?

It all seems very overdone to me, but that's just where I'm sitting. Maybe I'm missing something.

[Justin]

Too many uncertainty make the SP volatility recently, even the FCNZ and Forsyth Barr think different

[winner69]

Yes, it depends how that affects the share price, since that is quite a bit.

(a) Will it actually affect cash flow and the dividends in particular? Would they have increased the dividend just now if they thought they could use that cash to smooth over reduced dividend next time? I did not read the FY18 presentation as warning that the dividend will fall as a result? And in any case the following dividend is not forecast to be affected either way?



Simla — thl have never been shy to increase borrowings over the years to keep paying increased dividends ...free cash flow hasn’t covered dividends

[simla]

Yes, I've heard you on that one. Fair point. But I wonder what effect it will have on the share price if in fact they do not actually reduce the dividend and they are still looking to a sunny future. It seems to me that the market is running away faster than really is justified on any real logic?

[Scrunch]

Yes, I've heard you on that one. Fair point. But I wonder what effect it will have on the share price if in fact they do not actually reduce the dividend and they are still looking to a sunny future. It seems to me that the market is running away faster than really is justified on any real logic?

I'm with you on that one. The market capitalisation of THL has declined by about $200m since the end of June. Even if the $15m investment is repeated for a few years before being confirmed as a complete dud (which isn't what I'd expect to happen), it doesn't warrant a hit this large to the share price. Either Mr Market has got it wrong or its something other than this $15m expensed investment that's altering the share price.

Also, part of the reason why operational cashflow figures are weaker than you would normally expect is that rental vehicles purchases and sales are reported as operational cashflow. If the fleet expands quickly, operational cashflow is poor. If the fleet is stable or contracted, operational cashflow returns to "normal" or äbove normal levels. This differs from many other industries where expansion / contraction in capacity is an investing cashflow.

If you look at PP&E less borrowing, this figure has typically been stable or increasing. The borrowing could be viewed as financing dividends. It can also be viewed as financing PP&E that occurs from growing the size of the business. Over the last five years, PP&E is up $140m and borrowing is up $87m. Intangible assets and investments in associates have also grown. I thought borrowing to expand scale was pretty normal in many industries.

[couta1]

Mr Market suffers from Schizophrenia, would you trust an individual suffering from that condition to always get things right?

[winner69]

I'm with you on that one. The market capitalisation of THL has declined by about $200m since the end of June. Even if the $15m investment is repeated for a few years before being confirmed as a complete dud (which isn't what I'd expect to happen), it doesn't warrant a hit this large to the share price. Either Mr Market has got it wrong or its something other than this $15m expensed investment that's altering the share price.

Also, part of the reason why operational cashflow figures are weaker than you would normally expect is that rental vehicles purchases and sales are reported as operational cashflow. If the fleet expands quickly, operational cashflow is poor. If the fleet is stable or contracted, operational cashflow returns to "normal" or äbove normal levels. This differs from many other industries where expansion / contraction in capacity is an investing cashflow.

If you look at PP&E less borrowing, this figure has typically been stable or increasing. The borrowing could be viewed as financing dividends. It can also be viewed as financing PP&E that occurs from growing the size of the business. Over the last five years, PP&E is up $140m and borrowing is up $87m. Intangible assets and investments in associates have also grown. I thought borrowing to expand scale was pretty normal in many industries.

Scrunch ...how long do thl keep a new van before reselling it?

Isn’t a big part of their business buying/making vans and then selling them?

Aren’t van more a ‘cost of sale’ rather than capex (like industry plant with many years of expected life)

[winner69]

Mr Market suffers from Schizophrenia, would you trust an individual suffering from that condition to always get things right?


Not really ...just that Mr Market gets over excited at times and then reality hits home


thl was never worth $6.80 odd and now is just falling back to a more reasonable level. (Just like ATM was never worth $14.62 or TRA worth $3.80 or HBL worth $2.15 ... spot the pattern)


Here's how I see it on a PE basis anyway


Desperately need that acquisition to be announced to get the merry go round going again ...ie get some excitment going

[simla]

Competing points of view are always the most useful. Thanks.

[Justin]

Not really ...just that Mr Market gets over excited at times and then reality hits home


thl was never worth $6.80 odd and now is just falling back to a more reasonable level. (Just like ATM was never worth $14.62 or TRA worth $3.80 or HBL worth $2.15 ... spot the pattern)


Here's how I see it on a PE basis anyway


Desperately need that acquisition to be announced to get the merry go round going again ...ie get some excitment going

what’s the reasonable P/E for thl?

[iceman]

[QUOTE=winner69;733748]Not really ...just that Mr Market gets over excited at times and then reality hits home


thl was never worth $6.80 odd and now is just falling back to a more reasonable level. (Just like ATM was never worth $14.62 or TRA worth $3.80 or HBL worth $2.15 ... spot the pattern)


Here's how I see it on a PE basis anyway


Desperately need that acquisition to be announced to get the merry go round going again ...ie get some excitment going[/QUOTEst


Thanks winner for the interesting chart

[Brain]

what’s the reasonable P/E for thl?

