THL - Tourism Holdings

[BlackPeter]

Auckland rental car fleet up in flames, what a year for THL !

Well, yes, though can't stop wondering whether this is another problem for them or a potential solution to their problem?

[winner69]

Auckland rental car fleet up in flames, what a year for THL !

If insurance fronts up could be a blessing in disguise.

[winner69]

Well, yes, though can't stop wondering whether this is another problem for them or a potential solution to their problem?

Without casting aspersions on thl when things like this i always think of the financially stressed joiners who accidentally leave oily rags in the pile of sawdust when they go for the night.

Mechanics use the the same trick

[winner69]

On TRA thread they say it’s not thl things ablaze (or tra)

[King1212]

https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12361725

[winner69]

So it was thl

Insurance on case already

https://www.nzx.com/announcements/359142

[Not The Chosen One]

Approx 10 motorhomes destroyed out of 200 odd on site. Main building is a write off looking at footage on stuff - https://www.stuff.co.nz/national/300098220/nearly-20-fire-trucks-at-blaze-at-camper-van-business-in-south-auckland

[flyinglizard]

"It is a large building. Nearly 80 metres by 100 metres. There is campervans and various workshops and things inside the building," said Area Commander Auckland City Richard Twomey.
If the insurance fully covers the replacement value, then THL will get approximate $3,000x (100x80) = $ 24,000,000 insurance paid out for building plus equipment, 10 campervans.

Not sure who is the land owner, THL can shutdown that site directly and save some costs. The news said that they moved campervans to other site.

It is not that bad. They eventually will have large amount of cash.

[winner69]

"It is a large building. Nearly 80 metres by 100 metres. There is campervans and various workshops and things inside the building," said Area Commander Auckland City Richard Twomey.
If the insurance fully covers the replacement value, then THL will get approximate $3,000x (100x80) = $ 24,000,000 insurance paid out for building plus equipment, 10 campervans.

Not sure who is the land owner, THL can shutdown that site directly and save some costs. The news said that they moved campervans to other site.

It is not that bad. They eventually will have large amount of cash.

You sure they own the building?

Annual Report only mentions Waitomo under Land and Buildings

[flyinglizard]

You sure they own the building?

Annual Report only mentions Waitomo under Land and Buildings

If they do not own the building, then my above assumption is failed. They only have the paid out for 10 campervans, equipment and other things. They will shutdown the factory, maybe some job cuts. Anyway, I will hold and wait for the second announcement regards to the resolution of the insurance claim.

[Arthur]

A nice profit upgrade and debt below projected

[Sideshow Bob]

A nice profit upgrade and debt below projected

pdated FY20 guidance14/9/2020, 11:01 am MKTUPDTE14 September 2020
MEDIA | NZX RELEASE
TOURISM HOLDINGS LIMITED (thl)
UPDATED FY20 GUIDANCE
thl advises that it expects its underlying net profit after tax for the financial year ending 30 June 2020 (FY20) will be approximately $20 million. This compares to thl’s previous guidance range of $17.5 - $19.5 million, as released on 25 June 2020.
This underlying result excludes the impact from a number of one-off items, including the partial Togo exit undertaken in March 2020 which resulted in a one-off gain of $9.3M including tax and foreign exchange benefits, a one-off tax benefit of $1.1M in the USA and the write-off of $3.1 million of goodwill attributed to Kiwi Experience. thl’s FY20 statutory net profit after tax, which is inclusive of these one-off items, is expected to be approximately $27 million.
thl’s net debt (bank borrowings less cash and cash equivalents) as at 30 June 2020 was approximately $128 million. This compares to earlier expectations of net debt of approximately $133 million, as noted in thl’s market release on 31 July 2020. The variance was primarily attributable to the continued outperformance of vehicle sales, particularly in the United States.
thl will be releasing its financial results for FY20 on Friday, 18 September 2020.
ENDS

[flyinglizard]

very good communicator, clear and detailed guideline has been given, better than other company's announcements. Only need to concern goodwill for FY20 & FY21( fire accident damage) and vehicle sales for FY21. Go THL!

[winner69]

very good communicator, clear and detailed guideline has been given, better than other company's announcements. Only need to concern goodwill for FY20 & FY21( fire accident damage) and vehicle sales for FY21. Go THL!

Jeez they are only quoting from the report that's coming out in a day or so

Couldn't really call it 'guidance' - its what's going to be (and its only as at June 30th)

[iceman]

very good communicator, clear and detailed guideline has been given, better than other company's announcements. Only need to concern goodwill for FY20 & FY21( fire accident damage) and vehicle sales for FY21. Go THL!

It will be interesting to see how much of their profit is coming from their booming 2nd hand vehicle sales, which will need to be replaced at some stage in the future if all goes well.

[Beagle]

It will be interesting to see how much of their profit is coming from their booming 2nd hand vehicle sales, which will need to be replaced at some stage in the future if all goes well.

I've been sniffing around their so called great new Zealand campervan sale https://greatnzmotorhomesale.com/
I have yet to see anything that represents a really good buy.

[Arthur]

A tourism company with a PE of about 12 in the middle of a tourism crisis, there are worse places to be invested.

[Beagle]

What would their earnings be without truck loads of Govt support ?

[RTM]

Personally I am well pleased to have exited for a modest profit.

[Arthur]

What would their earnings be without truck loads of Govt support ?
I guess we will soon see, there aren't too many companies that haven't picked up the wage subsidy. They picked up some money for Waitomo Caves and some for quarantine operations. Next year could be when it hits the fan....

[Filthy]

https://www.nzx.com/announcements/359966 - impressive result in a tough environment...

[Lease]

It's amazing US RV sales are particularly strong. Net debts now have been down to only $75M. Excellent results.

[Waltzing]

"It's amazing US RV sales are particularly strong" travel across the US is considered safer in an RV rather than flying for your holidays.

[flyinglizard]

"It's amazing US RV sales are particularly strong" travel across the US is considered safer in an RV rather than flying for your holidays.

The USA vehicle sales business achieved revenue growth of 68% (in USD) in the last four months of FY20 compared to the pcp. I noticed that US sales

From annual reports, New Business Model


- not only Managed Facility in nz, THL achieves States Managed Facility in the United States.
- Mobile Offices (Maybe some used in US election campaign? how about NZ?)
- Mobile Diagnostics
- Remote Project and Seasonal Worker Accommodation


The highlights

- THL has strong PR with governments and agencies
- Quickly response to dramatic market environment change, thinking of how fast they decided to withdraw the investment in Togo.
- Quickly changed business strategy, from built-rent-sale to excessive sales of vehicles
- Quickly response to fire accident, the same day setup new site and temp office
- Transparency


Sad to say that, more mess that US has, more sales that THL will achieve. Maybe Americans more likely to visit family members in long haul by caravan than train or airplane during pandemic, and more likely they may use caravan to do a domestic travel, considering their caravan culture background.



1st July 2020 - 31th Aug 2020, Revenue of NZ increased by 119%, AUS by 65%, US by 167%, compared with FY2020. That is first month of FY21 !

Next tests would be

- fire accident assessment and insurance response
- Q1 FY2021 market updates if any
- NZ market sales target of 1500+

This one should be the leader of tourism sector recovery if they pass all tests.

[Waltzing]

"1st July 2020 - 31th Aug 2020, Revenue of NZ increased by 119%, AUS by 65%, US by 167%, compared with FY2020. That is first month of FY21 !"

share price should double on the last post alone!!! Cheers

DISC: sold out at its peak, re entered stock with a small position to trade.

[Southern Lad]

Jucy Rentals Australian and New Zealand rental assets and business has been sold to Polar Capital (Colin Neal) and David Cushing with the carcass (including Jucy Snooze, JucyCriuse, Jucy USA, Jucy UK, Your Drive and Lucky Rentals) being put into receivership. The Alpe's are off to do other things.

https://www.stuff.co.nz/business/123397179/jucy-rentals-business-calls-in-receivers-but-sale-of-brand-saves-150-jobs

While no doubt Jucy hasn't had access to capital over the years in the same way that THL as a listed company has, it does point to the THL board and management having done a good job to navigate 2020 as well as they have.

Polar Capital appears to have a penchant for acquiring businesses that have got into trouble (i.e. Smiths City). Presumably risky investments but the upside will be significant if they can turn the businesses around.

[Balance]

Sad commentary on the state of the tourism, travel & rental industry - have used Jucy on various occasions and thought they were good operators - fair price and good service.

[flyinglizard]

The low price rental caravan promotion from THL may have made the final kill to Jucy.

When we look back, THL business strategy change and Covid responses are outstanding.

THL back to $4 soon.

[winner69]

Suppose Thl have a few years to get rid of toiletless campervans

https://www.stuff.co.nz/travel/news/300161375/tourism-minister-to-ban-tourists-from-hiring-vans-that-are-not-selfcontained

[Waltzing]

CNBC this morning - RV Boom continues in the states with the supply chain broken... same goes for water recreation craft.. supply chain under pressure to supply.

[winner69]

Not out of woods yet

They say - FY21 result, based on current expectations, the loss for FY21 is expected to be greater than the average of the results projected by market analysts....which is a loss of $12.8m

Last year underlying npat was $20m


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/THL/365551/338049.pdf

[Beagle]

https://www.nzherald.co.nz/business/tourism-holdings-says-year-loss-will-exceed-128m-shares-sink/LB2E6JUWQBYU5K37N374ATLMEE/

Might be some good deals on hiring campervans in the March shoulder season when its not so hot and all the kids are back at school.

As far as I am concerned I think these guys have a much higher standard of campervans than THL and their prices are not unreasonable https://www.wilderness.co.nz/

[Arbroath]

https://www.nzherald.co.nz/business/tourism-holdings-says-year-loss-will-exceed-128m-shares-sink/LB2E6JUWQBYU5K37N374ATLMEE/

Might be some good deals on hiring campervans in the March shoulder season when its not so hot and all the kids are back at school.

