THL Interim Results FY18
Tourism Holdings Limited
Tel: +64 9 336 4299
The Beach House
Email: info@thlnz.co.nz
Level 1, 83 Beach Road
www.thlonline.com
Auckland City
PO Box 4293, Shortland Street
Auckland 1140, New Zealand
Client Market Services
NZX Limited
Level 1, NZX Centre
11 Cable Street
Wellington 6011
22 February 2018
TOURISM HOLDINGS LIMITED FY18 INTERIM RESULTS
Dear Sir/Madam
In accordance with the NZSX Listing Rules, I enclose the following for release to the market in relation to Tourism Holdings
Limited’s FY18 interim results:
1. Appendix 1
2. Media Release
3. FY18 Interim Report
4. FY18 Interim Results Presentation
5. Appendix 7
Tourism Holdings CEO, Grant Webster, and Chief Financial Officer, Mark Davis, will discuss the FY18 Interim Results at 12.00
Midday New Zealand time today.
Details are available at http://www.thlonline.com/FinancialInvestorInformation/Pages/AnnualandInterimReports.aspx
Yours sincerely
Mark Davis
Chief Financial Officer
---
Tourism Holdings Limited
Results Announcement to the Market
Reporting period 1 July 2017 to 31 December 2017
Previous reporting period 1 July 2016 to 31 December 2016
Financial Results NZD $M FY18 FY17 % Change
Revenue from ordinary activities $209.1M $146.0M +43%
Operating profit before tax $29.9M $17.7M +69%
Tax on operating profit
1
$7.1M $6.4M +11%
Profit from ordinary activities after tax
attributable to security holders
1
$22.8M $11.3M +102%
Net profit attributable to security holders
1
$22.8M $11.3M +102%
Earnings per share from continuing
operations cps
1
18.9cps 9.7cps +95%
Net Tangible Assets per Ordinary Share $1.41 $1.33 +6%
Interim Dividend FY18
Dividend per share 13 cents per share
Imputation % 50% imputed
Imputed amount per share 0.025278 cents per share
Record date 4 April 2018
Payment date 16 April 2018
Dividend Reinvestment Plan (DRP) For this dividend, a discount of 2% is available
to shareholders participating in the DRP.
Elections to participate in the DRP close at
5.00pm on 4 April 2018.
The financial results for the half year to 31 December 2017 include the result for El Monte
RV, a USA based RV rental and sales business that was acquired on 1 January 2017.
1
The results also reflect the impact of changes in US Federal tax rates, which became
effective during the reporting period. The financial impact of these items is explained in
the Interim Results Presentation and the Interim Financial Statements. There is a non-
recurring benefit of $1.8M arising from the re-measurement of deferred tax assets and
liabilities arising from the tax rate change, included in the results above.
---
Tourism Holdings Limited
Tel: +64 9 336 4299
The Beach House
Fax: +64 9 309 9269
Level 1, 83 Beach Road
www.thlonline.com
Auckland City
PO Box 4293, Shortland Street
Auckland 1140, New Zealand
22 February 2018
NZX | MEDIA RELEASE
TOURISM HOLDINGS LIMITED (thl)
HALF YEAR RESULTS TO 31 DECEMBER 2017
thl half-year NPAT up 102%, including $1.8M non-recurring tax benefit. Another record result.
Highlights:
NPAT of $22.8M compared to $11.3M prior corresponding period (pcp), up 102%
NPAT excluding non-recurring items was $21.0M compared to $11.3M pcp; up 86%
Revenue growth of 43% on the pcp
Dividend declared of 13cps (partially imputed to 50%), up 30%
Forecast full-year NPAT, including all non-recurring items, of $55M-$59M
Forecast full-year NPAT, excluding non-recurring items, of $36M-$40M
The El Monte RV business delivered USD$7.2M EBIT for the 2017 calendar year, compared to a
target of USD$6.6M
thl today released its half-year results to 31 December 2017 with a net profit after tax (NPAT) of $22.8M, up
102% on the prior corresponding period. Total revenue was $209M, up 43% on the pcp, with operating
earnings before interest and tax (EBIT) up 78%.
The result included the El Monte RV business, which was not in the prior corresponding period, as well as a
non-recurring tax benefit and a lower tax expense due to the new USA tax legislation introduced in
December 2017.
Chairman, Mr Rob Campbell, said, “it is pleasing to see most of the core businesses continue to improve, as
well as seeing the El Monte RV business outperform our expectations for the calendar year. The new joint
venture announced last week with Thor Industries will only enhance the prospects of thl. We remain
focused, aware of our opportunities to improve what we have today, whilst creating another exciting
future.”
Earnings per share were up 95% and the net debt of $178M was below the forecast of $200M.
CEO, Mr Grant Webster, said, “we increased our debt to acquire El Monte RV and have delivered to stage
one of the integration of that business, whilst reducing debt further than originally planned. The outlook
remains positive and we will continue to grow in a sensible but global manner.”
The outlook and the full results presentation and commentary is available on the Company’s website.
END
2 of 2
Authorised by:
Rob Campbell
Chairman, Tourism Holdings Limited
For further information contact:
Grant Webster
thl Chief Executive Officer
Direct Dial: +64 9 336 4255
Mobile: +64 21 449 210
Mark Davis
thl Chief Financial Officer
Direct Dial: +64 9 336 4212
Mobile: +64 27 444 0199
About thl (www.thlonline.com)
thl is a global tourism operator. We are listed on the NZX and are the largest provider of RVs for rent and sale in Australia and New
Zealand, and the second largest in North America. In the USA we own and operate the Road Bear RV Rentals & Sales brand and El
Monte RV Rentals & Sales. thl is a 50:50 partner, along with Thor Industries Inc. - the largest RV manufacturer in North America (a NYSE
listed entity), in the joint venture company TH2 – TH2 is a global digital platform for the RV industry; it owns and operates several
brands including Roadtrippers, Mighway and CamperMate. In the UK, thl owns 49% of Just go Motorhomes. Within New Zealand we
operate Kiwi Experience and the Discover Waitomo group, which includes Waitomo Glowworm Caves, Ruakuri Cave, Aranui Cave and
The Legendary Black Water Rafting Co. thl is a joint venture partner in Action Manufacturing LP, New Zealand’s largest motorhome
and specialist vehicle manufacturer.