All depends on how fast you expect THL to grow. We need to look into the future which is a bit tricky.

[Justin]

Not really ...just that Mr Market gets over excited at times and then reality hits home


thl was never worth $6.80 odd and now is just falling back to a more reasonable level. (Just like ATM was never worth $14.62 or TRA worth $3.80 or HBL worth $2.15 ... spot the pattern)


Here's how I see it on a PE basis anyway


Desperately need that acquisition to be announced to get the merry go round going again ...ie get some excitment going

Hi Winner69 ，Why you think the new acquisition will get the merry go round going again? If it dose, Is that the good time to top up before AGM? Thanks

[Lewylewylewy]

Thl have grown lots but are always on a low pe for a growth company. I feel like the nature of the business is cyclic and people are forever waiting for it to suddenly turn the other way; hence the low pe.

Perhaps a good way to buy these is to buy a little every year so it doesn't matter if they drop back... averaging up, but always below the current SP. Of course it takes an investor mindset to not worry about drops in the value of your holdings.

Im still in two minds about whether such acceptance is a good thing or not.

[winner69]

Net migration is falling and the government want it to fall faster.

This is an interesting insight from my mate Rodney -

“It probably isn't a coincidence that net tourism and net migration have started to fall at roughly the same time much as occurred after the previous booms in the first half of the 2000s. It seems that around the same time the permanent net flow of people turns up or down the temporary flow driven mainly by tourists does the same. As covered in our housing and building reports there are good reasons for expecting further sizeable downside in net migration. By implication that implies that net tourism will probably fall further ......”

http://www.sra.co.nz/pdf/TourismThreatOct17.pdf

[winner69]

Thl have grown lots but are always on a low pe for a growth company. I feel like the nature of the business is cyclic and people are forever waiting for it to suddenly turn the other way; hence the low pe.

Over the last few years thl’s pe has been around 20 and in line with eps growth so I wouldn’t say it’s been on a low pe

Drifting down to a more reasonable level for a cash hungry company which doesn’t make much in the way of excessive returns on capital employed.

Desperately need to announce that acquisition and make up another big target for 2021 to get the merry go round going round again.


If one reckons that might be forthcoming at the AGM then buying early next week could be worth a punt.

[Valuegrowth]

I don’t see both Australia and New Zealand as top visiting countries in the Asia pacific region being some of the cleanest countries in the world. It looks like they are visiting countries for different reasons. Countries like China, Thailand, Malaysia, Hong Kong and Japan attract over 24 million visitors annually. According to NZ Stats a record 3.82 million visitors stepped onto New Zealand shores in the March 2018 year. Could New Zealand and Australia also target over 20 million visitors annually in the long run?

https://www.ranker.com/list/world_s-cleanest-countries/eco-warrior-chick

[sb9]

https://www.nzx.com/announcements/325655

TOURISM HOLDINGS LIMITED (thl)
thl Announces Possible Sale of Some Tourism Businesses
thl has cause to believe that confidentiality may not have been maintained whilst in discussions with third parties on the possible sale of some of the tourism businesses within thl’s portfolio.
thl is in discussions regarding the Kiwi Experience business and some of the Discover Waitomo businesses, including Black Water Rafting, Ruakuri and the Waitomo Homestead.
The Waitomo Glow Worm Caves business is not included as an asset for sale.
The discussions are incomplete and, if they progress to a definitive transaction, we expect to be able to provide more information during November or December.
END

[Leftfield]

https://www.nzx.com/announcements/325655

TOURISM HOLDINGS LIMITED (thl)
thl Announces Possible Sale of Some Tourism Businesses
thl has cause to believe that confidentiality may not have been maintained whilst in discussions with third parties on the possible sale of some of the tourism businesses within thl’s portfolio.
thl is in discussions regarding the Kiwi Experience business and some of the Discover Waitomo businesses, including Black Water Rafting, Ruakuri and the Waitomo Homestead.
The Waitomo Glow Worm Caves business is not included as an asset for sale.
The discussions are incomplete and, if they progress to a definitive transaction, we expect to be able to provide more information during November or December.
END



Desperately need that acquisition to be announced to get the merry go round going again ...ie get some excitment going

Hey Winner is today's announcement exciting enough for you!?
We could assume THL is cashing up either to a.) make an acquisition, or b.) compensate for underperformance, or c.) ploughing more money into their digital initiatives.)

[winner69]

Hey Winner is today's announcement exciting enough for you!?
We could assume THL is cashing up either to a.) make an acquisition, or b.) compensate for underperformance, or c.) ploughing more money into their digital initiatives.)

No not exciting .....just fine tuning the ‘portfolio’ I think

Hope it’s not your b) ...that would send share price down big time (though would not be entirely surprised)

[Pricey]

Seems like a sensible divestment to concentrate on their core RV business.