As far as I am concerned I think these guys have a much higher standard than and their prices are not unreasonable THL https://www.wilderness.co.nz/

Just out of interest we had a 4-berth Britz booked for our recent South Island trip. Cost $179 a day which I was happy enough with. We cancelled for free a fortnight before the trip as our plans changed a bit and a campervan wasn't going to work. I checked the same booking a week before we went and it was only $125 a day. When we got to Chch and picked up our rental car in the next paddock there were hundreds of parked up Britz and Maui - looked a bit like the airplane boneyards in the desert...

[Beagle]

Just out of interest we had a 4-berth Britz booked for our recent South Island trip. Cost $179 a day which I was happy enough with. We cancelled for free a fortnight before the trip as our plans changed a bit and a campervan wasn't going to work. I checked the same booking a week before we went and it was only $125 a day. When we got to Chch and picked up our rental car in the next paddock there were hundreds of parked up Britz and Maui - looked a bit like the airplane boneyards in the desert...

Yeap I've been toying with the idea of buying a new German made campervan but I've seen those boneyards full of hundreds of campervans parked up at locations close to Auckland airport too. Guy up the road from me has had a lovely new German made one for a couple of years now. I see it every time I got past his place parked up there. I figure he maybe uses it 10-15 days a year., not that I'm really counting but its almost always there. Probably about how much I'd realistically use one too until I'm fully retired. Makes financial sense to rent them until one is fully retired and going to use it a LOT. I wonder whether the novelty of living in such a confined space on holiday would wear out pretty quickly too.

[Jay]

Yeap I've been toying with the idea of buying a new German made campervan but I've seen those boneyards full of hundreds of campervans parked up at locations close to Auckland airport too. Guy up the road from me has had a lovely new German made one for a couple of years now. I see it every time I got past his place parked up there. I figure he maybe uses it 10-15 days a year., not that I'm really counting but its almost always there. Probably about how much I'd realistically use one too until I'm fully retired. Makes financial sense to rent them until one is fully retired and going to use it a LOT. I wonder whether the novelty of living in such a confined space on holiday would wear out pretty quickly too.

It would for me.
Have friends who had always was what they were going to do when they retired. Now that they are (managed to retire early) and now the tour the country with a "5th wheeler" - like a caravan that is connected like an articulated truck to the deck of their ute.
Have done 2 weeks around the South Island with them as it happens - some years ago when they had a camper-van of their own on a Toyota Dyna (I think) chassis. That was long enough - I think it might have been a novelty for me at the time!
But they are right into it - joined the 5th wheelers "club" which has its own facebook page so they know here each other are and meet up, have rallies etc etc. They also have a base (their own house - rented to their daughter) where they park up from time to time and still use the 5th wheeler to sleep in/spend most of their time in while their, so I think it is a lifestyle choice.
We were looking at renting one for a week but could not get into camping grounds at the time we wanted - not to keen on being self sufficient in one

[winner69]

Grant Webster and his mates still pleading with government to relax border controls ...at least with Australia.

Could regret it if such actions caused another widespread lockdown

[winner69]

Webster trying even harder than before in trying to convince the govt that we need a travel bubble with OZ ...soon

Can’t see why one isn’t workable ....instead of a door that’s either closed or open we need a swing door. Figure that out

[Playa]

Could have more potential problems that it's worth, may as well hang out until later in the year when many have been vaccinated

[winner69]

Good piece from Rob Campbell on tourism’s future

Love it when he can mention Iceland, Stalin and Crosby, Stills, Nash and Young in a short article

https://businessdesk.co.nz/article/opinion/tourism-doesnt-have-to-be-destructive

[BlackPeter]

Good piece from Rob Campbell on tourism’s future

Love it when he can mention Iceland, Stalin and Crosby, Stills, Nash and Young in a short article

https://businessdesk.co.nz/article/opinion/tourism-doesnt-have-to-be-destructive

Well, I guess he sort of stops before it gets interesting, but he is right - it would be good to have a plan. Time for the government to set up a working group to discuss whether we need a framework to set up a national plan for the return of tourism, isn't it?

Obviously - we will need as well to give due attention to the growing impact of anti tourism forces ... including the minister against immigration

[Ricky-bobby]

There’s a place in Blenheim that specialises in just selling camper vans and the its looking pretty empty... it’s quite big as well. only happened over the last couple of months I recon. Camper van buying boom is back on??.

[Southern Lad]

Worldwide there appears to be a shortage of rental cars looming as fleets have been reduced in size and there are supply issues with rebuilding them (especially at the substantially discounted prices that rental car firms pay). Stuff has run an article today with the NZ perspective:

https://www.stuff.co.nz/business/300288866/rental-car-prices-expected-to-skyrocket-as-ski-season-braces-for-shortage

I’m assuming there must be cross over into the motor home space, with travellers opting for a motor home if they can’t get a rental car. THL has signalled they will start to rebuild their fleet this year, but there will be limits on how quickly this can occur. They may also face pricing pressure for vehicle chassis’s.

I see from the Maui NZ website they they also rent cars in addition to motor homes. Does anyone know whether they own this fleet or are they just reselling another operators fleet?

[Benny1]

Worldwide there appears to be a shortage of rental cars looming as fleets have been reduced in size and there are supply issues with rebuilding them (especially at the substantially discounted prices that rental car firms pay). Stuff has run an article today with the NZ perspective:

https://www.stuff.co.nz/business/300288866/rental-car-prices-expected-to-skyrocket-as-ski-season-braces-for-shortage

I’m assuming there must be cross over into the motor home space, with travellers opting for a motor home if they can’t get a rental car. THL has signalled they will start to rebuild their fleet this year, but there will be limits on how quickly this can occur. They may also face pricing pressure for vehicle chassis’s.

I see from the Maui NZ website they they also rent cars in addition to motor homes. Does anyone know whether they own this fleet or are they just reselling another operators fleet?
From memory I think they used to have a small rental car fleet some years ago,pretty sure they haven't got any now. Certainly haven't seen any at their depots the last few times I have been there so assume they are just reselling.

[Southern Lad]

From memory I think they used to have a small rental car fleet some years ago,pretty sure they haven't got any now. Certainly haven't seen any at their depots the last few times I have been there so assume they are just reselling.

Thanks Benny1

[LaserEyeKiwi]

Read recently that rental car shortage in America is so bad that people are renting U-Hauls (basically furniture moving vans/light trucks) instead of rental cars in various locations, this is due to the rental car companies selling off a large amount of their fleets last year and now being very short on vehicles as travelling has returned much faster than anticipated.

Rental cars going for as high as $1000 a day in Honolulu: https://www.travelandleisure.com/travel-news/hawaii-tourists-renting-uhaul-trucks

[Marilyn Munroe]

Read recently that rental car shortage in America is so bad ......]

Spoke to an Aussie visitor last week who tried to hire a rental car at Christchurch Airport. He couldn't get one.

Boop boop de do
Marilyn

[Waltzing]

Fleets of camper vans seen in the central north island lake camping grounds this weekend as they flock together... Traffic on state highway one southern route into and out of auckland looked heavy late into sunday afternoon.

Be very interesting to see the rental numbers with this late warm autumn.

[winner69]

Bit of loss downgrade today

They still hanging in there so not all bad

One day it'll all be over and bright times again

[flyinglizard]

Bit of loss downgrade today

They still hanging in there so not all bad

One day it'll all be over and bright times again

Pretty sure, a big boy comes in today. I almost forget that I have THL. The chart is similar to ARV.

[ratkin]

Like the way their debt is less than expected due to not paying for their vehicles on time.
Wish all debt worked like that

[Sideshow Bob]

thl Annual Results FY21 - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/377955)


thl Annual Results FY2126/8/2021, 8:30 am FLLYR26 August 2021
MEDIA | NZX RELEASE
TOURISM HOLDINGS LIMITED (thl)
ANNUAL RESULTS FOR THE YEAR ENDING 30 JUNE 2021
Summary:
•Statutory net loss after tax of $14.5M, and ordinary net loss after tax of $14.3M down $34.3M on the prior corresponding period (pcp).
•Continued balance sheet management with net debt of $49M and refinanced debt facilities of up to $250M through to 2024.
•Record vehicle sales revenue and volumes, with growth in average sales margin per vehicle in all countries.
•Strong USA performance with average yield uplift on the pcp.
•Australian Rentals business delivered positive EBIT result despite lockdowns, with positive outlook for domestic demand and average yields assuming an environment with no domestic travel restrictions.
•New Zealand Rentals and Tourism continue to be challenging given the reliance on international tourism.
•A net loss is the most likely outcome for FY22, however the quantum of the loss is difficult to ascertain at this point.
thl today releases its results for the financial year ending 30 June 2021 (FY21).
Rob Campbell, thl Chair, said “We are not pleased with the net loss after tax of $14.5M, but do consider that we have managed it well within the context of global tourism. We have continued to adapt, manage the balance sheet and retain opportunities for the future.
“However, we recognise the uncertainty regarding the outlook for international tourism, particularly for New Zealand and Australia. The United States appears to be close to reopening and the current increasing vaccination rates in New Zealand and Australia are clearly positive.
“In the interim, thl remains a company with a carefully managed balance sheet that is strong for our industry segment and has a company value that is supported by a base of tangible, realisable and in demand assets that are being sold well in excess of book values.”
Grant Webster, thl Chief Executive Officer, said “we are moving forward, taking the opportunities that exist for our business in today’s environment whilst continuing to challenge and adapt as required for long-term success.
“We have capitalised on the relative category growth for the RV experience and improved our vehicle sales expertise to deliver a record sales year, while managing our rental fleet to the prevailing domestic conditions within each country.
“A key priority for the year has been keeping customers and crew safe from COVID-19. We are very pleased to have had no traceable cases linked to our operation from any of our 40 locations globally. Despite the challenging times and uncertainty, our crew have adapted and delivered.
“Regardless of the demand environment today our belief in becoming Future-Fit remains, and is directing us on what we believe is the right path, ensuring we will be sustainable in all aspects of the business as we reset and prepare for the years ahead.”
The integrated report, including the financial statements, as well as an investor presentation, are available on thl’s website.
ENDS

[winner69]

Trading halt ...proposed transaction

Wonder what they buying ....or selling

[Sideshow Bob]

Trading halt ...proposed transaction

Wonder what they buying ....or selling

Announcement doesn't give you a hint either way!!