---
2018
INTERIM REPORT
GROWING GLOBALLY
CONTENTS
01Highlights
02 Chairman and CEO report
08Consolidated income
statement
09 Consolidated statement
of comprehensive income
10Consolidated statement
of changes in equity
12 Consolidated statement
of financial position
13Consolidated statement
of cash flows
14Notes to the consolidated
financial statements
28Corporate information
thl Interim Report 2018 01
HIGHLIGHTS
+43%
+30%
(partially imputed)
+78% +102%
$209
M
10.6
M
15
M
18.7
M
33.3
M
13
CPS
$33.3
M
$22.8
M
H1 Revenue
Interim Dividend H1 EBIT
2015
2016
2017
2018
H1 Earnings Before
Interest and Tax
1
H1 Net Profit After Tax
2
1
EBIT excludes joint venture and associates earnings.
2
Includes non-recurring benefit of $1.8M arising from re-measurement of US deferred tax.
All increases are compared to the prior correspondending period (pcp).
02 thl Interim Report 2018
Dear Shareholders
We are pleased to present thl’s interim report for
the first half of the 2018 financial year.
Last week we announced the next step in the
development of the business, with what has the
potential to be the most exciting addition to the thl
group since its inception in 1986. The formation of
TH2, a joint venture between thl and Thor Industries
Inc., to create a global digital platform for the industry
will leverage proven skill sets in thl and Roadtrippers,
along with the significant expertise and scale of Thor,
who are the largest manufacturer of RVs in the world.
thl and Thor, both publicly listed, and showing strong
growth over the past five years, have very similar core
values. Any joint venture depends on the relationship
and alignment of the members. We are confident
today that we have strong alignment.
This opportunity has been structured to enable thl
to leverage the success of the joint venture, while
continuing to develop the core business globally.
We will not take our eye off what has assisted our
recent successes and we will not stop addressing
the areas that require improvement in the business.
Growth does need to be sustainable and the business
will continue to check and monitor the impact on
the environment, community and the team we rely
on to perform.
The result for the half-year is strong and includes
some one-off items. We have highlighted those items
and note that this is the first time El Monte RV has
been included within this half period result.
As part of our responsible tourism operator goals,
we launched a new values-based communication to
customers at the end of the half-year. Kiwipledge
provides an opportunity for customers to see, in a
fun manner, what we stand for as a country and,
importantly, provides some key statements to guide
them on how to behave and act when travelling in
New Zealand. There is no direct commercial benefit
we are seeking from this initiative and we will work
collaboratively with the industry to refine and release
the Kiwipledge, or similar concepts, more broadly
for the betterment of all. Visit the pledge at
www.kiwipledge.co.nz.
Chairman and
CEO Report
thl Interim Report 2018 03
The outlook for all operating markets into FY19 is
currently positive, although there does appear to
be a greater price sensitivity and the increases in yield
achieved broadly by the industry over the last two
years will likely stabilise.
Competitor activity is as we had expected and,
pleasingly, any fleet growth in markets seems to
be well aligned with increases in demand.
There has been growth globally in the size of fleets
operated by the sharing economy players in our
industry segment, however we have seen positive
growth in overall demand as a result. The sharing
economy platforms offer more fleet at peak periods
and increase availability for events and locations
that don’t always work financially or logistically for
large own fleet operators. Mighway is obviously a
beneficiary of this growth and has a positive future.
BUSINESS PERFORMANCE
Revenue for the period was up 43%, to $209M.
Rental and services revenue was $136M, up 40%
and vehicle sale revenue was $73M, up 49% on the
prior corresponding period (pcp).
Of this, El Monte RV contributed $29M in rental
revenue and $15M in vehicle sale revenue.
The geographical revenue split saw New Zealand
fall below 50%, achieving 36%, the USA growing to
44% and Australia at 20%. This has been a planned
diversification and reflects an ongoing trend we
expect in the business.
This report provides you with some insight on the last
six months for the business and a guide to where we
see the full year for FY18. If you have not yet reviewed
our 2017 Sustainability Report, please do so by visiting
the thl website – www.thlonline.com – and provide
us with your feedback and hold us to account for our
progress in all aspects of our business.
Business Update
PROFIT GUIDANCE
The half-year results for the business are better than
we had originally anticipated, with strong results from
El Monte RV in the USA, compared to forecast, and
NZ Rentals, which has had another record result.
The result for the full-year will include the non-recurring
gain from the change in US tax legislation (deferred
tax balance re-measurement) and the gains associated
with the TH2 joint venture creation. We have provided
a forecast with and without these items.
We are forecasting an NPAT result for the full year
of between $55M and $59M, including the non-
recurring items, and $36M and $40M excluding them.
We should note that the impact of the lower US tax
rate on the current year tax expense is not considered
a non-recurring item, although the deferred tax
balance re-measurement is. The federal tax rate has
moved from 35% to 21% and, for thl, has effect for the
full 2018 financial year. It should also be noted that
the final value of the gain from the TH2 transaction is
subject to the finalisation of the fair value accounting
and exchange rate movement. An assumption of an
NZD:USD exchange rate of 0.73 has been applied.
We have made no changes to dividend policy and
continue to expect to pay dividends at the upper end
of our 75-90% payout policy.
OUTLOOK AND THE BROADER BUSINESS
ENVIRONMENT FOR THL
From a thl perspective, the volatility in the financial
markets has not had any impact on the desire for
people to explore, book and travel globally. We did see
a drop in visitor numbers from Europe and the UK to
the USA throughout the 2017 calendar year; however,
movement in exchange rates between the Euro and
USD seems to have compensated for any perceived
political influence on demand.