[winner69]

Share price sinks below 5 bucks .....back to where it was a year ago

What’s it worth on a PE of 12 ...maybe that’s where it’s heading .....a crash even lower

[Beagle]

FCNZ at $5...who does one believe ? Personally I'd back FCNZ's analysts over Forbar any day of the week.


Tricky thing for dogs and bears catching falling knives using just your claws, (so as to avoid bloodshed). Almost inevitably you slice some of your paw pads and end up limping for quite a while afterwards. TA screams stay out. For mine, they have failed miserably to articulate how their investment in th2 will be earnings accretive. They introduced this into a JV with Thor, wrote the value up and engaged in highly creative accounting saying they'd made a profit. To add insult to injury they're now throwing money at it and who knows how deep that rat hole becomes ?
Show me one major IT project that's gone to plan in terms of cost and time...I think the risks are the cost blows right out and there's no tangible EPS from it.
I also think people have forgotten that tourism can be a cyclical industry...business confidence and now consumer confidence is hitting decade lows.

A far less risky strategy is to wait for the next up cycle, (whenever that may be) and buy into that. Sure it trades cum a nice divvy but this hound reckons paying divvies out of rising debt level's is a dangerous game. They're already 100 campers behind with their re-sales, how are they going to sell these expensive campers if business and consumer confidence is deep in the toilet ? Cash flow to be impacted further ?
And then to trump all these concerns there's the man himself who is doing his best to start a trade war with all and sundry including America's friends...that can't help tourism.

From September...things have got a lot worse since then and yes we have a winner, FCNZ are the ones who were right. FCNZ vs Forbar, talk about a mismatch lol
I think sales of excessive level's of stock of used campervans will be even more problematic now. I think this one has been in an uptrend for so long now that many investors have completely forgotten it was once regarded as a cyclical stock and it could well go back to being regarded as exactly that. Good quality campervans for hire are certainly NOT a cheap holiday option especially in the peak summer season. I think many will choose a cheaper holiday option in the current environment and I think buyers of good used campervans will be very thin on the ground given the prevailing market weakness, (a completely discretionary luxury purchase). I expect a considerable degree of further weakness.
I also think Rob Campbell has too much on his plate now for a man of his age.

[winner69]

Beagle ...they desperately need to announce an acquisition and a new target like 75m profit in 2021 ...otherwise the share price will sink a lot further

[Beagle]

Beagle ...they desperately need to announce an acquisition and a new target like 75m profit in 2021 ...otherwise the share price will sink a lot further
As you've quite correctly pointed out THL has taken on serious debt in recent times and that works fine provided everything is going well but I suspect they're more than a little keen to sell off those "non core operations" (Actually I really like the diversity they add to the business model), to get their debt down a fair bit.
At this stage I don't think they're in a position to make a sizeable acquisition due to their debt burden. Throwing mega millions down a technology (rat hole ?), is doing "wonders" for the share price isn't it !

I really do think that many have forgotten that a relatively expensive campervan holiday is an entirely discretionary purchase, unlike domestic and some international air travel which isn't necessarily discretionary to nearly the same extent. Could this go down to the same or lower PE than AIR if the economic and market s@#% really hits the fan ? Then if we get a serious PE contraction back to what's more normal for a cyclical stock along with a serious earnings contraction, my goodness the downside could be quite considerable !

[couta1]

Looks like Winner and Beagle have taken up the doom and gloom mantle whilst bull is away on holiday.Lol

[Justin]

why there are no buyer？ close to agm soon:mellow:

[Justin]

Beagle ...they desperately need to announce an acquisition and a new target like 75m profit in 2021 ...otherwise the share price will sink a lot further

there are must really hard to predict the profit on TH2

[Beagle]

Looks like Winner and Beagle have taken up the doom and gloom mantle whilst bull is away on holiday.Lol

Cautious Beagles know that when its raining you stay in your kennel :)

[winner69]

why there are no buyer？ close to agm soon:mellow:

......maybe cos not many think it’s a bargain anymore (ie too many risks for an already over valued stock)

[Leftfield]

Pretty glad I locked in gains and cashed up (post 2912). Watching with interest. Still not looking promising from a T/A perspective irrespective of the AGM (and general market sentiment.) Good time to boost cash holdings IMO.

[winner69]

......
Then if we get a serious PE contraction back to what's more normal for a cyclical stock along with a serious earnings contraction, my goodness the downside could be quite considerable !

Half cycles are fascinating

The current half cycle (earnings, PE expansion, price etc) has been going for so long most have forgotten what the other half of the cycle looks like .....and some/many on here may not have even experienced a full cycle

[Scrunch]

Beagle ...they desperately need to announce an acquisition and a new target like 75m profit in 2021 ...otherwise the share price will sink a lot further

I don't believe they need to announce an acquisition. What they do need to do is provide more clarity on the value proposition behind TH2 - what does its upside potential look like?
That's what I'm hoping for from the AGM.

re TH2, THL have done a fantastic first step by partnering with a significant player in the US RV market. There's about 10 million households owning a RV in the US so the target market for the product they are developing is about the same as every household in NZ and Australia. That's a pretty useful target market for either a subscription offering, or a free offering which gains its revenue from advertising associated services.