[Arbroath]

Trading halt ...proposed transaction

Wonder what they buying ....or selling

thats often the sort of wording used for a takeover offer

[winner69]

thats often the sort of wording used for a takeover offer


Could well be - matket cap $433m plus a bit of debt could be an attractive buy for somebody who thinks travel will regain its former glory

Did respond to rumours a few months back re ASX listing and potential cap raise .... might be that

[Arbroath]

thats probably more likely winner as conditions improve theyll want to gear up again and if they can raise c. $2.50 with a dual listing to keep BS leverage under control thats probably quite sensible...

will they keep us in suspense all weekend!

[Sideshow Bob]

thl agrees merger terms with Apollo Tourism & Leisure - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/384467)

THL AGREES MERGER TERMS WITH APOLLO TOURISM & LEISURE

Merger will create a global leader in the commercial RV rental market

Summary:

• thl and Apollo Tourism & Leisure Limited (ASX:ATL) (ATL) have entered into a conditional Scheme Implementation Deed to merge through an Australian Scheme of Arrangement whereby thl acquires all shares in ATL
• The merger will result in ATL shareholders owning approximately 25% and thl shareholders owning approximately 75% of thl*
• Significant anticipated cost out synergies are expected to deliver a steady-state EBIT benefit of $17M to $19M per annum, and fleet rationalisation is expected to generate in excess of $40M of net debt benefit
• The transaction is subject to approval of Apollo shareholders, as well as funding, court and regulatory approvals in Australia and New Zealand and other conditions specified in the Scheme Implementation Deed
• thl will apply to be dual listed on the Australian Securities Exchange (ASX) through a foreign-exempt listing
• As consideration, thl will issue 1 new ordinary thl share for every ~3.68 ordinary ATL shares held by ATL shareholders (excluding thl)*

thl has entered into a conditional agreement to merge with Apollo by acquiring all outstanding shares of Apollo Tourism & Leisure Ltd (ASX:ATL). The proposal contemplates that the merger be effected by way of an Australian Scheme of Arrangement and the parties have entered into a Scheme Implementation Deed (SID). The consideration is payable by thl issuing 1 new fully paid thl ordinary share for every ~3.68 ordinary shares held by Apollo shareholders, resulting in a post-merger ownership ratio of approximately 25% to Apollo shareholders and approximately 75% to thl shareholders.*

thl Chair, Rob Campbell, said that “thl is proactively moving to build a more resilient business and expand its international reach, rather than seeking to wait out market uncertainty from the pandemic.”

“We’re able to make this move thanks to our prudent balance sheet management through the pandemic period”, he said.
“Importantly, this merger assists both entities to better manage market uncertainty over the next phase, due to compelling cost synergies now and greater fleet efficiency in future years. By realising significant cost synergies, the merged business will be better positioned to face a longer than expected recovery period, should that eventuate”, said Mr Campbell.

thl Chief Executive, Grant Webster, said “the strategic logic of merging thl and Apollo’s networks is clear and the dynamics of the current market mean that the synergies available from merging are compelling.”

“Being able to deliver value uplift for shareholders of both companies, while creating a more resilient business in terms of navigating our next phase and competing more effectively on the world stage is a very significant step for us.”

“This takes thl into more markets, as a global commercial RV rental leader with businesses in Canada and the US, Europe and the UK as well as our Australasian operations, supported by strong manufacturing capability and retail vehicle sales in Australia and New Zealand.” said Mr Webster.

The proposed merger remains subject to approval by Apollo shareholders and finalisation of appropriate funding arrangements for the merged entity. In addition, there are various court and regulatory approvals in Australia and New Zealand, including Australian and New Zealand competition regulatory clearance. Mr Webster said these shareholder and regulatory approvals would likely take until at least the start of the second quarter of 2022.

“We welcome Luke and Karl Trouchet as a major shareholder. Together they have a wealth of experience in the RV industry and have a long-term commitment to thl.”

Apollo Managing Director, Luke Trouchet, said “the two businesses have similar operations and like-minded cultures, and we both strongly believe in the potential of the global RV market. I am very much looking forward to joining the Board and executive of thl and am excited by the prospects of what the two companies can achieve together.”

Mr Webster said “a merger also aligns with thl’s Future Fit commitment to improve the sustainability of the business. Apollo shares our commitment to being a business that focusses on multiple stakeholder impacts and benefits. The fleet synergies alone demonstrate the strong linkage between the environmental and commercial benefits of such a transaction, creating an opportunity to do more with fewer resources and less environmental impact.”

“The merger would also pave the way for thl to dual list on the ASX, enabling Apollo shareholders to be unaffected by the transition as well as paving the way for Australian investors who may not have had a mandate for NZX stocks to invest in thl.”
An investor presentation has been released today with further detail on the transaction, including the strategic rationale, expected synergies and the proposed process timetable.

Jarden acted as Financial Adviser, MinterEllisonRuddWatts as New Zealand Legal Adviser, MinterEllison as Australian Legal Adviser, Baker Mckenzie as North American Legal Adviser, KPMG as Accounting Adviser and Synergy Due Diligence, Deloitte as Tax Adviser and Richard Wallace as Banking Adviser.

* thl currently holds 898,150 ordinary shares in ATL, representing 0.5% of Apollo ordinary shares on issue. Whilst the share of the merged entity attributable to all ATL shareholders (including thl) is 25.0%, the share of the merged entity attributable to ATL shareholders (excluding thl) is 24.9% and the share of the merged entity attributable to thl shareholders is 75.1%.

END

[Sideshow Bob]

Market Update - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/384468)

MEDIA | NZX RELEASE
TOURISM HOLDINGS LIMITED (thl)

MARKET UPDATE

thl today provides a general market update on recent performance in the financial year ending 30 June 2022 (FY22).

H1 FY22 net profit after tax

As advised at the 2021 Annual Meeting, H1 FY22 will be below the prior corresponding period (pcp) result due to:

• ongoing domestic travel restrictions in New Zealand and Australia; and
• the earlier 2021 USA summer season having performed below expectations.
The USA autumn shoulder season has performed in line with the pcp, and has experienced stronger than expected bookings for winter.

The vehicle sales market remains strong, with average sales margin growth exceeding the pcp in all jurisdictions. As previously indicated, the current sales margins being achieved are transitory in nature as we sell vehicles purchased prior to the COVID-19 pandemic in today’s market conditions. We expect higher than historical margins to remain throughout FY22 and potentially into H1 FY23, and then return to historical norms.

Action Manufacturing and Just go have performed well. In particular, Action Manufacturing is currently on track for $1M+ EBIT growth on the pcp.

Variable costs have been closely managed in all jurisdictions.

Inclusive of transaction costs incurred to date for the Apollo merger (~$2M for the half year), we expect that the result for H1 will be a net loss after tax of between $4M - $7M.

H2 FY22
The outlook for H2 FY22 in New Zealand and Australia remains uncertain, as both markets currently have some form of domestic travel restrictions in place.

While the respective Governments have provided an indicative timetable for the relaxation of international borders, it remains too early to understand what potential international demand could return in H2 FY22.

Based on the New Zealand Government’s announcement on border settings, it is unlikely that there will be any meaningful Trans-Tasman travel in H2.

International booking intake for the April – May shoulder season in the USA has been positive, although it is too early to get a clear indication of the potential demand for the 2022 summer season.

As previously stated, thl’s H2 result is expected to be above the pcp as domestic (and to a lesser extent international) travel restrictions ease and thl continues to capitalise on strong vehicle sales demand.

thl is closely monitoring development of the Omicron variant to assess the potential impact on travel sentiment and international and domestic travel restrictions in its operating jurisdictions, and at this point there have not been any clearly identifiable trends.

Net debt and capital expenditure
Net debt as at 30 November was approximately $20M, as thl continues to capitalise on the strong vehicle sales market. Consequently, thl expects that net capital expenditure for FY22 will be at the lower end of previously stated guidance (between $25M to $60M).

There is some uncertainty regarding the timing of new vehicle deliveries and as a result thl is limiting sales in New Zealand and the United States. Vehicle supply challenges are ongoing but considered manageable for 2022.
ENDS

[Muse]

pretty bloody interesting

[Arbroath]

thats often the sort of wording used for a takeover offer

I was half right...it is takeover wording but its THL doing the taking over. At first blush this looks a very good deal as long as there are no competition hurdles

[Muse]

Proactive the right word here. Rather than just sitting around waiting. This line caught my eye
"Significant anticipated cost out synergies are expected to deliver a steady-state EBIT benefit of $17M to $19M per annum, and fleet rationalisation is expected to generate in excess of $40M of net debt benefit"

[winner69]

Quite a few on this thread said thl needed to takeover Apollo


Taken thl a while to get around to it .... but probably a bit cheaper now than 2 to 3 years ago

[winner69]

If thl share price stays about where it is now Apollo shareholders getting about 73 cents for their 55 cents shares

Should be happy with that .... a good get out of jail card and jeez they'll cream it in future when the new combined group profits soar

[winner69]

the Apollo view of the deal

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02465071-2A1345182?access_token=83ff96335c2d45a094df02a206a 39ff4

[winner69]

Good deal Jeremy? .... haven't heard from you for a while

[winner69]

Merger seems to be totally based on 'synergies' .... the presentation mentions it 38 times

When I was involved in M&A work I made myself and others read The Synergy Trap by Mark Sirower on a regular basis. Essentially retired from such things now but might pull my copy of the shelf and have another read.

Mergers based on synergies often don't add much value (or not to the extent originally estimated). Invariably synergies are over valued.

There's a saying often heard in the Board room ... 'Where did all the synergies go'

Be interesting how this pans out for thl

[Arbroath]

Merger seems to be totally based on 'synergies' .... the presentation mentions it 38 times

When I was involved in M&A work I made myself and others read The Synergy Trap by Mark Sirower on a regular basis. Essentially retired from such things now but might pull my copy of the shelf and have another read.