“
The half-year results for the
business are better than we
had originally anticipated,
with strong results from
El Monte RV in the USA,
compared to forecast, and
NZ Rentals, which has had
another record result.
”
04 thl Interim Report 2018
In absolute numbers, the total New Zealand
revenue for the business grew by $7.9M.
Operating profit before interest and tax (EBIT)
was up $14.6M, or 78%, on the pcp. NPAT of
$22.8M was up 102% on the pcp.
The non-recurring gain in the period related to
a re-measurement of the deferred tax balance for
the USA post the changes to the tax legislation in
that jurisdiction. This resulted in the gain of $1.8M.
The change in tax rate also reduced the tax
expense by $2.3M for the half-year.
NZ Rentals
There was a significant improvement in the
New Zealand Rentals business, with EBIT of
$6.6M compared to $3.7M in the pcp, an increase
of 78%. The 16% increase in rental revenue for the
half included approximately 3% that can be directly
attributed to the Lions’ tour. The consequential
benefit of the Lions’ tour to EBIT was
approximately $1M.
The increase in shoulder season revenue is the most
significant driver of the improved result. This is a trend
we believe will continue and aligns with the Tourism
NZ strategy and direction.
Operating costs have been well controlled with
some benefit from the pre-Lions’ tour maintenance
work, which was conducted in May and June 2017,
which was included in the FY17 result.
Vehicle sales revenue increased 13%, with volume
up 15%. The difference is primarily mix, with margins
in line with expectations. We continue to monitor
margins in vehicle sales and have been more
aggressive with imported product and the LDV
chassis vehicles in the last few months. This is very
well-aligned with the business plan for the year and
the expectations we have released to market over
the last six months.
FY19 currently looks positive, with further
growth expected.
Australian Rentals
The Australian business EBIT growth of 4% in AUD,
was achieved on the back of an 8% increase in rental
income (9% EBIT growth in NZD due to exchange rate
movements). The Australian business is at a point
where utilisation is near a peak in nearly all months.
We are growing the fleet in a slow, flexible and
controlled fashion to leverage the overheads and grow
EBIT. We have increased flexible fleet for the summer
period and are happy with the progress to date, which
will be reflected in the full year results for Australia.
Costs continue to be well managed, with initiatives
such as telematics continuing to provide an improved
customer experience and lower operating costs.
USA Rentals – Road Bear
In USD terms, rental revenue was up 6% on the pcp
and EBIT was flat. The business continues to provide
the highest ROFE within the rentals group in thl and
has little sign of abating. The US Travel Association
has indicated that international visitor spend in the
year to November 2017 dropped by 3%.
Within the result, there were additional costs
with the mediated settlement of a legal issue which
cost USD$0.5M.
After the increase in operating costs experienced in
FY17 to allow the growth in the business, we saw good
cost control in the first half of FY18 when considering
the growth in vehicle sales of 14%.
Vehicle sales revenue was up 20% in USD, with a
total of 427 vehicles sold for the half and a total of
754 for the calendar year.
The property in Orlando, which was owned, has
been sold with a March 2018 settlement. The business
will move to the El Monte RV site in Orlando, which
has ample capacity and strong street frontage.
There is a small gain on sale, which will be reflected
in the year end results.
“
The Australian business is at
a point where utilisation is near
a peak in nearly all months
”
thl Interim Report 2018 05
The Road Bear outlook for FY19 is positive at this
point in time, with rental demand looking strong for
the high season and vehicle sales demand remaining
constant. We expect to see more modest growth in
Road Bear over the coming two years, but we remain
in line with our long-term forecasts and excellent
ROFE performance.
USA Rentals – El Monte RV
The revenue result of $29M rental revenue and
$15M in vehicle sale revenue was above our forecast
for the period, which had been lowered from the
original expectations based on the political changes
at the start of the 2017 calendar year.
The key focus point goals for the year are on track.
We have included a scorecard in the investor
presentation pack and encourage shareholders to
look at that detail to assess the performance.
We have invested in new fleet for El Monte RV, which
will all be operational for the calendar 2018 summer
season. The average age will continue to drop from
the current position of 2.4 years and is well down on
the average age at acquisition, which was 3.7 years.
Operating costs have been well controlled.
The expected synergies and lower R&M costs due
to the newer fleet have been achieved. Property
synergies are on track.
The integration, to date, has gone well and we have
high expectations for the total USA business over the
coming years, with targeted growth in the quantity
and quality of earnings.
Tourism Businesses
The tourism business continued to grow as a group,
with a 3% increase in revenue to $18M.
The Waitomo group visitor growth exceeded the
overall inbound visitor growth. Kiwi Experience was
stable, but did not grow in the manner we desired,
possibly reflecting some share shift to competitors
and other types of travel; however, more substantially
reflecting the lower UK and European backpacker
visitor numbers, which have been the mainstay of the
Kiwi Experience business for many years.
EBIT for the group was $4.7M for the half, an
increase of 9% over the pcp. Return on funds for these
businesses is still well above standard expectations
and the capital draw expected over the coming years
is minimal.
The outlook for the second half is positive with
continued growth forecast.
Waitomo, in particular, has a strong linkage
to overall visitor arrival growth and is well
positioned to continue to grow market share
of total International arrivals.
Group Support and Other
Ongoing group support costs have been well
managed. We continue to focus on leveraging
these costs across the larger thl group.
Mighway is included within this segment. Owner
numbers have continued to grow, with around 700
owners on the platform in New Zealand. The business
is profitable in New Zealand over the peak season.
We have been pleased with growth in USA owner
numbers, however rental demand generation has been
slower than anticipated. Mighway will move into the
TH2 joint venture, and we expect to see rental growth
in the USA over the coming year.
“
The outlook for the second
half is positive with continued
growth forecast. Waitomo,
in particular, has a strong
linkage to overall visitor arrival
growth and is well positioned to
continue to grow market share
of total International arrivals.
