THL - Tourism Holdings

[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