Mergers based on synergies often don't add much value (or not to the extent originally estimated). Invariably synergies are over valued.

There's a saying often heard in the Board room ... 'Where did all the synergies go'

Be interesting how this pans out for thl

Agree that is the main risk medium term but in this case both businesses are almost identical and there will be plenty of corporate and property costs they can eliminate over 2-3 years. If they can’t execute these synergies then it will make a good chapter in a book.

[winner69]

Agree that is the main risk medium term but in this case both businesses are almost identical and there will be plenty of corporate and property costs they can eliminate over 2-3 years. If they can’t execute these synergies then it will make a good chapter in a book.

At least the Apollo shareholders will get the synergy value up front.

[Southern Lad]

Interesting to compare the closing THL (NZ$3.02) and ATL (A$0.70) share prices today. Noting that the scheme if it progresses will deliver 1 THL share for every 3.680818 ATL shares and using a AUD:NZD midpoint of 0.9497, the effective THL purchase price via ATL is a bit over NZ$2.71.

The reasons why this large arbitrage exists are presumably:

1. Concern the transaction won’t proceed (whether regulatory or failure to get ATL shareholder support)
2. Australian ATL shareholders not wanting shares in a NZ company and therefore getting out of ATL
3. The material increase in the ATL share price today encouraging both traders and long suffering ATL shareholders to take the cash now.
4. The increase in the THL share price today not having dawned on ATL selling shareholders (this mornings announcements suggested an effective value of A$0.7358 per ATL share however this was based on a THL share price of NZ$2.85).

The ATL share price also suggests the market doesn’t anticipate a superior offer for ATL appearing.

Will be interesting to see how the two share prices track next week.

[nztx]

Dividend still on hold until at least 2023 .. while the rugs get shaken out & aired ? ;)

Frankly any perceived Synergies values look better invested out of this troubled sector IMO ;)

[JeremyALD]

Good deal Jeremy? .... haven't heard from you for a while

Hello hello!

I've been out of THL and ATL for a while, but a merged entity does sound like an appealing proposition, especially as a long term investment.

Last I heard ATL was still carrying quite a lot of debt, so I will need to look more closely at the financials to see if this was a good deal.

What are everyone's thoughts about approvals, especially Commerce Commission? Seems like THL will almost control the NZ market with the merger?

[Muse]

Some of my back of the envelop workings I did looking at the implications from the proposed merger which I did in haste prior to trading commencing again after the announcement. Defo not advice, as a spreedsheet only as good as its inputs, and I used the relevant synergy information from the THL (being 18m in operating synergies flowing through to EBIT, a one off 40m reduction in net debt, and ~4m of after tax costs associated with the fleet rationalisation. Didn't include the $30m further upside rationalisation as alluded to in the report.) Did two scenarios - looking at the phasing THL suggested, and then just one simple one assuming all synergies finalised in about 3.5 years from right now. 7.5x EBIT multiple applied to incremental operating synergies, and a 15% discount rate (which is high, to reflect relative risk on delivering those synergies).


13322

It's interesting - the theoretical ex price from the merger is about 2.75 (the summed marketcaps prior to the announcement divided by the # of THL shares post merger). Then added the NPV of synergies and fleet rationalisation.

Gets you to about 3.27 (if you ignore the phased delivery of synergies) to about 3.34 if you try to reflect the timing of them as management have guided.

Not a definitive analysis and all the risks on actual ability to delivery those synergies (I actually see this one where its quite possible) hence the high discount rate. Gave me the confidence to buy almost every share once trading commenced from about 2.80 to 2.88, bar the odd parcel.
again do your own research. a lot of theoretical upside but, ya know, a massive ongoing pandemic, borders opening and shutting, new variants, changing government attitudes, no one knows what the new normal is like.

[winner69]

Hi Moose, I did much the same exercise

Whether to get involved or note was decided when I saw the Proforma P&L in the presentation which showed the merged out losing $43.6m in F21

thl already signaled F22 probably doing to be worse ... wouldn't hang any hopes of Apollo doing any better (still losing)

Marketsceener has things getting better for both (post covid recovery) with combined profits of $27m in F23 and $50m in F24 ...and analysts are always otimistic eh

Even adding in the synergies and he other benefits I really could't convince myself to buy at say $3 - ie $600m market cap. Still losing in F22 and so much uncertainty about the next few years that seems awfully high. I reckon more things can go wrong than the good things becoming reality.

Will be watching closely though - sometime a surer bet but not just now for me

You might be right ... well done if you are

[Muse]

Hi Moose, I did much the same exercise

Whether to get involved or note was decided when I saw the Proforma P&L in the presentation which showed the merged out losing $43.6m in F21

thl already signaled F22 probably doing to be worse ... wouldn't hang any hopes of Apollo doing any better (still losing)

Marketsceener has things getting better for both (post covid recovery) with combined profits of $27m in F23 and $50m in F24 ...and analysts are always otimistic eh

Even adding in the synergies and he other benefits I really could't convince myself to buy at say $3 - ie $600m market cap. Still losing in F22 and so much uncertainty about the next few years that seems awfully high. I reckon more things can go wrong than the good things becoming reality.

Will be watching closely though - sometime a surer bet but not just now for me

You might be right ... well done if you are

I hear ya on all that. Hence only 1% of the portfolio (@~2.85) and expect to buckle up for a long bumpy ride!

The other thing I noticed was what it does to proforma NTA per share. Different business models on vehicle ownership. NTA trackers wont like and take some time for the market to readjust (or not). But I like the look of the merger (acquisition really), if its allowed to happen. The status quo didnt interest me.

[Scrunch]

I hear ya on all that. Hence only 1% of the portfolio (@~2.85) and expect to buckle up for a long bumpy ride!

The other thing I noticed was what it does to proforma NTA per share. Different business models on vehicle ownership. NTA trackers wont like and take some time for the market to readjust (or not). But I like the look of the merger (acquisition really), if its allowed to happen. The status quo didnt interest me.

I haven't gone onto the deal in depth, but a basic look has it seeming like a repeat of the kea merger - in broad terms. That worked out well and also means THL have more experience than usual around whst synergy gains are real vs just on paper.

[winner69]

I hear ya on all that. Hence only 1% of the portfolio (@~2.85) and expect to buckle up for a long bumpy ride!

The other thing I noticed was what it does to proforma NTA per share. Different business models on vehicle ownership. NTA trackers wont like and take some time for the market to readjust (or not). But I like the look of the merger (acquisition really), if its allowed to happen. The status quo didnt interest me.

Share price went from about 60 cents in 2013 to just under $7 in June 2018

Been downhill since then .... and was in free fall even before covid hit

Might do a stellar rise again

[flyinglizard]

Sold today...........

[golden city]

I was leading the way on last 60c buying. Sold out 2018. I didn’t feel right to get back in yet

[Beagle]

Hi Moose, I did much the same exercise

Whether to get involved or note was decided when I saw the Proforma P&L in the presentation which showed the merged out losing $43.6m in F21

thl already signaled F22 probably doing to be worse ... wouldn't hang any hopes of Apollo doing any better (still losing)

Marketsceener has things getting better for both (post covid recovery) with combined profits of $27m in F23 and $50m in F24 ...and analysts are always otimistic eh

Even adding in the synergies and he other benefits I really could't convince myself to buy at say $3 - ie $600m market cap. Still losing in F22 and so much uncertainty about the next few years that seems awfully high. I reckon more things can go wrong than the good things becoming reality.

Will be watching closely though - sometime a surer bet but not just now for me

You might be right ... well done if you are

Good post, I agree.

[winner69]

Looked through all the guff re the merger again

Not exactly a growth story is it

Seems all about ensuring two struggling companies might one day have a future ....and a fair of that future I feel is already built into the current market cap of $600m if the deal completes - but I fear that day is a long way off

[winner69]

Shareprice drifting down to near pre-merger price

Enthusiasm for merger on the wane or is something to do with rampaging covid in Australia

State Premiers imploring punters to go on holiday so can't be too bad

[Benny1]

I'm out driving around from Auckland to Martinborough in my Campervan.
Have seen very few rental vans out and about on the roads, seems only the privately owned vans are venturing around at the moment.

[Sideshow Bob]

Market update - thl/Apollo merger - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/387337)

Following thl’s announcement on 10 December 2021 that it had entered into a conditional Scheme Implementation Deed with Apollo Tourism & Leisure Limited (Apollo) to merge through an Australian Scheme of Arrangement, whereby thl acquires all shares in Apollo (the Scheme), thl wishes to provide an update in respect of the Scheme.

thl understands that, based on information received to date, the preliminary view of the Apollo Board is that they intend to unanimously recommend that Apollo shareholders approve the Scheme, and that the Independent Expert intends to, based on the information it has received to date, conclude that the Scheme is in the best interests of the Apollo shareholders who will be voting in respect of the Scheme, in the absence of a superior proposal.

thl understands that these preliminary views are publicly available. thl notes that the above views are not final and could be subject to change.

A court hearing is scheduled for Friday 18th February with the Supreme Court of Queensland where it is intended that court approval of the final Scheme Booklet is obtained. Following the Supreme Court of Queensland’s approval and subject to the final approvals of the respective Board’s of thl and Apollo, the documentation will be lodged with the Australian Securities and Investment Commission.

thl will provide an update, including a copy of the final Scheme Booklet and an update on the preliminary result for H1 FY22, once that process is complete.

ENDS

[LaserEyeKiwi]

Big news just mentioned in the live health briefing: possibility that self isolation requirements for people entering New Zealand may disappear altogether within the month (minister: “expecting to receive advice on that within the next week or two”)

This would be a significant event for the restart of international tourism into NZ.

[LaserEyeKiwi]

https://www.stuff.co.nz/national/politics/300525636/covid19-nz-border-rules-government-reviewing-selfisolation-for-travellers-as-cases-mount


Tourism Industry Aotearoa (TIA) spokeswoman Ann-Marie Johnson said it was reassuring to hear the Government was reviewing self-isolation requirements for international arrivals.Having isolation requirements in place meant New Zealand was off the radar for international tourists, she said.

