News from AAP

Campervan firm hit by Australian downturn

Print This Post A A A

Tourism Holdings, which merged its campervan rental business with two rivals last year, has posted an annual profit at the lower end of its forecast range as weak demand in Australia weighs on earnings.

Earnings before interest, tax and financing costs fell 11 per cent to $NZ14.6 million ($A12.87m) in the 12 months ending June 30, compared with the company’s forecast of $NZ14m-$NZ16m.

Sales rose 12 per cent to $NZ224.6m, the Auckland-based company said.

Tourism Holdings has expanded its business in New Zealand, buying rivals United Campervans and KEA Campers, on the expectation it can reduce overall fleet numbers and improve margins.

Earnings at the New Zealand unit remained unchanged at $NZ5.5m in 2013 as the company cut four fleet categories from its campervan operation, merged its two budget brands, outsourced its car rentals business and developed an RV Super Centre in Albany.

“We would expect New Zealand rentals to see double-digit growth in hires,” the company said.

“Longer term, the reduction in industry capacity in the market should underpin earnings growth in the coming years to achieve acceptable returns.”

In Australia, revenue fell five per cent to $NZ86.8m and earnings dropped 68 per cent to $NZ1.3m as tight economic conditions in Europe and a higher Australian dollar made the destination unattractive for tourists.

“Australia will remain tough in the coming year,” the company said.

“We expect revenue to fall but operating earnings should improve.”

In the US, which is the company’s largest campervan market, earnings increased 14 per cent to $NZ6.5m. It expanded to the US in December 2010 when it bought the existing Road Bear business, said the market is showing revenue growth in line with expectations.

A forecast for the first half of its 2014 financial year is expected at its annual meeting in November.

Net profit fell 12 per cent to $NZ3.8m in the 2013 year which it said is not directly comparable as the latest year includes $NZ4.5 million of earnings from KEA and United and $NZ1.4m of merger costs, while the year earlier included a one-time $NZ4.5m earnings benefit from the Rugby World Cup.