THL - Tourism Holdings

[nocomment]

i thought theyd be riding high on a weak nzd?

[winner69]

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

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



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

[Justin]

i thought theyd be riding high on a weak nzd?

weak nzd means higher pertol or diesel

[pg0220]

weak nzd means higher pertol or diesel

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

[Justin]

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

Agreed，everything has two sides

[Justin]

Results Presentation FY 18, p44 http://nzx-prod-s7fsd7f98s.s3-websit...893/285512.pdf

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

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

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

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

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

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

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

[iceman]

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

[Leftfield]

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

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

[iceman]

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

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

Pretty much same situation here Left Field

[simla]

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

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

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

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

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

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