“With the move to phase three of the Omicron response, the rationale for keeping self-isolation rules in place no longer exists,” Johnson said.

TIA was working on an evidence-based case for removing self-isolation requirements and would provide it to the Government as soon as possible, she said.

[Sideshow Bob]

Probably not bad, all in all :mellow:

thl FY22 Interim Results - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/387934)

Summary:
•Statutory net loss after tax of $4.4M and ordinary net loss after tax of $2.3M.
•Net debt at $18.7M, providing approximately $232M of headroom.
•Total revenue of $174.9M, down $30.9M on the prior corresponding period (pcp).
•Vehicle sales margins continue to be higher than historical norms. We expect that margins will normalise over time.
•Supply chain and inflation related issues are increasing in intensity with varying impacts by region. These issues influence decisions on the quantum of vehicles we allow for sale.
•Non-tourism business diversity strengthened with Action Manufacturing’s proposed acquisition of MaxiTRANS New Zealand.(1)
•New Zealand and Australian EBIT improved on the pcp with good cost management and ongoing vehicle sales performance, despite the ongoing challenges in the rental demand environment due to border restrictions.
•As previously indicated, USA EBIT declined on the pcp due to the domestic environment in Q1. The rental demand environment is improving into the next high season. Vehicle sale demand and margins continue to perform strongly.
•No dividend declared for the half and it is expected that this will remain the same for the full year.
•On a standalone basis, thl’s result for H2 FY22 (excluding transaction costs of NZ$4.0m that are expected to be incurred in that half) is still expected to be a net loss after tax, however improved on the pcp.(2)

[Lescy]

If you think the apollo-thl merger is a positive, and are happy with the financial metrics of both companies, and are confident the regulatory authorities sign off on the merger .... would you not currently be better to buy shares in apollo rather than thl? Or is this making too many assumptions?

*Apollo currently trading at AU$0.55 , THL currently trading at NZ$2.62 (AU$2.44)
*merger document saying these will translate as: 3.68 ATL -> 1 THL share
*at today's price that means your ATL shares effectively allow you to acquire THL at AU$2.024
I've used AUD as THL intends listing on the asx

[winner69]

ComCom needing more time re Apollo merger ...hmmm

Maybe been too busy touching up the supermarkets report .... but we must see things are all fair in the travel industry

If the merger doesn'y proceed it'll be just be business as usual for thl .... and maybe a blessing in disguise for them

[LaserEyeKiwi]

FYI…international tourists returning to New Zealand in the very near future, official earlier date to be announced this week:

13620

[Sideshow Bob]

thl sells Roadpass Digital shareholding for NZ$23.9M - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/388990)

THL SELLS ROADPASS DIGITAL SHAREHOLDING FOR NZ$23.9M
thl advises that it has today sold its minority shareholding interest in TH2connect, LLC (trading as Roadpass Digital) to its joint venture partner, THOR Industries, for approximately NZ$23.9 million. The sale represents a one-off gain on sale of approximately NZ$1.6 million against the carrying value of the shareholding.

[winner69]

talk around town says less than 50% chance of Apollo deal going ahead

[Arbroath]

if you read the ACCC preliminary issues release this morning the takeover look dead in the water to me...probably less than 10% chance they can change the ACCC's mind. This was always the risk as the THL-Apollo deal was a great one for THL....almost a replay of the KEA takeover post 2011 RWC in NZ but on a bigger scale.

[Sideshow Bob]

Market update and FY22 guidance - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/392456)

thl expects that its statutory net loss after tax for FY22 will be in the range of $2M to $4M, with the underlying net loss after tax expected to be in the range of $4.7M to $6.7M. The statutory result will include a number of one-off items:
Expected statutory net loss after tax: $2M - $4M
Gain on sale of Mighway and ShareACamper: $6.2M
Gain on sale of shares in Roadpass Digital: $1.6M
Expected FY22 transaction costs relating to the proposed merger with Apollo Tourism & Leisure Ltd (ATL): $5.1M
Expected underlying net loss after tax: $4.7M - 6.7M

[winner69]

thl share price sure has plummeted since updated guidance last month

market thinking merger a no go as well?

keep on watch list ......maybe one day it might be come right but its been a bit of a impending train wreck for yonks and still can't understand the excitement that drove the share price way over 6 bucks a few years ago .... never worth that even allowing for the much vaunted global partnerships

[Sideshow Bob]

thl Annual Results FY22 - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/397679)

Summary:
•Significant improvement on the prior corresponding period (pcp), with underlying net loss after tax of $5.4M, improved by $8.9M. Statutory net loss after tax of $2.1M, improved on the pcp by $12.4M.(1)
•Total revenue of $345.8M, down 4% on the pcp, due to reduced rental revenue (lockdown impacts), with sale of goods revenue broadly in line with the pcp.
•Record vehicle sales margins were achieved in all countries, with average gain on sale of fleet of approximately $29k per vehicle, up 137% on the pcp.
•Net debt at 30 June 2022 was $58.5M, providing approximately $200M of headroom in debt facilities to fund fleet growth.(2)
•No dividend declared for FY22 and a dividend unlikely for FY23.
•thl currently expects that net profit after tax in FY23 on a standalone basis will be within the current range of analyst expectations, being between $17.0M to $30.2M.

[Charlie]

The trading halt has been put in place as THL is expecting to receive, during
the course of the day, the New Zealand Commerce Commission's decision on its
clearance application in respect of the proposed merger with Apollo Tourism &
Leisure Limited.

Any thoughts ?

[Southern Lad]

Today’s announcement of the resignation of CITIC appointed director Guorong Qian notes that the CITIC Capital International Tourism Fund’s term has expired and the THL shares held are to be distributed in specie to the underlying individual limited partnerships.

https://www.nzx.com/announcements/399478

According to the 2022 THL annual report, CITIC held 18.26% of THL (via HB Holdings Ltd). Does this restructure mean that there is 26.8m THL shares looking for a new home?

Assuming the Apollo merger proceeds, I think there are a number of Australian retail ATL shareholders that will also want to sell due to the perceived undesirability of holding shares in a NZ company. Some short term pain but maybe a buying opportunity.

I was in Queenstown this last weekend and did note a significant number of Maui and Britz camper vans on the road, so signs of some green shoots on the tourism recovery front.

[Charlie]

MEDIA | NZX RELEASE
TOURISM HOLDINGS LIMITED (thl)

THL LIFTS FY23 PROFIT GUIDANCE

thl today provides an update on its expectations for the financial year
ending 30 June 2023 (FY23).

thl's current expectation is that net profit after tax (on a standalone
basis) in FY23 will be above $30 million.* This guidance includes the impact
of an estimated $3.5 million in Apollo-related transaction costs in FY23.

Earlier guidance provided by thl in August 2022 was that net profit in FY23
was expected to be between $17.0M and $30.2M, which aligned with the range of
analyst forecasts at that time.

[Mr Slothbear]

MEDIA | NZX RELEASE
TOURISM HOLDINGS LIMITED (thl)

THL LIFTS FY23 PROFIT GUIDANCE

thl today provides an update on its expectations for the financial year
ending 30 June 2023 (FY23).

thl's current expectation is that net profit after tax (on a standalone
basis) in FY23 will be above $30 million.* This guidance includes the impact
of an estimated $3.5 million in Apollo-related transaction costs in FY23.

Earlier guidance provided by thl in August 2022 was that net profit in FY23
was expected to be between $17.0M and $30.2M, which aligned with the range of
analyst forecasts at that time.


must say they’ve managed through the pandemic phenomenally well. Quite the outlook upgrade

[NZSilver]

Should move towards $4 - very good upgrade and very strong booking levels. This could be paying at 25c dividend in fy24. Hopefully we are at the beginning of an upgrade cycle.

[dobby41]

talk around town says less than 50% chance of Apollo deal going ahead

Maybe the talk isn't always right?

[BlackPeter]

Maybe the talk isn't always right?

Maybe you don't understand likelihoods?

The chance for winning the big prize in the lotto is something like 1 : 7 million.

If you happen to be the lucky one who did, the likelihood was still 1 : 7 million.

Think about it.

[DarkHorse]

Leading Australian fund managers WAM are very bullish holders - excerpt from Oscar Oberg's comments on Livewire yesterday:

Oberg nominates Tourism Holdings (ASX: THL (https://www.livewiremarkets.com/stock_codes/asx-thl)) – the largest motorhome rental company in New Zealand and the second largest in Australia. Oberg cites the company not raising capital since COVID-19 and a valuation materially lower than what it was before the pandemic as attractive features of the business, but there is one factor that trumps the lot.

“The real kicker, the real reason to own it, is the huge catalyst in the form of the merger with Apollo – which is the largest motorhome player Australia, and the second largest in New Zealand.”Oberg notes that in putting the two together, “you get the largest rental company for motorhomes in the US and Canada, and a growing business in the UK.”
On Oberg’s estimates, the combined business in Australia and New Zealand commands about 60% market share, and there will be substantial synergies that will come through.
“So if you put it all together and do the work on the numbers and the synergies, the combined business is currently trading on a price-earnings multiple of seven times.
“THL used to trade at 15 times before COVID-19 started, and you could argue that the business together will be a much, much stronger business. So, you could argue that it should trade at a higher valuation. If it goes back to 15 times, well, there's over 100% upside there.”

[DarkHorse]

Both the NZCC and ACCC have granted approval for the merger with Apollo, so it only remains subject to the satisfaction of conditions including refinancing and requisite
approval from ATL shareholders and the Supreme Court of Queensland.
If anyone knows any substantive reason it's not likely to go ahead please do share.

I note that Craigs rates them "outperform" despite excluding potential merger benefits from their valuation.

