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Tourism Holdings lifts full-year guidance for third time, reviews capital structure

Tourism Holdings, the largest campervan rental business in Australia and New Zealand, has boosted full-year guidance for a third time and hired First NZ Capital to review its capital structure.

The Auckland-based company said it expects annual profit to be between $19.5 million and $20 million in the year ending June 30, from the $11.1 million it recorded in 2014. Tourism Holdings has lifted its annual forecast twice before, in December it expected at “at least $17 million”, an upgrade for its earlier November range of between $15 million and $16 million.

The company has improved earnings across its businesses by selling off excess fleet capacity and focussing on margins. The company is looking to leverage earnings from New Zealand’s booming tourism market to fund growth in the international motorhome market. It expects profit increases to be led by growth in its local and Australian rentals businesses, as well as cost cutting.

The near doubling of annual profit includes two one-off items, with a $1.6 million lift from the early termination of Alpine Bird after its 2012 merger with Kea, which is offset by a $1.5 million drop in the valuation of its Hamilton building which it is in the process of selling. Tourism Holdings also reduced its debt forecast to between $65 million and $70 million, down from guidance it gave at its first-half earnings in February of a range between $80 million and $85 million.

The company has also hired First NZ Capital to review its capital structure as it looks for a way to “maximise shareholder value”. The shares last traded at $1.61 and have fallen 11 percent since the start of the year, having risen to a seven-year high of $1.90 in February. Tourism Holdings has announced an interim dividend of 5 cents per share, up from 2 cents a year earlier. In 2007 shareholders rejected a takeover bid by Australian company MFS Living and Leisure when the shares were at $2.80.

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