New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

<ul><li>Tourism Holdings (THL) reported a solid 1H24 result but disappointed with a decline in FY24 earnings guidance.</li><li>The result was characterised by robust rental performance, improving contributions from manufacturing and its Waitomo businesses, but a material decline in vehicle sales profits due to lower volumes and weaker margins.</li><li>The new FY24 NPAT guidance of ‘about NZ$75m’ implies a FY24 PE of ~10x. Our one year forward PE is now at ~9x. </li></ul>

Tourism Holdings (THL) reported a solid 1H24 result but disappointed with a decline in FY24 earnings guidance.The result was characterised by robust rental performance, improving contributions from manufacturing and its Waitomo businesses, but a material decline in vehicle sales profits due to lower volumes and weaker margins.The new FY24 NPAT guidance of ‘about NZ$75m’ implies a FY24 PE of ~10x. Our one year forward PE is now at ~9x. 

Tourism Holdings - 1H24 — Don't Let a Pothole Spoil the Journey

<ul><li>Tourism Holdings will report a mixed 1H24 result on 20 February 2024, showing progress on prior year underlying earnings (NPAT forecast of NZ$40.5m compared to NZ$26.3m in 1H23) but down on the pro forma (NZ$55.6m; Apollo included for full six months).</li><li>The result will be weaker than the prior year pro forma given: (1) it cycles the gain on sale of vehicles to Jucy of NZ$9m, and (2) reduced gain on sales given lower margins and acquisition accounting adjustments.</li><li>Moreover, at its Annual Shareholder Meeting in October 2023, management stated that it expects 1H24 to be &lt;50% of FY24. </li></ul>

Tourism Holdings will report a mixed 1H24 result on 20 February 2024, showing progress on prior year underlying earnings (NPAT forecast of NZ$40.5m compared to NZ$26.3m in 1H23) but down on the pro forma (NZ$55.6m; Apollo included for full six months).The result will be weaker than the prior year pro forma given: (1) it cycles the gain on sale of vehicles to Jucy of NZ$9m, and (2) reduced gain on sales given lower margins and acquisition accounting adjustments.Moreover, at its Annual Shareholder Meeting in October 2023, management stated that it expects 1H24 to be &lt;50% of FY24. 

Tourism Holdings 1H24 Preview — Bedding in Apollo

<ul><li>Tourism Holdings (THL) reported a strong FY23 result with pro-forma profits pointing to further strong growth in the year ahead.</li><li>The integration of Apollo is going to plan; acquisition earnings accretion plus synergies are key drivers of near-term growth.</li><li>Moreover, further rental yield increases (led by New Zealand) will soften the impact of falling vehicle sales margins (particularly in North America). </li></ul>

Tourism Holdings (THL) reported a strong FY23 result with pro-forma profits pointing to further strong growth in the year ahead.The integration of Apollo is going to plan; acquisition earnings accretion plus synergies are key drivers of near-term growth.Moreover, further rental yield increases (led by New Zealand) will soften the impact of falling vehicle sales margins (particularly in North America). 

Tourism Holdings - FY23 — Shifting up the Gears

<ul><li>Tourism Holdings (THL) is due to report a strong post-COVID profit turnaround in its FY23 result on 29 August 2023.</li><li>The result will be driven by very strong rental yields across its international vehicle rental markets, robust but declining vehicles sales margins, and seven months contribution from Apollo (ATL).</li><li>Management is guiding to underlying NPAT above NZ$48m, though accepts that delayed vehicle sales deliveries around year end may mean it misses this guidance.</li></ul>

Tourism Holdings (THL) is due to report a strong post-COVID profit turnaround in its FY23 result on 29 August 2023.The result will be driven by very strong rental yields across its international vehicle rental markets, robust but declining vehicles sales margins, and seven months contribution from Apollo (ATL).Management is guiding to underlying NPAT above NZ$48m, though accepts that delayed vehicle sales deliveries around year end may mean it misses this guidance.

Tourism Holdings - FY23 Preview — Accelerating up the Gears

<ul><li>Guidance caveat; positive near-term outlook: THL's trading update leaves FY23 earnings guidance (underlying NPAT above NZ$48m [FB: NZ$49.4m]) unchanged though now qualifies it by suggesting, “there is some risk in meeting our FY23 profit expectations should vehicle sales deliveries delay from Q4 FY23 into July/August 2023</li><li>Prolonged fleet rebuild programme: ​​​​​​​The trajectory of the fleet rebuild is unclear, though management expects it to be sub-10,000 units at year end FY25.</li><li>Balance sheet capacity: THL confirmed that it has sufficient debt funding capacity (supplemented by retained earnings and vehicle sales proceeds) to undertake the fleet rebuild programme without the need for new equity.</li></ul>

Guidance caveat; positive near-term outlook: THL's trading update leaves FY23 earnings guidance (underlying NPAT above NZ$48m [FB: NZ$49.4m]) unchanged though now qualifies it by suggesting, “there is some risk in meeting our FY23 profit expectations should vehicle sales deliveries delay from Q4 FY23 into July/August 2023Prolonged fleet rebuild programme: ​​​​​​​The trajectory of the fleet rebuild is unclear, though management expects it to be sub-10,000 units at year end FY25.Balance sheet capacity: THL confirmed that it has sufficient debt funding capacity (supplemented by retained earnings and vehicle sales proceeds) to undertake the fleet rebuild programme without the need for new equity.

Tourism Holdings: Weather Spoils RV Outing

New Zealand

Tourism Holdings Limited provides tourist services in New Zealand and Australia. The Company's services include campervan and motor homes, car rentals and coach services.  The Company also offers sightseeing tours, Antarctic tourist centers, boating tours and cave expeditions.

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Tourism Holdings (THL NZ)

Tourism Holdings - 1H24 — Don't Let a Pothole Spoil the Journey

For a business that should deliver returns in excess of cost of capital through the cycle, we find this attractive. OUTPERFORM.

Forsyth Barr

Tourism Holdings 1H24 Preview — Bedding in Apollo

Tourism Holdings will report a mixed 1H24 result on 20 February 2024, showing progress on prior year underlying earnings (NPAT forecast of NZ$40.5m...

Forsyth Barr

Tourism Holdings - FY23 — Shifting up the Gears

Tourism Holdings (THL) reported a strong FY23 result with pro-forma profits pointing to further strong growth in the year ahead.

Forsyth Barr

Tourism Holdings - FY23 Preview — Accelerating up the Gears

Management is guiding to underlying NPAT above NZ$48m, though accepts that delayed vehicle sales deliveries around year end may mean it misses this...

Forsyth Barr

Tourism Holdings: Weather Spoils RV Outing

Tourism Holdings (THL) hosted a very well attended investor day and provided a trading update leaving FY23 earnings guidance unchanged, but scope...

Forsyth Barr

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