I was favourably surprised at the presence the TH2 JV had on the brands summary on page 3 of THOR's investor summary below, particularly considering that's a summary of a company with sales of US$8.3b last year. The average brand on the page needs to have had sales higher than the current market capitalisation of THL. DYOR
https://s21.q4cdn.com/991982067/files/doc_presentations/2018/10/10K-FY2018-Investor-Presentation-FINAL.pdf

[pg0220]

I don't believe they need to announce an acquisition. What they do need to do is provide more clarity on the value proposition behind TH2 - what does its upside potential look like?
That's what I'm hoping for from the AGM.

re TH2, THL have done a fantastic first step by partnering with a significant player in the US RV market. There's about 10 million households owning a RV in the US so the target market for the product they are developing is about the same as every household in NZ and Australia. That's a pretty useful target market for either a subscription offering, or a free offering which gains its revenue from advertising associated services.

I was favourably surprised at the presence the TH2 JV had on the brands summary on page 3 of THOR's investor summary below, particularly considering that's a summary of a company with sales of US$8.3b last year. The average brand on the page needs to have had sales higher than the current market capitalisation of THL. DYOR
https://s21.q4cdn.com/991982067/files/doc_presentations/2018/10/10K-FY2018-Investor-Presentation-FINAL.pdf

Thanks for the link Scrunch.

A couple of excerpts from Thor's presentation:
"
TH2's functionality will provide numerous revenue streams,including subscriptions, advertisements and commissions

Big Spring 2019Announcement: Deeper feature sets,paid premium version,more customization forconsumers, new OEMintegrations, andmore, more, more...
"

It would be nice if THL can keep shareholders updated with the progress on TH2.... I get a sense that this would be an excellent opportunity for THL to expand business in U.S., then possibly they can turn U.S. into the most contributing business segment..? Also then they can become less cyclical with Tasmania tourism...

[iceman]

Interesting readings thanks Scrunch.
Shows what a strong partner we have with us in TH2. I was not aware of their purchase of the biggest RV manufacturer in Europe, Erwin Hymer Group with sales of about USD 2.9 B which brings sales for THOR to over USD 11B and a strong balance sheet.

Getting TH2 technology connected to such huge players is great for us.
It is very interesting to read how fast the RV market is growing in the US. 6 million new households have started camping since 2014 and millennials already make up 37% of RV users and half of them "none white" so " The massive influx of younger, more diverse campers is building the momentum for camping becoming an established part of the North
American lifestyle".
The fact that RV users are becoming younger and much more diverse has large growth potential for technology services for the industry as this generation want everything done in an app, including holiday planning, vehicle maintenance etc etc.

I sincerely hope THL will start properly updating and informing us about this JV at the AGM and beyond.

[Justin]

But our strong partner THO share price dropped more than half since its peak usd157 to usd67.08 in this year.

[winner69]

Was having a coffee with an acquaintance who knows a bit about ‘ecosystems’ like what TH2 have

He reckons once fully up and running thl could potentially be booking up to $150m as their share of revenues in next to no time (like 2 to 3 years) as momentum builds ....and these things are pretty high margin.

We’ll see eh

Be good if thl got valued as a tech company with multiples of sales......its only worth $4.50 or less as a hire company and RV dealer.

[BlackPeter]

Be good if thl got valued as a tech company with multiples of sales......its only worth $4.50 or less as a hire company and RV dealer.

Maybe not so good in the current climate of PE deflation for tech companies?

The other issue might be - while big software projects are always expensive, only some of them are successful. The majority of big software projects is only expensive but do not deliver. What particular competences does THL have to run one of the successful ones? Are they all software whizzes who just rented out RV's for a moonlight job? What's plan B for THL if TH2 does what most big software projects do?

[winner69]

Maybe not so good in the current climate of PE deflation for tech companies?

The other issue might be - while big software projects are always expensive, only some of them are successful. The majority of big software projects is only expensive but do not deliver. What particular competences does THL have to run one of the successful ones? Are they all software whizzes who just rented out RV's for a moonlight job? What's plan B for THL if TH2 does what most big software projects do?

BP ....it’s all about reimagining the RV experience mate.....a new ecosystem. We old fuddy duddies will never grasp that sort of concept.

I’m sure the TOGO people are competent at such things ....at least Thor and thl hope they are giving whizz kids heaps of money to play with

[BlackPeter]

BP ....it’s all about reimagining the RV experience mate.....a new ecosystem. We old fuddy duddies will never grasp that sort of concept.

I’m sure the TOGO people are competent at such things ....at least Thor and thl hope they are giving whizz kids heaps of money to play with

Sounds all amazing. Like the idea and the concept. And the best thing is ... it's not my money they are playing with :)!