”
06 thl Interim Report 2018
Associates and Joint Ventures
EQUITY INVESTMENT REPORTING
It is timely to remind shareholders that these
part-owned businesses are not controlled by thl
and are equity accounted. The results are not
reported in the Earnings Before Interest and Tax
(EBIT) and are not included in our core ROFE
calculations. We do, however, measure each of the
businesses on both ROFE and other metrics
more akin to their business model.
ACTION MANUFACTURING (50%)
Action Manufacturing had a positive start to the
year and has, yet again, committed to lowering
the cost of build for some of the core products thl
purchases in New Zealand and Australia.
Production efficiencies (as seen in this half), further
improved manufacturing processes and reductions
in some material costs all contributed to the 40%
improvement in the contribution to thl. Importantly,
the specialist vehicle side of the business has also
performed very well, producing ambulances for
Queensland, Australia as well as St John in
New Zealand, and securing reasonable size
contracts for various new build work in Australia.
The Hamilton business forward bookings for
production slots is strong for the year.
JUST GO (49%)
The underlying growth in fleet and rentals for
Just go was positive and on track with expectations.
NPAT was down 9% in GBP and the translation to
NZD was impacted by a weaker GBP post-Brexit.
The business has absorbed increases in overhead
costs for the period, as it expands both in rentals
and sales. The outlook remains very positive for this
business, both in the current UK site and possible
expansion elsewhere.
ROADTRIPPERS (23% USA, 50% AUSTRALASIA)
Roadtrippers has continued to develop the customer
base, content and data set over the last six months.
Roadtrippers Australia and New Zealand
commenced in the half and has added another
dimension to the current CamperMate offering.
CamperMate has continued to grow active users
in both New Zealand and Australia.
Post the closing of the half, thl entered into
agreements to form TH2, which has entered into
an agreement to purchase 100% of Roadtrippers
and its associated entities. Completion of these
transactions is expected on or around the end
of February 2018.
GENERAL BUSINESS UPDATES
AND INITIATIVES
TH2
The release last week regarding the formation
of TH2 needs little further commentary. We are
confident we have an appropriate partner of this
business and will work with them on ensuring TH2
delivers to its internal goals, easily and effectively.
We strongly encourage shareholders to read the
releases, available on our website.
We are not in a position to detail the path to
profitability for TH2 yet. We would, however,
note that the initial cash on hand is expected to
be sufficient, at this point, with the exception of
acquisitions or new initiatives. The FY18 impact is
included within the forecast slide in the interim
result presentation.
“
Production efficiencies
(as seen in this half), further
improved manufacturing
processes and reductions
in some material costs all
contributed to the
40% improvement in the
contribution to thl.
”
thl Interim Report 2018 07
Grant Webster
Chief Executive Officer
Rob Campbell
Chairman
Sustainability
Post the release of the first sustainability report
in August 2017, we have continued to drive to the
goals we set publicly. We are on track with the FY18
goals and continue to develop the manner in which
the business operates from a sustainability and
culture perspective.
We are very pleased to have received a grant from
the Energy Efficiency & Conservation Authority
regarding our electric vehicle projects. This past
summer we had a trial electric campervan seeking
insights on the journey, the difference in the
experience and to get feedback from the industry
– both customers and providers. This project will
continue aggressively over the coming months.
Capital Structure and Debt
Net debt at 31 December was $178M, compared
to $103M in the pcp. The El Monte RV purchase
increased debt by $79M. Total available debt facilities
for the business are around $250M.
We remain confident with the net debt position
of the company, given the strong asset backing and
equity ratio relative to the industry norm.
Net debt is expected to grow at the year-end, as we
will be in the middle of the USA high season with both
Road Bear and El Monte RV at peak fleet levels.
The forecast net debt for 30 June 2018 is around $190M.
Capital Expenditure
Capital expenditure has been largely as planned,
with a similar mix of flex fleet and core fleet
investments over the period. The target net capital
spend for the year is forecast at around $37M.
Dividend
A partially imputed dividend (to 50%) of 13cps has
been declared, up from 10cps for the FY17 interim
dividend; an increase of 30%.
The Dividend Reinvestment Plan (DRP), which was
launched a year ago, will continue. We are pleased
with the take-up of the DRP and appreciate that
there are a variety of circumstances for shareholders.
08 thl Interim Report 2018
The accompanying notes form part of, and should be read in conjunction with, these financial statements.
NOTES
6 MONTHS TO
DEC 2017
$000’s
6 MONTHS TO
DEC 2016
$000’s
12 MONTHS TO
JUN 2017
$000’s
Sales of services
135,98896,805226,206
Sales of goods
73,07849,160114,595
Total revenue
209,066145,965340,801
Cost of sales
(61,762)(41,018)(92,473)
Gross profit
147,304104,947248,328
Administration expenses
(24,427)(19,032)(44,274)
Operating expenses
(89,493)(68,335)(157,495)
Other income/(expenses), net
(37)1,1571,157
Operating profit before financing costs
33,34718,73747,716
Finance income
154471
Finance expenses
(4,443)(2,471)(6,747)
Net finance costs
(4,428)(2,427)(6,676)
Share of profit/(losses) from associates
7(443)175(186)
Share of profit/(losses) from joint ventures
61,4041,2222,874
Profit before tax
29,88017,70743,728
Income tax expense
2(7,098)(6,437)(13,550)
Profit for the period
22,78211,27030,178
Earnings per share from profit attributable to the equity holders of
the company during the period
Basic earnings per share (in cents)
18.99.725.6
Diluted earnings per share (in cents)
18.19.424.6
Consolidated income statement
For the six months ended 31 December 2017 (Unaudited)
thl Interim Report 2018 09
Consolidated statement of comprehensive income
For the six months ended 31 December 2017 (Unaudited)
NOTES
6 MONTHS TO
DEC 2017
$000’s
6 MONTHS TO
DEC 2016
$000’s
12 MONTHS TO
JUN 2017
$000’s
Profit for the period
22,78211,27030,178
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation movement (net of tax)
124,527546(1,436)
Cash flow hedge reserve movement (net of tax)
5142,0931,560
Other comprehensive income for the period net of tax
5,0412,639124
Total comprehensive income for the period attributable to
equity holders of the company27,82313,90930,302
The accompanying notes form part of, and should be read in conjunction with, these financial statements.
