Tourism Holdings Rentals (THL) H2 2024 earnings summary

Executive summary

• Underlying profit after tax for FY24 was NZD 51.8 million, within guidance, while statutory NPAT was NZD 39.4 million due to a NZD 12.4 million goodwill impairment in the UK/Ireland divisions.

• Record EBIT achieved in New Zealand Rentals and Sales, Action Manufacturing, and New Zealand Tourism divisions, reflecting strong recovery in international tourism.

• Final FY24 dividend declared at NZD 0.05 per share, totaling NZD 0.095 for the year, fully imputed, with a 2% DRP discount available.

• Rental fleet expanded by 10% to 7,921 vehicles, supporting growth in key markets.

• Group Return on Funds Employed (ROFE) was 10.0%.

Financial highlights

• Revenue was NZD 922 million, up 5% year-over-year on a pro forma basis.

• Underlying EBIT was NZD 111.1 million, down 20% compared to pro forma prior year; underlying EBITDA was NZD 206.9 million, down 6%.

• Net debt increased to NZD 446 million at year-end, with leverage ratios remaining appropriate and equity ratio at 37.1%.

• Gross CapEx increased marginally in FY24, mainly for fleet; net CapEx was NZD 167 million.

• Full year dividend payout was 40% of underlying NPAT, at the lower end of policy.

Outlook and guidance

• Underlying NPAT is expected to increase in FY25, with growth in rental hire days across key markets, though recovery in bookings is slowing and may delay return to pre-COVID levels.

• The NZD 100 million NPAT goal for FY26 is now considered unrealistic due to economic headwinds, but long-term confidence in achieving the target remains.

• Fleet CapEx for FY25 will be lower than the past two years, with focus on improving fleet utilization and cost reduction.

• Growth in NPAT for FY25 is expected to be weighted toward the second half.

• RevPAR growth anticipated in FY25, though at a slower rate; utilization improvements are a key driver.