[hotshothendo]

Some large one off trades yesterday.

[simla]

A write-up on newsroom. It doesn't say anything new but is an accessible version of the situation maybe. https://www.newsroom.co.nz/@boardroom/2018/10/29/297504/why-tourism-holdings-is-getting-out-of-tourism

[peat]

yeh interesting Simla.
Weird that he openly admits he is selling some of the highest return companies in the business.
But does give a better insight into the vision of the tech side they are moving into. And he suggests....
"it’s not impossible - maybe even likely - that the company could one day make as much money from its low-capital-intensive digital businesses as it does from its capital-intensive motorhomes. "

[simla]

He also says, "Embrace digital change and change your customer offering. But do it without losing focus on the core.” So the digital thing is a hope but they are not throwing the baby out with the bathwater.

[winner69]

yeh interesting Simla.
Weird that he openly admits he is selling some of the highest return companies in the business.
But does give a better insight into the vision of the tech side they are moving into. And he suggests....
"it’s not impossible - maybe even likely - that the company could one day make as much money from its low-capital-intensive digital businesses as it does from its capital-intensive motorhomes. "

Note he said motorhomes business is ‘capital intensive’ ....some on here don’t think it is ‘from a cash flow perspective’

[winner69]

Good communication that article

Just shows a conversation is far better than an awesome slide show

Hope he carries on this way ,... starting at the agm

[simla]

I'm not sure the market is in the mood for anything except short term good news. But there may be some of that anyway.

[sammiesmiles]

any good/bad insights from the shareholder meeting today?

[Sideshow Bob]

any good/bad insights from the shareholder meeting today?

Even a morning tea report??

[simla]

Company basically upbeat despite share price. Acknowledged nobody likes a falling share price but did not think it was justified. Happy with their outlook.

Dividends continue next year. th2 still thought likely to be great idea. Moving assets to global focus away from NZ over time as NZ cannot continue to provide long term growth.

Said it is all about looking to the future and these investments make sense but should not impact on short term results for shareholders too much.

Or that's what I heard anyway.

[sb9]

Company basically upbeat despite share price. Acknowledged nobody likes a falling share price but did not think it was justified. Happy with their outlook.

Dividends continue next year. th2 still thought likely to be great idea. Moving assets to global focus away from NZ over time as NZ cannot continue to provide long term growth.

Said it is all about looking to the future and these investments make sense but should not impact on short term results for shareholders too much.

Or that's what I heard anyway.

Concur all that, short term bit of patience, medium term not too bad, long term very positive.

[winner69]

Jeez — Rob Campbell reads the same stuff as I do T breakfast time —

Grant and I have spent some time discussing how best to portray the strategy on which we are engaged in thl. Reading early this morning, I discovered a new study released by Boston Consulting Group and Fortune which identifies the key things which distinguish companies which are both established and manage to thrive in a changing market. They describe this characteristic as “vitality” and quote the novelist F Scott Fitzgerald as saying “vitality shows not only in the ability to persist but the ability to start over”. That captures what we are trying to do.

As Bon Jovi said ‘keep the faith’ .....but at least Rob said something big about to happen ....one day ....so let’s hope the market builds this into the share price and don’t worry about short term declining profits and stretched cash flows

[minimoke]

Shame they aren't heeding the "diversity" cry. Only one white male on the board by the looks of it. No cries of "Over representation of stale pale female"?

[winner69]

Shame they aren't heeding the "diversity" cry. Only one white male on the board by the looks of it. No cries of "Over representation of stale pale female"?

Could be the reason they are doing so well after so many years of being a market pariah

[percy]

Could be the reason they are doing so well after so many years of being a market pariah

Yes Rob Campbell was the catalyst.
White male.
"The Power of One."

[simla]

th2 will create a $15m hit against profit before tax next year we were told with the 2018 results. But it seems possible that that comes from expensing development costs, though we cannot know that. You might therefore possibly take the view that the underlying profit might be increasing nicely if that was depreciated instead of expensed? Software is about the only major investment that often gets expensed instead of depreciated and maybe we should remember that if so?

[winner69]

Yesterday’s article posted here extract —

“The absolute worst case scenario is we’ve created a product that’s excellent for our customers........” .....and not too much in it for thl

[BlackPeter]

Not really following them these days, but just curious. My notes contain still a comment that the company targeted for 2020 $50m NPAT (which would be 43 cents per share). This target looked already optimistic before THL decided to sink millions into TH2, and it was never shared by the analyst consenus.

Anybody knows what happened to this target? Am I right to assume that they didn't mention it in the recent AGM - did they?

[simla]

They said they are reviewing their future goals due to making a lot of changes lately, but had no reason to back away from that forecast presently.