10 thl Interim Report 2018
Consolidated statement of changes in equity
For the six months ended 31 December 2017 (Unaudited)
NOTES
SHARE
CAPITAL
$000’s
RETAINED
EARNINGS
$000’s
CASH FLOW
HEDGE
RESERVE
$000’s
OTHER
RESERVES
$000’s
TOTAL
EQUITY
$000’s
Opening balance as at 1 July 2017
171,24126,552(2,663)(1,186)193,944
Comprehensive income
Net profit for the six months ended 31 December 2017
–22,782––22,782
Other comprehensive income
Cash flow hedge reserve movement (net of tax)
––514–514
Foreign currency translation reserve movement (net of tax)
12
–––4,5274,527
Total comprehensive income
–22,7825144,52727,823
Transactions with owners
Dividends on ordinary shares
3–(13,234)––(13,234)
Issue of ordinary shares
3,556–––3,556
Employee share scheme reserve
–––160160
Total transactions with owners
3,556(13,234)–160(9,518)
Closing balance as at 31 December 2017
174,79736,100(2,149)3,501212,249
NOTES
SHARE
CAPITAL
$000’s
RETAINED
EARNINGS
$000’s
CASH FLOW
HEDGE
RESERVE
$000’s
OTHER
RESERVES
$000’s
TOTAL
EQUITY
$000’s
Opening balance as at 1 July 2016
156,326 19,946(4,223)74172,123
Comprehensive income
Net profit for the six months ended 31 December 2016
–11,270––11,270
Other comprehensive income
Cash flow hedge reserve movement (net of tax)
––2,093–2,093
Foreign currency translation reserve movement (net of tax)
12–––546546
Total comprehensive income
–11,2702,09354613,909
Transactions with owners
Dividends on ordinary shares
3–(11,577)––(11,577)
Issue of ordinary shares
138–––138
Employee share scheme reserve
–––135135
Total transactions with owners
138(11,577)–135(11,304)
Closing balance as at 31 December 2016
156,46419,639(2,130)755174,728
The accompanying notes form part of, and should be read in conjunction with, these financial statements.
thl Interim Report 2018 11
Consolidated statement of changes in equity (continued)
For the six months ended 31 December 2017 (Unaudited)
NOTES
SHARE
CAPITAL
$000’s
RETAINED
EARNINGS
$000’s
CASH FLOW
HEDGE
RESERVE
$000’s
OTHER
RESERVES
$000’s
TOTAL
EQUITY
$000’s
Opening balance as at 1 July 2016
156,32619,946(4,223)74172,123
Comprehensive income
Net profit for the year ended 30 June 2017
–30,178––30,178
Other comprehensive income
Cash flow hedge reserve movement (net of tax)
––1,560–1,560
Foreign currency translation reserve movement (net of tax)
12–––(1,436)(1,436)
Total comprehensive income
–30,1781,560(1,436)30,302
Transactions with owners
Dividends on ordinary shares
3–(23,572)––(23,572)
Issue of ordinary shares
14,816–––14,816
Transfer from employee share scheme reserve
99––(99)–
Employee share scheme reserve
–––275275
Total transactions with owners
14,915(23,572)–176(8,481)
Closing balance as at 30 June 2017
171,24126,552(2,663)(1,186)193,944
The accompanying notes form part of, and should be read in conjunction with, these financial statements.
12 thl Interim Report 2018
Consolidated statement of financial position
As at 31 December 2017 (Unaudited)
NOTES
DEC 2017
$000’s
DEC 2016
$000’s
JUN 2017
$000’s
Assets
Non-current assets
Property, plant and equipment
4336,917254,073340,156
Intangible assets
42,15620,22542,385
Advance to and investments in joint ventures
66,3934,6776,205
Investments in associates
74,07011,53910,794
Total non-current assets
389,536290,514399,540
Current assets
Cash and cash equivalents
13,4738,1326,117
Trade and other receivables
45,31242,72126,892
Inventories
42,06119,84935,761
Advance to joint venture
627370394
Taxation receivable
2,4672,8421,323
Derivative financial instruments
1062––
Assets held for sale
1312,765––
Total current assets
116,16773,91470,487
Total assets
505,703364,428470,027
Equity
Share capital
174,797156,464171,241
Other reserves
3,501755(1,186)
Cash flow hedge reserve
(2,149)(2,130)(2,663)
Retained earnings
36,10019,63926,552
Total equity
212,249174,728193,944
Liabilities
Non-current liabilities
Interest-bearing loans and borrowings
8169,371110,719181,943
Derivative financial instruments
103,0332,6583,431
Deferred income tax liability
22,07514,55417,155
Total non-current liabilities
194,479127,931202,529
Current liabilities
Interest bearing loans and borrowings
822,545411494
Trade and other payables
34,21125,29239,418
Revenue in advance
29,97227,81621,907
Employee benefits
7,7885,5928,847
Derivative financial instruments
1029301259
Current tax liabilities
2,1362,3572,629
Liabilities directly associated with assets classified as held for sale
132,294––
Total current liabilities
98,97561,76973,554
Total liabilities
293,454189,700276,083
Total equity and liabilities
505,703364,428470,027
The accompanying notes form part of, and should be read in conjunction with, these financial statements.