[Southern Lad]

Stuff article today talking up the great effort to survive the COVID border closures, restructure the business and set themselves up for growth as tourists start to travel again

https://www.stuff.co.nz/business/130083293/how-the-worlds-largest-campervan-rental-company-got-through-the-pandemic-and-came-out-on-top

[Waltzing]

add to that story ... tourism in NZ

https://www.stuff.co.nz/business/industries/130154320/46000-on-a-holiday-in-nz-is-just-the-start-as-luxury-tourists-return

[sb9]

Back into this after long hiatus, used to be one of my fav stock. Let's see if it'll be equally rewarding this time around.

[sb9]

Solid update from Apollo across the ditch..

Oct 18 (Reuters) - Apollo Tourism & Leisure Ltd (ATL (https://hotcopper.com.au/asx/atl)) :


FY23 GUIDANCE UPDATE
RENTAL REVENUE EXCEEDED INTERNAL TARGETS IN Q1 FY23 IN EVERY REGION
CURRENTLY ANTICIPATING RECORD LEVEL OF UNDERLYING NET PROFIT AFTER TAX (ON STANDALONE BASIS) IN FY23 OF ABOVE A$20 MILLION

[winner69]

See the Earnslaw is 110 years old today - that's cool

https://www.nzherald.co.nz/travel/queenstown-tourism-icon-tss-earnslaw-celebrates-its-heritage-and-future/4UVAH54YOJSPFS25KBLM3NKC7Y/

[Charlie]

Certainly hearing lots more foreign accents around The mount where I live as tourism opens up again. seems to be south Americans at the mo. Comes in waves .
AIR and THL both seem to be on the rise again.

[winner69]

Back in the good ol days when thl had everything going for it but continually disappointed punters some guru pointed out that there was an inverse correlation between overseas visitor numbers and the thl share price

The more overseas visitors / tourists the more disappointing thl financial performance and share price

Shareholders loved thl though and were so loyal they even rejected a takeover offer $2.80 odd in 2007

Just as well these times are different ….all looking good for the new thl.

Shareprice might even hit 6 bucks again

[winner69]

Some of my back of the envelop workings I did looking at the implications from the proposed merger which I did in haste prior to trading commencing again after the announcement. Defo not advice, as a spreedsheet only as good as its inputs, and I used the relevant synergy information from the THL (being 18m in operating synergies flowing through to EBIT, a one off 40m reduction in net debt, and ~4m of after tax costs associated with the fleet rationalisation. Didn't include the $30m further upside rationalisation as alluded to in the report.) Did two scenarios - looking at the phasing THL suggested, and then just one simple one assuming all synergies finalised in about 3.5 years from right now. 7.5x EBIT multiple applied to incremental operating synergies, and a 15% discount rate (which is high, to reflect relative risk on delivering those synergies).



It's interesting - the theoretical ex price from the merger is about 2.75 (the summed marketcaps prior to the announcement divided by the # of THL shares post merger). Then added the NPV of synergies and fleet rationalisation.

Gets you to about 3.27 (if you ignore the phased delivery of synergies) to about 3.34 if you try to reflect the timing of them as management have guided.

Not a definitive analysis and all the risks on actual ability to delivery those synergies (I actually see this one where its quite possible) hence the high discount rate. Gave me the confidence to buy almost every share once trading commenced from about 2.80 to 2.88, bar the odd parcel.
again do your own research. a lot of theoretical upside but, ya know, a massive ongoing pandemic, borders opening and shutting, new variants, changing government attitudes, no one knows what the new normal is like.

Now the merger likely to go ahead you'll be getting pretty excited about future prospects

Any idea where profits of the combined outfit this might end up next year - been positive updates lately eh

[BlackPeter]

Amazing how the excitement builds again around this company. Feels like the start of their first hype peak.

Just wondering - what happened to the software development project they started to airbnb campervans? Did this project ever reach maturity and did it ever pay back the tens of millions they put into it?

Tourism apparently going up again (and sure - it hardly can get worse, can it?) ... though experts talking about (not just) a cost of living crisis in 2023 ... how many tourists will dare (and be able to afford) to come and how much will THL really cash in?

Any ideas how much hype in the current SP and what's the underlying value?

[Muse]

Now the merger likely to go ahead you'll be getting pretty excited about future prospects

Any idea where profits of the combined outfit this might end up next year - been positive updates lately eh

I'm quietly hopeful - never been a shareholder in THL until now and conscious of its history. The updates from both THL and Apollo have quite positive. I have some friends who own a tourism business and they are chuffed with demand. The currency for in bound tourists is fantastic.

But like anything I'm sure there will be lots of curveballs. Hard to find and keep staff. Next years likely global recession.

I haven't relooked at the numbers since my purchase. Businesses have outperformed but the merger has been recut. A divestment to aussie private equity owned Jucy, and some movements in the terms with Apollo.

Would have been better to wait to purchase, particularly when the word was merger wouldn't happen. c'est la vie. should recut the numbers but don't have the energy

[sb9]

I'm sure the upcoming ASM in less than 2 weeks time will have some more golden nuggets abt the upcoming busy season booking and numbers. Could be a slight upside to guidance given last week or at least commentary to that affect.

Wonder if the ST member @golden city is still holder here...

[NZSilver]

It keeps pushing higher, looking forward to what come out of the ASM - now Apollo has given their market update to. THL Should move towards $4

[sb9]

The good news keeps rolling for THL. Stars are surely aligned for this one as we enter into peak season, $4 is surely on the cards near term.

[Muse]

The good news keeps rolling for THL. Stars are surely aligned for this one as we enter into peak season, $4 is surely on the cards near term.

nice chunky upgrade to expected synergies

[winner69]

nice chunky upgrade to expected synergies

That's not a booklet ....that's what you call a chunky booklet

Hope you read all 392 pages FM

[winner69]

Synergies eh ... the saviour of all mergers ..... makes everything look hunky dory

I've lost count the number of times I've had to say or heard 'Where did all the synergies go' in meetings post mergers / acquisitions / consolidations.

Never mind this deal is different ... they'll possibly end up even more than they've said

Hope those who are leading this deal have read The Synergy Trap: How Companies Lose the Acquisition Game by Mark Sirower.
A great book

[NZSilver]

I agree but in this case management has proven their capabilities over the last few years. Both very similar businesses and therefore there is good reason that it should be well integrated and synergies realised.

[winner69]

Good rise in share price today ….I’ll hold until mid 2024 ……fY23 would have been done and dusted ….H124 will look promising but after that just a hint that things not going to plan …and maybe the first downgrade.

But what the squiggly line on the chart does might determine something else …esp if punters get really really excited and the share price hits 6 bucks next year

Thats my plan

[Muse]

Good rise in share price today ….I’ll hold until mid 2024 ……fY23 would have been done and dusted ….H124 will look promising but after that just a hint that things not going to plan …and maybe the first downgrade.

But what the squiggly line on the chart does might determine something else …esp if punters get really really excited and the share price hits 6 bucks next year

Thats my plan

Sounds sensible.

There could be some catch-up/revenge travel going on now and that could last until the Fed crashes the party next year. Maybe a hangover.

But for now, party on.

[NZSilver]

Well current forecast from the company with higher metrics than 2019 gives you an indication on how far this could go. You would have to add a discount based on current risk free return but $5-6 would be fair. What have they got to get over the line for the apollo aquisition to be locked in? Confirmation will be seen very positively by the market

[buy_high_sell_lo]

Doing some calculations here they are expecting the merger to bring in earnings of 30m

Current THL market cap is $507m with 156m shares outstanding

After the merger there will be an additional 186m/ 3.680818 (conversion rate) = 50.5m shares

Therefore new PE over 20... seems like the markets gotten a little ahead of itself on this one.

[Southern Lad]

Doing some calculations here they are expecting the merger to bring in earnings of 30m.

Dig a little deeper:



THL on a standalone basis expecting FY23 net profit after tax of above $30m, including one off merger transaction costs of $3.5m
Apollo on a standalone basis expecting FY23 net profit after tax of above A$20m, excluding one off merger transaction costs of A$3.1m
Merger synergy benefits expected to deliver a steady state EBIT uplift of $23 to $24m.

[NZSilver]

Well the market agrees, up over 20% in the last week or so when most of the market is in the red.

[NZSilver]

$3.75 by the end of the week?

[sb9]

$3.75 by the end of the week?

Would say more like $4, it all depends on commentary and update at tomorrow's ASM.

[winner69]

Would say more like $4, it all depends on commentary and update at tomorrow's ASM.

Yep, 4 bucks is def on the cards

[sb9]

Yep, 4 bucks is def on the cards

Big close for the day, baking in some hefty update by the looks..

[NZSilver]

Yep, looking forward to what comes out tomorrow

[NZSilver]

Is anyone going to the ASM and can please let is know if there little nuggets of information that come out

[Southern Lad]

Is anyone going to the ASM and can please let is know if there little nuggets of information that come out

You could always watch it online at www.virtualmeeting.co.nz/thl22

[Charlie]

Instructions (nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com) (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/THL/401529/382358.pdf)

[Southern Lad]

Apollo shareholders have overwhelmingly voted to approve the merger with THL under the scheme of arrangement - only one shareholder with 1,550 shares voted against.

Everything appears on track for implementation by month end.

[winner69]

Wonder if the ‘culture’ at thl and Apollo are comparable ……often acquisitions / mergers fail because imposing new cultures on acquired teams was all too hard

Shame if this happened …need this as well as all those synergies.

[sb9]

$4 beckoning?

[sb9]

Should be $4 plus on back of that improved guidance.