[simla]

Probably an important part of the presentation was: p7 http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/THL/326075/289588.pdf

"Currently, we see potential M&A opportunities across the world. Although there are some opportunities for small additions in New Zealand, we consider this to be less likely given that we already have a strong presence. We also see small opportunities in Australia for acquisitions within our core business as well as in adjacent businesses. Looking further in the world, we are also exploring opportunities within the USA and the UK.

We also keep a close eye on markets across the globe that we don’t currently operate in, but that are experiencing strong RV sector growth such as Europe, Canada and China. We are considering greenfield development, partnerships and acquisitions as the methods of entry.

Beyond M&A activity, we consider that there are still further growth opportunities in the jurisdictions that we operate in today. We will continue to take advantage of those opportunities by leveraging all aspects of the RV eco-system and continuing to implement our core business model of building, renting and selling to maximise the value we get from each RV."

It seems likely that the sale of assets recently mentioned are to go in that direction at a guess?

[forest]

Not really following them these days, but just curious. My notes contain still a comment that the company targeted for 2020 $50m NPAT (which would be 43 cents per share). This target looked already optimistic before THL decided to sink millions into TH2, and it was never shared by the analyst consenus.

Anybody knows what happened to this target? Am I right to assume that they didn't mention it in the recent AGM - did they?

Yes the target has slightly changed as I understand it, to $50m NPAT from continuous operations. We just do not know at present which operations will be sold of and which might be added in 2020. So depending on the profitability of what gets sold or added their is likely an adjustment. That is my understanding.

[simla]

Definitely worth noting too in the presentation: http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/THL/326075/289586.pdf

• Carbon Footprint down 3.4% across Australian and NZ operations
• 10 electric campervans expected on fleet in December
• Waste-to-landfill down 11% in Australian and NZ businesses

How many other companies actually walk the walk? Wow.

[sammiesmiles]

Definitely worth noting too in the presentation: http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/THL/326075/289586.pdf

• Carbon Footprint down 3.4% across Australian and NZ operations
• 10 electric campervans expected on fleet in December
• Waste-to-landfill down 11% in Australian and NZ businesses

How many other companies actually walk the walk? Wow.

sigh... normally when companies are not performing as expected, they would like to tell people they are doing good jobs in social responsibility.....

[Leftfield]

I've been a fan of THL but took more gains off the table yesterday and am now holding only a token amount. I suspect THL is going to track sideways or drift further south until we see revenue gains from the digital initiatives or progress with acquisitions. Watching T/A carefully.
JMHO. DYOR.

[Arbroath]

I'm quite happy with THL's progress on npat. If you look at the FY2019 forecast of NZ$32-34m and add back the expensing of the TH2 investment then the adjusted forecast is more like NZ$43-44m up from NZ$37.5m in FY18 and on track to the previous goal of NZ$50m in FY2020.

Adjusted PE is around 14x at $5.00 with EPS growth of 15-20% so PEG is under 1.00.

Obviously the TH2 investment complicates things but if we look at how well the Chair & CEO have executed the past 5 years, the partner they've got in the JV and the logical potential of the TH2 JV and the controlled investment profile of the JV then I think THL deserves the benefit of the doubt.

[tuaman]

sigh... Normally when companies are not performing as expected, they would like to tell people they are doing good jobs in social responsibility.....
oh my god you are on point.

[pg0220]

sigh... normally when companies are not performing as expected, they would like to tell people they are doing good jobs in social responsibility.....
Haha can't deny! From a perspective of maximising shareholders' wealth, don't think company being socially responsible is the least exciting to hear from them! But is Synlait not performing as expected either? (Carbon emission goal)

[winner69]

Yes Rob Campbell was the catalyst.
White male.
"The Power of One."

But Campbell only got 84% votes for being re-elected as Director (the other person nearly got 100%)

Maybe some instos agree with Beagle ...Campbell got too much on his plate and needs to cut back (think he mentioned age as well) and this is their way of saying so.

[forest]

But Campbell only got 84% votes for being re-elected as Director (the other person nearly got 100%)

Maybe some instos agree with Beagle ...Campbell got too much on his plate and needs to cut back (think he mentioned age as well) and this is their way of saying so.

I was at the AGM yesterday, I thought Rob Campbell gave a superb presentation. He seem to understand THL in detail and explained clearly the advantages of the change in direction. Yes there might be a (perceived) risk in the TH2 investment however there is also a risk of keeping the business model the same and not moving with the times.
I admire THL for constantly looking to improve the business.

About the 84% vote for Rob Cambells reelection, I think it is not higher for the reason that he had lots of undirected proxies (a sign that he has great share holders support) however the undirected proxies he was not allowed to vote in support of his own reelection. So they would have be counted as abstain. Ironic

[Justin]

But the sharesholder want superb earning guide

[forest]

But the sharesholder want superb earning guide

Yes Justin, thats right. It is hard to give earning guidance with a new business model attached to the established business.
But remember that the TH2 partners know this business segment very well. THL has a very healthy double digit ROFE ratio and the expectation is that TH2 will only improve this ratio.
The downside is that we get 1 or maybe 2 years of reduced profits because a lot of software development is able to be expensed rather than depreciated over a longer period. In the meantime THL will still be making good profits and pay dividends.