thl Interim Report 2018 13
Consolidated statement of cash flows
For the six months ended 31 December 2017 (Unaudited)
NOTES
6 MONTHS TO
DEC 2017
$000’s
6 MONTHS TO
DEC 2016
$000’s
12 MONTHS TO
JUN 2017
$000’s
Cash flows from operating activities
Receipts from customers
123,37989,934234,193
Proceeds from sale of goods
73,07849,160114,595
Interest received
154471
Payments to suppliers and employees
(92,580)(72,890)(174,614)
Purchase of rental assets
(85,724)(60,307)(145,539)
Interest paid
(4,443)(2,471)(6,747)
Taxation paid
(4,348)(4,327)(7,378)
Net cash flows from/(used in) operating activities
9,377(857)14,581
Cash flows from investing activities
Sale of property, plant and equipment
457198
Receipts from repayment of advance given to joint venture
63671,5121,613
Purchase of property, plant and equipment
4(2,004)(4,094)(7,061)
Purchase of intangibles
(459)(1,243)(1,508)
Dividends received from associates
–250250
Investments in associates and joint ventures
(100)(7,575)(7,575)
Acquisition of El Monte RV
––(77,620)
Net cash used in investing activities
(2,191)(11,143)(91,703)
Cash flows from financing activities
Net proceeds from borrowings
89,82028,639101,837
Dividends paid
3(9,789)(11,577)(22,410)
Proceeds from share issue
––846
Net cash flows from financing activities
3117,06280,273
Net increase in cash balances
7,2175,0623,151
Opening cash
6,1173,0203,020
Foreign currency translation adjustment
13950(54)
Closing cash
13,4738,1326,117
The accompanying notes form part of, and should be read in conjunction with, these financial statements.
14 thl Interim Report 2018
Notes to the consolidated financial statements
Index to notes to the consolidated financial statements
Note
About this report 15
Section A – Financial performance 16
1 Segment note 16
2 Income tax expense 18
3 Dividends 18
Section B – Assets used to generate profit 19
4 Property, plant and equipment acquired and sold
during the six month period 19
5 Capital commitments 20
Section C – Investments 21
6 Joint ventures 21
7 Investments in associates 22
Section D – Managing fund and risk 23
8 Borrowings 23
9 Seasonality of business 23
10 Financial risk management 24
Section E – Other 25
11 Related party transactions 25
12 Foreign currency translation reserve 27
13 Assets held for sale 27
14 Events after the reporting period 27
thl Interim Report 2018 15
About this report
Basis of preparation
The primary operations of Tourism Holdings Limited (the
‘Company’ or ‘Parent’ or ‘thl’) and its subsidiaries (together
‘the Group’) are the manufacture, rental and sale of
motorhomes and other tourism related activities. The Parent
is domiciled in New Zealand. The registered office is Level 1, 83
Beach Road, Auckland 1010, New Zealand. Tourism Holdings
Limited is a company registered under the Companies Act 1993
and is an FMC reporting entity under Part 7 of the Financial
Markets Conduct Act 2013.
The interim consolidated financial statements of the Group
have been prepared:
• in accordance with Generally Accepted Accounting Practice
in New Zealand (NZ GAAP). They comply with NZ IAS 34
Interim Financial Reporting and consequently do not include
all the information required for full financial statements.
These condensed Group interim financial statements should
be read in conjunction with the annual report for the year
ended 30 June 2017;
• in accordance with the requirements of Part 7 of the
Financial Markets Conduct Act 2013 and the NZX Listing
Rules;
• under the historical cost convention, as modified by the
revaluation of certain assets and liabilities as identified in
specific accounting policies; and
• in New Zealand dollars with values rounded to thousands
($000’s) unless otherwise stated.
These condensed interim financial statements were approved
for issue on 21 February 2018.
These condensed interim financial statements have not been
audited.
Throughout most months during the financial year, the Group
has net current liabilities excluding assets held for sale. This
arises mainly from the revenue in advance liability that reflects
the collection of rental income from customers prior to the
month of travel. This liability is recognised as revenue in future
months, and does not represent a future outward cashflow.
Comparative information has been restated where needed
to conform to current year classification and presentation.
Comparative information has been reclassified for cost of
sales ($2,221k decrease) and operating expenses ($2,221k
increase). The change primarily relates to certain repairs and
maintenance expenses which have been reclassified from
cost of sales to operating expenses to align with the current
year classification. With the addition of El Monte RV into
the Group in the 2017 financial year, it was considered more
meaningful to group all repairs and maintenance expenses
together as opposed to distinguishing between the expenses
incurred during the life of the vehicle on the rental fleet and the
expenses incurred at the time it is prepared for sale.
Critical accounting estimates and judgement
The preparation of interim financial statements requires
management to make judgements, estimates and
assumptions that affect the application of accounting policies
and the reported amounts of assets and liabilities, income and
expense. Actual results may differ from these estimates.
The estimates used in the preparation of these interim
financial statements are consistent with those used in the 30
June 2017 annual financial statements.
Accounting policies
The accounting policies used in the preparation of these
interim financial statements are consistent with those used
in the 30 June 2017 annual financial statements.
Issued standards and amendments effective
from 1 July 2017
There are no new or amended standards which have been
adopted in the six months ended 31 December 2017 that have
a material impact on the Group.
Notes to the consolidated financial statements (continued)
16 thl Interim Report 2018
Notes to the consolidated financial statements (continued)
Section A – Financial performance
NEW ZEALAND
SIX MONTHS TO DECEMBER 2017
RENTALS
$000’s
TOURISM
GROUP
$000’s
AUSTRALIA
RENTALS
$000’s
UNITED STATES
RENTALS
$000’s
OTHER
$000’s
TOTAL
$000’s
Sales of services
35,72218,25834,18447,663161135,988
Sales of goods
21,076–7,47344,529–73,078
Revenue from external customers
56,79818,25841,65792,192161209,066
Depreciation
(7,930)(824)(7,083)(5,951)(99)(21,887)
Amortisation
(183)(333)(16)–(185)(717)
Other costs
(42,102)(12,399)(28,490)(67,438)(2,686)(153,115)
Operating profit/(loss) before interest and tax
6,5834,7026,06818,803(2,809)33,347
Interest income
––43815
Interest expense
(15)–(496)(962)(2,970)(4,443)
Share of profit from joint ventures and associates
––––961961
Operating profit/(loss) before tax
6,5684,7025,57617,844(4,810)29,880
Taxation
(1,839)(1,385)(1,673)(3,017)816(7,098)
Operating profit/(loss) – after interest and tax
4,7293,3173,90314,827(3,994)22,782
Capital expenditure
35,55634120,4929,41686366,668
Total non-current assets
157,01425,96487,863107,24511,450389,536
Total assets
197,36230,613108,049144,08325,596505,703
Net funds employed
157,31523,45878,764112,40218,753390,692
In this section
This section explains the financial performance of thl, providing additional information about individual items in the income
statement, including segmental information, certain expenses and dividend distribution information.
