THL in talks on restructuring
A report in NZ’s The Dominion says that Tourism Holdings has been in talks with more than a dozen parties about restructuring of the company, involving potential acquisitions, divestments and joint venturing of assets.
The flurry of activity follows the failure last month of a $277 million takeover bid for Tourism Holdings from Australia’s MFS Living and Leisure (MPY).
THL chief executive Trevor Hall said various proposals had been put to the company after the aborted takeover, adding, “There are over 12 streams of interest and we are just running a filtering process over that at the moment.”
“There’s a lot there that won’t progress but there’s a couple we are interested in,” he said and he would not be drawn on when any deals might be announced or what shape they might take.
THL announced this week a 21.5 per cent increase in after-tax profit to $13.37 million for the year to June, with revenue rising 7.8 per cent to $189.9 million.
The profit figures were slightly better than the company had signalled to the market.
Tourism Holdings is involved in a broad range of tourism-related activities, owning attractions such as Waitomo Glowworm Caves and Kelly Tarlton, and running motor home, campervan and rental car businesses and coach and charter firms.
THL had been trying to sell its tourism leisure group, which includes such operations as the Waitomo Caves and indicative offer of $140 million for this business from MPY led to the bid for all of THL.
Mr Hall said the rentals division had a “superb result”. Its earnings before interest and tax rose to a record $28.2 million, from $23.6 million the year before.
The tourism leisure group increased its EBIT to $11 million from $7 million the year before, but the CI Munro motor home and caravan manufacturing business lost $2.5 million (last year $1.1 million profit) because of one-off costs of shifting and other restructuring.
Tower Asset Management equities fund manager Paul Robertshawe said the result announcement had offered little new information. The key now was what assets were staying with THL and what would be sold. Later there would be the question of whether the money raised would be invested in new businesses, or if some would be returned to shareholders.
Chairman Keith Smith said THL’s trading in the first quarter of the new year was in line with expectations “with generally softer conditions, particularly in the inbound market for tourists from Asia”.
The company’s rentals division had a higher level of first-quarter forward bookings, driven largely by “price-led marketing initiatives”, Mr Smith said.
“The high level of the New Zealand dollar into the first quarter presents a risk to continued booking strength.
“The outlook for all tourism businesses would be positively affected if the recent trend of reductions in the dollar is sustained.”
THL shares closed down 1 cent to $2.17 yesterday.
Report by The Mole
John Alwyn-Jones
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