Tourism Holdings Rentals (THL) H2 2025 earnings summary

Executive summary

• Statutory net loss after tax of -$25.8M for FY25, compared to a net profit of $39.4M in FY24, driven by $54.5M in one-off non-cash impairments in the USA and UK.

• Underlying net profit after tax was $28.7M, down 45% year-over-year from $51.8M, reflecting bottom-of-cycle earnings.

• Results remain below expectations, reflecting ongoing industry-wide challenges and bottom-of-the-market conditions, but a positive outlook is maintained with the business at an earnings inflection point.

• Rental revenue grew 10% to $486.5M, with fleet size up 8% to 8,564 vehicles.

• Strategic initiatives are underway to address underperforming divisions in North America, UK & Ireland, Australian Retail Sales, and Manufacturing.

Financial highlights

• Underlying EBIT fell 22% to $86.8M; underlying EBITDA down 4% to $199.2M.

• Net debt closed at $492M, with leverage expected to decline and future reduction anticipated.

• Group ROFE declined to 6.9% from 10.0% in FY24.

• Operating cash flow is improving due to lower fleet CapEx and better inventory management, with positive operating cashflows of $28.6M, a $124.2M improvement from FY24.

• Sale of goods revenue declined 6% to $451M, while sale of services revenue grew 10% to $486.5M.

Outlook and guidance

• No formal FY26 guidance provided, but a significant step-up in cost reduction and capital discipline is expected, focusing on fleet build, procurement, and digital efficiencies.

• Double-digit rental growth anticipated, with forward bookings in Australasia up 25% year-over-year, though this rate is not expected to hold for the full year.

• Continued strong global rental revenue growth expected, with double-digit forward rental book growth in all markets except the USA.

• Net profit after tax target of $100M within three to four years remains unchanged, excluding acquisitions.

• Sales division outlook remains cautious, with modest volume growth and stable margins; material uplift expected from 2026 onwards, contingent on consumer confidence recovery.