1. Segment note
The operating segments of thl are made up of the following business operations:
• New Zealand Rentals – Rental of maui, Britz and Mighty motorhomes, and the sale of motorhomes sold under the
RV Super Centre retail brand.
• Tourism Group – Kiwi Experience and the Discover Waitomo Group.
• Australia Rentals – Rental of maui, Britz and Mighty motorhomes and 4WD vehicles, and the sale of motorhomes
sold under the RV Sales Centre retail brand.
• United States Rentals – Rental and sale of Road Bear, Britz and El Monte RVs.
• Other – includes Group Support Services and Mighway. The joint ventures and associates are also included in this category.
thl Interim Report 2018 17
Notes to the consolidated financial statements (continued)
1. Segment note (continued)
SIX MONTHS TO DECEMBER 2016
RENTALS
$000’s
TOURISM
GROUP
$000’s
AUSTRALIA
RENTALS
$000’s
UNITED STATES
RENTALS
$000’s
OTHER
$000’s
TOTAL
$000’s
Sales of services
30,80117,65030,30817,79425296,805
Sales of goods
18,565–5,86424,731–49,160
Revenue from external customers
49,36617,65036,17242,525252145,965
Depreciation
(7,034)(753)(6,089)(2,306)(88)(16,270)
Amortisation
(102)(322)(26)–(324)(774)
Other costs
(38,534)(12,271)(24,442)(30,653)(4,284)(110,184)
Operating profit/(loss) before interest and tax
3,6964,3045,6159,566(4,444)18,737
Interest income
––4–4044
Interest expense
(28)–(280)(139)(2,024)(2,471)
Share of profit from joint ventures and associates
––––1,3971,397
Operating profit/(loss) before tax
3,6684,3045,3399,427(5,031)17,707
Taxation
(1,027)(1,305)(1,602)(3,865)1,362(6,437)
Operating profit/(loss) – after interest and tax
2,6412,9993,7375,562(3,669)11,270
Capital expenditure
28,32370718,13494027948,383
Total non-current assets
147,18527,74671,00626,06518,512290,514
Total assets
182,41130,97987,06341,77622,199364,428
Net funds employed
145,03125,83360,67629,35116,835277,726
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision-maker (CODM). The CODM, who is responsible for allocating resources and assessing performance of the operating
segments, has been identified as the executive management team together with the Board of Directors, who together make
strategic decisions.
Interest income and expenditure are not included in the result for each operating segment that is reviewed by the CODM.
Inter-segment transactions are entered into under normal commercial terms and conditions that would also be available
to unrelated third parties. All revenue is reported to the executive team on a basis consistent with that used in the
income statement.
Segment assets consist primarily of property, plant and equipment, intangible assets, inventories, receivables and operating
cash. Investments in associates and joint ventures, assets held for sale and derivatives designated as hedges of borrowings are
included in “Other” as they are not allocated to specific segments. Net funds employed are total assets less segment non interest
bearing liabilities and cash on hand.
NEW ZEALAND
18 thl Interim Report 2018
2. Income tax expense
Income tax expense is recognised based on management’s estimate of the weighted average annual income tax rate expected
for the full financial year.
In December 2017, a new federal corporate tax rate was enacted in the United States. Consequently, as of 1 January 2018,
the corporate tax rate in the United States was reduced from 35% to 21%. This change resulted in a gain of USD$1.3m related
to the re-measurement of deferred tax assets and liabilities of the Group’s US subsidiaries being recognised during the six month
period ended 31 December 2017.
Due to changes in the depreciation allowable for capital purchases under the new legislation, it is not expected that the Group
will be required to pay income tax in the United States in the current financial year. As a result of this, the reduced federal
corporate tax rate is effective for the Group’s calculation of income tax expense for the current financial year.
3. Dividends
During the six months ended 31 December 2017 the Group paid dividends of $13,234k (11 cents per share). The final and interim
dividends paid in the year ended 30 June 2017 were $11,577k (10 cents per share) and $11,995k (10 cents per share) respectively.
Under the Dividend Reinvestment Plan, 715,928 ordinary shares were issued in October 2017 at an issue price of $4.806 per share
to shareholders who elected to participate in the scheme. 330,115 ordinary shares were issued in April 2017 at an issue price of
$3.515 per share to shareholders who elected to participate in the scheme.
Notes to the consolidated financial statements (continued)
thl Interim Report 2018 19
Section B – Assets used to generate profit
In this section
This section describes the assets thl uses in the business to generate profit, including:
Property, plant and equipment
The most significant component is the motorhome fleet. Premises in general are leased, however significant owned properties
are the Waitomo Caves Visitor Centre, the Waitomo Caves Homestead and the Orlando branch in the United States.