[Sideshow Bob]

https://www.nzx.com/announcements/407183

Highlights:

•Statutory net profit after tax (NPAT) of $25.2M (underlying NPAT of $26.3M), an increase of $29.6M on the prior corresponding period (pcp)
•Completion of merger with Apollo Tourism & Leisure Ltd (ATL) on 30 November 2022
•Sale of services (rental) revenue increased by 167% to approximately $134M, reflective of the positive recovery of international tourism and strong average rental yields achieved
•Record fleet sales margins achieved in New Zealand, Australia, Canada and UK/Europe
•Action Manufacturing increased revenue in its commercial vehicle arm (non-thl) by 64%, to approximately $22M
•Based on our current performance expectations for FY23, thl expects to be in a position in August 2023 to declare a dividend. In recognition of the need to balance funding the rebuild of the global fleet with returns to shareholders, any dividend will be smaller than thl’s historical dividend policy(1)
•As previously advised on 15 February 2023, on a pro forma basis(2) (inclusive of ATL’s NPAT for the five months prior to completion of the merger), thl currently expects underlying NPAT for FY23 to be above NZ$75 million(3)

[Muse]

very pleasing result, seems to be going to plan. look forward to the realisation of those synergies. in the meantime has been some excellent sp appreciation and acceleration in trading

[winner69]

very pleasing result, seems to be going to plan. look forward to the realisation of those synergies. in the meantime has been some excellent sp appreciation and acceleration in trading

Yep all looking good for the new thl

But don't forget that commom saying Board Rooms around the world 'Where did all those synergies go'

They already saying synergies are a bit nebulous. From the presentation the other day - 'The identified synergy opportunities are a benefit over the counterfactuals (at the time of the merger) of thl and Apollo continuing to operate as standalone businesses. The further we progress, the more difficult it becomes to accurately measure against these hypothetical counterfactual scenarios'

So we'll never really know what these synergies are.

A bit like touting EPS accretion ... one of those things that can't really be measured

Both sound good though

[zulu]

THL is all set for growth for at least next couple of years. with world tourism rebound, THL is surely going to benefit. fingers crossed though!

[BlackPeter]

THL is all set for growth for at least next couple of years. with world tourism rebound, THL is surely going to benefit. fingers crossed though!

Yes, but ... given that none of this is a secret, you can confidently assume that the expectations for future growth are already baked into todays share price (together with the markets view of the open risks).

[Paint it Black]

Yes, but ... given that none of this is a secret, you can confidently assume that the expectations for future growth are already baked into todays share price (together with the markets view of the open risks).

Good to see Emirates bringing an A380 service back into ChCh. Should be a boost for the campervans.

[zulu]

with projected growth for at least next couple of years, not sure what would be the reason behind CFO selling $100k worth of stock ??






Chief Financial Officer recently sold NZ$100k worth of stock


On the 21st of March, Nicholas Judd sold around 25k shares on-market at roughly NZ$4.00 per share. This transaction amounted to 15% of their direct individual holding at the time of the trade.

[Waltzing]

This is how europeans will be getting around soon....

https://edition.cnn.com/travel/article/tgv-m-france-rail-revolution/index.html

[Balance]

This is how europeans will be getting around soon....

https://edition.cnn.com/travel/article/tgv-m-france-rail-revolution/index.html

Go to China and see how their fast train network is connecting almost all corners of that country, and starting to expand into neighbouring countries.

[Jay]

Tracks not wide enough here for any decent speed trains, apart from anything else

[Fortunecookie]

This is how europeans will be getting around soon....

https://edition.cnn.com/travel/article/tgv-m-france-rail-revolution/index.html

I think their current trains are impressive as it is. I think currently they do over 300kms p/h. The next generation will be double deckers. Looks like it is all in preparation to scale down on short haul flights. Wish we had this in NZ, unfortunately we don't have the population to justify the investment.

[Fortunecookie]

Go to China and see how their fast train network is connecting almost all corners of that country, and starting to expand into neighbouring countries.

I think it's all part of Chinas belt and road initiative. I believe Japan are doing some JV with a couple countries as well.

[dobby41]

Go to China and see how their fast train network is connecting almost all corners of that country, and starting to expand into neighbouring countries.

Yeah, been on them and they are nice and smooth.
Pity a pair of their trains crashed and killed a few people.
Unfortunately, their signaling wasn't an end-to-end system and seems to have been enabled section-by-section.
https://en.wikipedia.org/wiki/Wenzhou_train_collision

[Southern Lad]

Tomorrow’s Investor Day presentation (incorporating a trading update) has been released to the ASX this evening:

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02663771-2A1448351?access_token=83ff96335c2d45a094df02a206a 39ff4

Previous guidance maintained.

[daveypnz]

Getting blasted

[X-men]

Why big drop?

[winner69]

Why big drop?

Maybe headlines like this don’t help

In BusinessDesk

Tourism Holdings notes potential speedbump in earnings forecast

Tourism Holdings predicts it will still report a net profit of at least $48 million in the June year but sees a risk arising if vehicle sales take longer than expected.

[X-men]

Thank u master winner

[gbogo]

sidebar but some myths being perpetuated on here, countered here: https://twitter.com/drdrehistorian/status/1655111203939835904?s=46&t=F2WwHbI3JayvcUgqiWUPDA

[X-men]

Bloody lucky...was going to buy yesterday....but busy at work... forgot about it... otherwise 40c under the water... instantly

[X-men]

Morgans has an add rating and target A$5.15

THL is now trading on a recovery year (FY25) PE of only 8.7x, which is attractively priced for a global, market leader.

[X-men]

Director bought more share yesterday $3.86 total 18200 shares....ehmm...might get in to support her confidence

[zulu]

does anyone has any idea why sudden drop today..down 24c.. sp 3.46 today. results were not that bad.

[X-men]

Brokers were ramping buy couple weeks ago n SP started to fall after the recommendation. I guess it is the fundies taking profit. Now SP looks to go up again

That is how the fundies roll....big trading in the last couple days . They got back with cheaper SP.....rinse n repeat with their own agenda and recommendations

[Filthy]

does anyone has any idea why sudden drop today..down 24c.. sp 3.46 today. results were not that bad.

Hi zulu; the last couple of days trade has been on low volume - so dont read too much into it. also note the strong run since June last year; so while the results seemingly weren't that bad, they likely didn't meet the turn around story that the market had priced in. hope that helps.

[X-men]

FY 23 $48m NPAT confirmed on the last announcement. Although there are a risk that some vehicle sales go through FY24.

End of June past, n today the announcement result is due in August.

THL will resume the dividend. Since thl in SP Asx ordinaries, the SP is quiet volatile. Up n down follows the ASX index.

Pie fund is holding this puppy n very bullish about THL

Looking very closely to add to my portfolio

[X-men]

https://www.newsroom.co.nz/a-chinese-tourism-revolution-heading-for-nz

[winner69]

Just as well thl not dependent on nz

Tourism firms will find it hard to grow revenue, Westpac says

https://www.nbr.co.nz/business/tourism-firms-will-find-it-hard-to-grow-revenue-westpac-says/

[X-men]

https://www.msci.com/index-review

Add to MSCI global index this end of month

[X-men]

Wow...15c dividend!!

NPAT $49.9m ....above the forecast $48m

Did not expect that....I thought would be 8c max...

THL will in MSCI small cap thus Wednesday

[X-men]

Man..wished I bought more when down to $3.35...

[sb9]

Huge result, very pleasantly surprised by such fat divvy (was expecting like max 10c or so), that too fully imputed. Looks like good old days of THL are back.

[X-men]

CEO mentioned...that they wished to have more camper vans coming this summer...as the demand is so high

[X-men]

Dividend 15c....ex date 14th September...2 weeks time

[mr optimistic]

I'm always a little weary when a company this size is paying a dividend. Shouldn't they use the cash to buy more fleet. Or is the Asian Market a long way off from coming to NZ.

[Ricky-bobby]

Resignation of CFO… any thoughts?

[percy]

Resignation of CFO… any thoughts?

Greener pastures.

[X-men]

Tmw AGM....an update will be on tomorrow meeting. Last announcement said they are very positive about the business...so... market looks mute, wait n see tomorrow update

CFO got a new job at old Vodafone

[Ricky-bobby]

Are you going along X-men? Be interested to get your thoughts

[X-men]

No..not going. But from the last announcement....I do feel thier tone was very positive moving forward.

People will cut down the spending but for travelling...I do think people will still going for it despite high interest environment

[X-men]

Estimated forecast NPAT $77.1 m for year 2024

Very positive tone!!! Grant also said... despite all the price increase .. people are keen and accepting the high cost of thier travelling holiday

Watched thier presentation...

[winner69]

Estimated forecast NPAT $77.1 m for year 2024

Very positive tone!!! Grant also said... despite all the price increase .. people are keen and accepting the high cost of thier travelling holiday

Watched thier presentation...

$77m is what they said before ….suppose playing safe for now and keeping the upgrades for later …sneaky eh

[X-men]

Better to be conservative.. upgrades will be an icing on the cake...

But the board is very professional and positive moving forward

[Ricky-bobby]

Thanks x-men. See a big chuck of shares changed hands afterwards.

[X-men]

That was amazing eh ..being fundies ...they are able to change shares in large amount without moving the SP

[BlackPeter]

Estimated forecast NPAT $77.1 m for year 2024

Very positive tone!!! Grant also said... despite all the price increase .. people are keen and accepting the high cost of thier travelling holiday

Watched thier presentation...

Well yes, upbeat tone.

I hate it though, if they pick NPAT targets out of the thin air ... and they did it again. Anybody still remembers what happend to the NPAT target they did set in 2017 for 2020?

[X-men]

Could not blame them... COVID!!!

[BlackPeter]

Could not blame them... COVID!!!

I guess that's the thing with the future - nobody knows what lies ahead - and particularly so in an industry competing for the "nice to have" bit of peoples budgets.

[winner69]

Well yes, upbeat tone.

I hate it though, if they pick NPAT targets out of the thin air ... and they did it again. Anybody still remembers what happend to the NPAT target they did set in 2017 for 2020?

In the good ol’ days thl forecasts and profits were so bad somebody pointed out that there was a negative correlation between reported visitor numbers and thl profit …more tourists less profit

Seems things have changed

[X-men]

For a board that has a gut to give a forecast of NPAT $77 m with current economy conditions...I truly trust them and have a good strong confidence they will achieve it. I don't see any black swam event like covid coming anytime soon.

A lot of companies will not give any forecasts

Based on that the dividend will be 15-20c

Jarden homepage forecasts NPAT 2024 at $48.8 m...way above the broker expectation. So...won't be surprised an upgrade from broker coming up soon

[BlackPeter]

For a board that has a gut to give a forecast of NPAT $77 m with current economy conditions...I truly trust them and have a good strong confidence they will achieve it. I don't see any black swam event like covid coming anytime soon.