[Scrunch]

So it seams that THL has given forecast guidance for FY19 that is exactly half way between the FY18 result and the previously stated guidance of $50m NPAT. With no real change to the 2yr out guidance, I'm still struggling to see why the share price has been hit so hard by the updates of investing US$10m that will be expensed. Was the market expecting guidance that the target would be hit a year early?

My take on it:
As THL note, excluding abnormals gains booked on the creation of TH2, the FY18 result was $37.5m (Slide 12)

If you apply a technical 28% tax rate to the NZ$15m investment it decreases the profit by $10.8m. Add this back to the profit guidance of $32-$34m and it becomes $42.8 - $44.8m.

The mid-point in this range is $43.8m. Half the gap between $37.5m and $50.0m is $43.75 or with 1dp of rounding $43.8m.

So THL is forecasting $50m two years out, and that the 2019 underlying result will halve the gap between this forecast and reported actual results. Its good that they are not leaving a hockey stick result being required to close the gap to the forecast.

[iceman]

I'm with you forest and Scrunch.. The company has made a significant change in direction, as it has done several times in the last decade. Some of the commentators on here have been saying we are at the top of the cycle in the tourism industry and THL sp will be dropping a lot. They were right on the latter. But the same contributors also blast THL for selling out of these "top of the cycle" assets, that by the way are making us lots of money, which is reflected in the sale price.

THL has been very clear that their big investment in the technology for TH2 is being expensed, which of course will reduce profits in the next couple or few years. I prefer expensing it, rather than building up assets that are later written down, like many other companies. The sp has taken a big hit and people talk about the NZ$ 50m NPAT not being met. Well, that's probably true but are people not looking at the reasons why it may not be met. Like forest said above, the main business of THL is still humming along to fund this investment. We're even going to get our juicy divies by the looks of it from the main focus being our bread and butter business. In my view, they are selling out of "old times" businesses that are still very profitable, focusing on the main business which is "whole of RV experience", and spending money on new technology in the industry we want to be in.
SO to the detractors of THL on this thread, I say invest somewhere else where you understand the business better.

I've looked at what this TH2 thing is about and I really like it. A couple of years ago I invested in a "caravan" in a caravan holiday park in one of the biggest UK tourism operators (stationary caravans in a holiday park). Their communications and management is pathetic and I can't wait to get out of it in a couple of years. Why ? Because they are still doing everything on paper by mail. No millennials will join.

I'm also involved in a tourism business in Europe. In the last 4 years, we've seen "app bookings" go from 5% of our bookings to around 30%.

THL is flat out keeping up with that trend, heading in the right direction in my view, so I'm happy to keep THL as a significant part of my portfolio.I think some of the commentators on here are akin to troglodytes that do not understand how quickly the tourism business is moving and should stay out if it.

[Scrunch]

Some useful insights there iceman. However wider thoughts on THL are useful even, or particularly when they differ to your thinking. They can provide insight as to what may be prompting shareholders to sell and drive the price down when you may expect it to be increasing.

[Leftfield]

Scrunch, Iceman I appreciate your thoughts.

I've held roughly 10% of my portfolio in THL for some time. At present I have reduced this to 2%. I agree with your FA estimates re the future of THL and I also like the moves into the digital realm which at some stage have the potential to be a HUGE game changer for THL.

Over the next few weeks with the USA mid-term elections in mind, I'm happy to carry more cash and look at other investments. I think the THL SP market reaction to the recent meeting has been rather muted and from a T/A perspective there are some significant warnings in play indicating the SP is likely to drift sideways or even decline. I appreciate dividends help mitigate this trend, but I simply prefer stocks with both a rising T/A (and healthy dividends - if applicable.)

I've reduced my holding merely as a caution and I am not saying you are all wrong and I am right. I'm merely following my own personal investing guidelines which I freely admit are a bit 'left field.'

As always DYOR and make your own decisions.

[minimoke]

THL is flat out keeping up with that trend, heading in the right direction in my view, so I'm happy to keep THL as a significant part of my portfolio.I think some of the commentators on here are akin to troglodytes that do not understand how quickly the tourism business is moving and should stay out if it.You are totally spot on there.

Back in the day I travelled with a Lonely Planet paper book. That was it. Noting else

Nowadays the tourist travels with internet capable phones and tablets. You've got Tripadvisor, trivago, Uber (and Uber eats), instagram and countless number of other "apps" that make tourism a totally different experience. Jeez - in auckland and christchurch you can now even pick up a lime electric scooter for your sight seeing.

Having an RV is now just the tip of the potential tickets to be clipped

[BlackPeter]

THL is flat out keeping up with that trend, heading in the right direction in my view, so I'm happy to keep THL as a significant part of my portfolio.I think some of the commentators on here are akin to troglodytes that do not understand how quickly the tourism business is moving and should stay out if it.

I don't think anybody said that going with the times must be a bad thing. However - development of new technology is fraught with risks. Some developments clearly will be outrageously successful, others will bite the dust.

if you want to see the risks of overvaluing organisations just because they do the latest fad, look at the dot com bubble.

I guess THL added with their investment into TH2 more opportunities, but as well more risks to their portfolio - and latter in an area where they have no previous experience. Historically 2 out of 3 big software projects fail. Biggest risk is not that they just improve their clients experience (as some blue eyed posters seem to think), but that they screw it up without added income stream.

Market is just finding a way to price these additional risks in. No reason to attack people as cave dwellers who mention them ...

[Balance]

Some useful insights there iceman. However wider thoughts on THL are useful even, or particularly when they differ to your thinking. They can provide insight as to what may be prompting shareholders to sell and drive the price down when you may expect it to be increasing.

Sp has fallen a long way from the high of $6.85 reached in June this year so it is tempting to think that the worse is over.

A few observations:

1. The sp has been falling in advance of

i) news of negotiations to sell tourism assets &

ii) effectively a profit downgrade announced at the AGM - means there's insider information leaking out imo,

Playing field is not level.

2. First downgrade is never the last - they do come in threes,

3. This is the longest stretch (6 years) I have know THL to perform well and consistently since its days as The Helicopter Line way back in the 1990s - could 1 and 2 above signal that the at phase is over for this run?

4. Current sp is exactly where it was a year ago - so not as bad as it looks which means worse could be in the offing?

5. There were expectations of potential corporate activity after Citi took a stake. That looks unlikely now with the downturn in China equities and economy.

Prefer to be on the side lines at present - downgrades are not a risk I like to chance! Z Energy is a good example in recent times of how one downgrade begets another!

Happy to wait for review and goal reset before re-evaluating.

[winner69]

Sp has fallen a long way from the high of $6.85 reached in June this year so it is tempting to think that the worse is over.

A few observations:

1. The sp has been falling in advance of

i) news of negotiations to sell tourism assets &

ii) effectively a profit downgrade announced at the AGM - means there's insider information leaking out imo,

Playing field is not level.

2. First downgrade is never the last - they do come in threes,

3. This is the longest stretch (6 years) I have know THL to perform well and consistently since its days as The Helicopter Line way back in the 1990s - could 1 and 2 above signal that the at phase is over for this run?

4. Current sp is exactly where it was a year ago - so not as bad as it looks which means worse could be in the offing?

5. There were expectations of potential corporate activity after Citi took a stake. That looks unlikely now with the downturn in China equities and economy.

Prefer to be on the side lines at present - downgrades are not a risk I like to chance! Z Energy is a good example in recent times of how one downgrade begets another!

Happy to wait for review and goal reset before re-evaluating.

Some useful insights there Balance

I see the market currently trying to find a realistic price for the trad businesses less the profit impact of the businesses up for sale and factoring in a 2 to 3 year drag on profits that th2 will bring.....and potentially that price is lower than today’s price.


Like you Balance the time to really assess is when they come up with new acquisitions and a big 2 to 3 target .....the believers will get excited again and pile in and the thl share price will head to overvalued territory again.

[Arbroath]

I agree that downgrades come in three's or more but how is THL's forecast actually a downgrade. The target was $50m by FY2020.
Their forecast is effectively c. $43-45m for FY19 if they weren't expensing NZ$15m into the TH2 JV.

I find many investors fickle and too short-term focussed. THL could have delivered $44m or so this year and maybe the $50m in 2020 and said look at us, aren't we great. But when they do something they think is better medium-longer term with the business and expenses it all up front instead of capitalising & deprecaiting it they get hammered for it...

I've bougth more around $5.00 and am happy if others want to sell at these levels. The price action indicates no leaking - they said months back they'd contribute $15m to TH2 in FY19 and their profit targets would be reassesed because of it.





ii) effectively a profit downgrade announced at the AGM - means there's insider information leaking out imo,

Playing field is not level.

2. First downgrade is never the last - they do come in threes,

[Balance]

I agree that downgrades come in three's or more but how is THL's forecast actually a downgrade. The target was $50m by FY2020.
Their forecast is effectively c. $43-45m for FY19 if they weren't expensing NZ$15m into the TH2 JV.

I find many investors fickle and too short-term focussed. THL could have delivered $44m or so this year and maybe the $50m in 2020 and said look at us, aren't we great. But when they do something they think is better medium-longer term with the business and expenses it all up front instead of capitalising & deprecaiting it they get hammered for it...

I've bougth more around $5.00 and am happy if others want to sell at these levels. The price action indicates no leaking - they said months back they'd contribute $15m to TH2 in FY19 and their profit targets would be reassesed because of it.





ii) effectively a profit downgrade announced at the AGM - means there's insider information leaking out imo,

Playing field is not level.

2. First downgrade is never the last - they do come in threes,

Why there is a market of buyers and sellers! Isn't that great?