A lot of companies will not give any forecasts

Based on that the dividend will be 15-20c

Jarden homepage forecasts NPAT 2024 at $48.8 m...way above the broker expectation. So...won't be surprised an upgrade from broker coming up soon

The thing about black swan events is, that one does not see them before they occur. Did you see Covid before it passed by? See :) ;

So, I am not surprised, you don't see them :) - nobody does.

[X-men]

I saw it ..sold out before Feb 2020 first lock down! Made a million!

[winner69]

That $77m forecast for F24 not that good really …they basically made $81m in F23 (Pro forma underlying NPAT excluding acquisition costs)

Nice they are more ambitious (and hopeful) about the future talking $100m by F26

[X-men]

He said to start....good indication to start..with uncertainty economic considerations..I do really think they are very conservative

[winner69]

He said to start....good indication to start..with uncertainty economic considerations..I do really think they are very conservative

Sorry …I misunderstood you ….yess $77.1m is F23 result and a ‘good starting point’ for F24

They have decided not to provide half-year guidance “as it would not give clarity on the performance of the business across the full year”.

So all good …..on track to $100m

[iceman]

Well yes, upbeat tone.

I hate it though, if they pick NPAT targets out of the thin air ... and they did it again. Anybody still remembers what happend to the NPAT target they did set in 2017 for 2020?

Yes I think many of us remember it well but given what happened with COVID, the Board and Management can not really be blamed for that. I'm glad this was my first share to sell as soon as we started getting news of COVID.

On a different note, I recently completed a drive through 9 states in the USA, mainly following the eastern part of Route 66, in an El Monte RV. Picked up in Chicago and given back in Dallas 2 weeks later. I can not fault the service or the vehicle but one thing that caught my eye was their advertising/marketing and their very confusing branding. We booked with El Monte, knowing it was a THL company. When we took a taxi to the pickup place in Chicago, at the address given, it took us awhile to find it. Turned out it wasn't an El Monte place but a rather run down "Art's RV, authorised Forest dealer". No mention of any affiliation to El Monte or THL, except in the office where some computers displayed THL logos and others El Monte.
Received emails from a THL address. No uniforms worn by staff to display the company they worked for.
As I said, absolutely nothing wrong with the RV or the service but I suspect many customers will get confused. Their branding in the USA certainly could do with some work on it. Great trip all up though.

[BlackPeter]

Yes I think many of us remember it well but given what happened with COVID, the Board and Management can not really be blamed for that. I'm glad this was my first share tos ell as soon as we started getting news of COVID.

On a different note, I recently completed a drive through 9 states in the USA, mainly following the eastern part of Route 66, in an El Monte RV. Picked up in Chicago and given back in Dallas 2 weeks later. I can not fault the service or the vehicle but one thing that caught my eye was their advertising/marketing and their very confusing branding. We booked with El Monte, knowing it was a THL company. When we took a taxi to the pickup place in Chicago, at the address given, it took us awhile to find it. Turned out it wasn't an El Monte place but a rather run down "Art's RV, authorised Forest dealer". No mention of any affiliation to El Monte or THL, except in the office where some computers displayed THL logos and others El Monte.
Received emails from a THL address. No uniforms worn by staff to display the company they worked for.
As I said, absolutely nothing wrong with the RV or the service but I suspect many customers will get confused. Their branding in the USA certainly could do with some work on it. Great trip all up though.

Cheers - interesting story. Wasn't the takeover in 2017? You didn't say when your trip was, but I assume "recent" means within the last year or so - correct?)?

Sure - I don't know when (and if) they decided to rebrand, but given they had more than 5 years to think about it - ending up with a mix of branding is a bit of a concern.

I always had the impression they try to position themselves at the top end of the spectrum, and for that one definitely needs consistent and tidy branding.

[iceman]

Cheers - interesting story. Wasn't the takeover in 2017? You didn't say when your trip was, but I assume "recent" means within the last year or so - correct?)?

Sure - I don't know when (and if) they decided to rebrand, but given they had more than 5 years to think about it - ending up with a mix of branding is a bit of a concern.

I always had the impression they try to position themselves at the top end of the spectrum, and for that one definitely needs consistent and tidy branding.

Just got back 2 weeks ago so traveled the USA for the 2nd half of September. Highly recommended :)

[X-men]

https://www.rnz.co.nz/news/business/502986/summer-looking-very-positive-for-tourism-holdings

Yesterday article.... Grant said this summer is looking very positive

[Ricky-bobby]

Thanks for sharing!

[sb9]

Market pricing in summer/holiday season demand, could easily get close to $5 in the new year

[Ricky-bobby]

Market pricing in summer/holiday season demand, could easily get close to $5 in the new year

I’m hoping so! Iv jumped in, let’s see what happens…

[Southern Lad]

Currently on holiday in Central Otago and notice as many Maui/Britz/Apollo/Mighty vehicles as I can ever remember seeing.

The THL NZ booking engine today details no South Island availability for a one week rental commencing 31 December and the North Island only details one vehicle type available - a 4 berth Britz Wanderer at $7,260 for 7 days.

The Australian booking engine shows a greater degree of vehicle type availability in Australia for the same period at rates just below A$3,000 (and above) for the week.

Will be interesting to see the next trading update in late February (or sooner) on rental yields and resale pricing.

[X-men]

Will be an outstanding result this coming Feb 2024!

The CEO mentioned on the AGM....they are expecting an incredible summer season and wished have more vehicles....

[Sideshow Bob]

https://www.nzx.com/announcements/426448

Summary:
• Net profit after tax (NPAT) of $39.7M, an increase of 58% on the prior corresponding period (pcp)
• Rentals performs well globally, with rental yields growing or remaining stable in all markets
• Continued rental fleet growth, with closing rental fleet of 7,366 up 15% on the pcp
• An interim dividend of 4.5 cents per share declared, 100% imputed and 25% franked
• A challenging global vehicle sales environment sees fewer sales volumes. Gross profit margins are now normalising in most markets, in line with our expectations
• Action Manufacturing and Tourism deliver record half-year results and are on track to deliver record results for FY24
• We currently expect NPAT in FY24 to be around $75M. Rental demand and yields continue to outperform expectations which provides some upside potential. There also remains a level of uncertainty around retail vehicle sales which provides downside risk
• We reiterate our goal to deliver $100M in NPAT in FY26

[X-men]

NPAT $75m

Last year AGM said going to be around $77m

Vehicle sales volume is down....

Not sure the market will like it... arghh....

[Leemsip]

PRetty decent - P/E of 10ish. Seems ok to me

[winner69]

F24 expected npat $75m …….last year $81m ….hmmm

[Muse]

PRetty decent - P/E of 10ish. Seems ok to me

agreed.

about 10.3x PE on FY24 NPAT of $75m. That on the back of management's confidence of reaching $100m by FY26, that's 33% growth in NPAT in 2 years. So maybe $87.5m FY25 NPAT if $ growth even between the next two years.

would imply PE's of 10.3x, 8.9x, 7.6x on prospective results. Plus divies. Not unreasonable in my view. Macro overhang on sentiment obviously.

[Muse]

F24 expected npat $75m …….last year $81m ….hmmm

I enjoy that THL provided 4 sets of NPAT in their FY23 annual report

Statutory NPAT: $49.9m
Underlying NPAT: $47.8m
Underlying Proforma NPAT: $77.1m
Underlying Proforma NPAT adjusted for acquisition accounting: $81.1m

Page 8
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/THL/417232/401640.pdf

[X-men]

Market is not impressed

[winner69]

Not much love for thl these days as share price sitsxatv318

About the same as when they announced Apollo merger

I hear there’s a tourism boom underway

Reminds of the joke of many years ago in that the thl share price is negatively correlated to number of tourists ……might be going back to that trend

[Southern Lad]

Yesterday a Substantial Product Holder notice was filled by the Trouchet Family detailing the sale of nearly 2 million shares on 20 March. The Trouchet’s were the founders of Apollo and received 28.7 million THL shares as part of the merger. The agreed escrow restrictions were that they had to keep 90% of shares until 30 November 2023 and 50% of the shares until 30 November 2024 (unless THL agreed to waive). With a sell down now having commenced, there is a significant overhang of shares which will undermine the THL share price until the sell down is completed (noting it will take time given the 50% restriction until 30 November 2024) or there is some explicit statement from the Trouchet’s that they are committed long term holders for their remaining shareholding.

[winner69]

From the WSJ an American view. Winnebago sales problem seem to be a bit like thl’s -

Good morning, CFOs. Winnebago Industries is facing a challenge with its financial forecasting, telling investors that, in a historically cyclical industry, its plummeting sales are likely temporary—but, in a shaky economy, it isn’t sure when they will fully recover.

Winnebago, best known for making motor homes and camper vans, benefited from a surge in consumer spending on outdoor activities during the early days of the pandemic. But sales to retailers plummeted as concerns about Covid-19 waned and people spent more money on air travel and hotels. High interest rates have also made purchases unaffordable for some buyers. During the quarter ended Feb. 24, net revenue at the company fell 19% from a year earlier, to $703.6 million.

Recreational-vehicle sales typically rise and fall with the economy. Winnebago’s business model is built to weather such downturns, even after RV shipments to retailers sank to the lowest point since 2012. Roughly 85% of the company’s costs are variable, meaning they can be quickly cut, Chief Financial Officer Bryan Hughes said. Over the past year, Winnebago cut its expenses by operating its production lines fewer than five days a week.

[Ricky-bobby]

So if sales slow do they keep these new units flowing into the rental fleet to keep that fresh? Demand for rentals still seems to be strong.

[winner69]

thl share price languishing under $3

About the same as when the Apollo merger was announced

What’s happened in meantime.

[Valuegrowth]

thl share price languishing under $3

About the same as when the Apollo merger was announced

What’s happened in meantime. There is a silver lining now. Middle east, North African and European bound visitors will come to Asian and Pacific region which include New Zealand and Australia.