4. Property, plant and equipment acquired and sold during the six month period
MOTORHOMES
$000’s
OTHER PLANT &
EQUIPMENT
$000’s
CAPITAL WORK
IN PROGRESS
$000’s
TOTAL
$000’s
Period ended 31 December 2017
At 1 July 2017
311,13428,12322,549361,806
Additions and transfers from work in progress (net)
74,9251,010(9,267)66,668
Disposals
(51,357)(65)–(51,422)
Transfer to assets held for sale (note 13)
–(1,037)(1,780)(2,817)
Exchange differences
7,027371(2)7,396
Depreciation charge
(19,135)(2,752)–(21,887)
Closing net book amount
322,59425,65011,500359,744
As at 31 December 2017
Cost
405,70149,25711,500466,458
Accumulated depreciation
(83,107)(23,607)–(106,714)
Net book amount
322,59425,65011,500359,744
Reclassification of motorhomes to inventory at balance date
Cost
31,530––31,530
Accumulated depreciation
(8,703)––(8,703)
Net book amount
22,827––22,827
Closing net book amount post reclassification
299,76725,65011,500336,917
Period ended 31 December 2016
At 1 July 2016
218,22824,32822,646265,202
Additions and transfers from work in progress (net)
61,0073,245(15,869)48,383
Disposals
(35,734)(119)–(35,853)
Exchange differences
(1,310)(8)–(1,318)
Depreciation charge
(14,333)(1,937)–(16,270)
Closing net book amount
227,85825,5096,777260,144
As at 31 December 2016
Cost
300,23148,0276,777355,035
Accumulated depreciation
(72,373)(22,518)–(94,891)
Net book amount
227,85825,5096,777260,144
Reclassification of motorhomes to inventory at balance date
Cost
12,166––12,166
Accumulated depreciation
(6,095)––(6,095)
Net book amount
6,071––6,071
Closing net book amount post reclassification
221,78725,5096,777254,073
Notes to the consolidated financial statements (continued)
20 thl Interim Report 2018
5. Capital commitment
Capital commitments relates to the build of the Group’s fleet for the following year.
Capital expenditure contracted for at balance date but not yet incurred is as follows:
DEC 2017
$000’s
DEC 2016
$000’s
JUN 2017
$000’s
Property, plant and equipment
148,01498,15468,847
Notes to the consolidated financial statements (continued)
thl Interim Report 2018 21
Section C – Investments
In this section
thl’s investments comprise subsidiaries, associates and joint ventures. This section explains the investments held by thl, providing
additional information, such as analysis of thl’s associates and joint ventures.
thl’s investments include a 50% interest in Action Manufacturing, a business that manufactures motorhomes for the Group’s
New Zealand and Australian business segments and other speciality vehicles for external customers; and a 50% joint venture
investment in Roadtrippers Australasia Limited Partnership (Roadtrippers Australasia). Other investments include a 49% interest
in Just go, a motorhome rental operation in the United Kingdom; and a 23% interest in Roadtrippers Inc (Roadtrippers USA).
6. Joint ventures
Action Manufacturing LP (AMLP)
thl has a 50% joint venture partner in AMLP, a vehicle manufacturer based in New Zealand. The other 50% partner is Alpine
Bird Manufacturing Limited, which is owned by Grant Brady (refer to note 11). Due to the nature of the contractual rights and
obligations, AMLP is classified as a joint venture for accounting purposes and accounted for using the equity method.
AMLP manufactures motorhomes for the Group’s New Zealand and Australian business segments, and other speciality vehicles
for external customers.
The Group’s recognised interest in AMLP
The following table sets out the Group’s interest in AMLP:
DEC 2017
$000’s
DEC 2016
$000’s
JUN 2017
$000’s
Investment in AMLP
250250250
Profit recognised against the investment balance
6,1432,5864,410
Net investment recognised
6,3932,8364,660
Advance opening balance
3942,0072,007
Net cash advances/(repayment) during the period
(367)(1,512)(1,613)
Advance closing balance
27495394
Net interest in AMLP
6,4203,3315,054
DEC 2017
$000’s
DEC 2016
$000’s
JUN 2017
$000’s
Non-current
6,3932,9614,660
Current
27370394
6,4203,3315,054
The advances from the Group are payable on demand. In previous years the directors did not expect full repayment within the
next 12 months, accordingly only the amount that was expected to be received within 12 months was presented as a current asset.
Interest is payable at a rate of 5.0% per annum.
Notes to the consolidated financial statements (continued)
22 thl Interim Report 2018
6. Joint ventures (continued)
Roadtrippers Australasia
thl has a 50% joint venture investment in Roadtrippers Australasia. The other 50% partner is Roadtrippers USA. Due to the
nature of the contractual rights and obligations, Roadtrippers Australia and New Zealand is classified as a joint venture for
accounting purposes and accounted for using the equity method.
The Group’s recognised interest in Roadtrippers Australasia
The following table sets out the Group’s interest in Roadtrippers Australasia:
DEC 2017
$000’s
DEC 2016
$000’s
JUN 2017
$000’s
Investment in Roadtrippers Australasia
1,8291,7291,729
Profit/(losses) recognised against the investment balance
(518)(13)(184)
Net interest in Roadtrippers Australasia
1,3111,7161,545
Subsequent to 31 December 2017, the investment in Roadtrippers Australasia was contributed as part of the investment in
TH2 (refer to note 13). Accordingly, at 31 December 2017, the investment was classified as an asset held for sale.
Total advance to and investments in joint ventures
DEC 2017
$000’s
DEC 2016
$000’s
JUN 2017
$000’s
Non-current
6,3934,6776,205
Current
1,338370394
7,7315,0476,599
7. Investments in associates
In December 2016, the Group acquired a shareholding of 23.0% of Roadtrippers USA. The investment has been accounted for
as an investment in associate, and the Group’s share of associates losses have been recognised with the Group’s investment.
Part of the equity of Roadtrippers USA includes convertible share options. If all of the share options were to be fully exercised,
the Group’s investment would be diluted to 16.2%. In this situation the Group’s voting rights would not be diluted, and the Group
would retain a seat on the Board of Directors. Consideration has been given to these factors with respect to determining
that the investment is to be treated as an investment in associate.
In March 2015, the Group acquired a shareholding of 49.0% in Skewbald Limited (trading as Just go) for GBP £1,744k.
Just go is a motorhome rental business operating in the United Kingdom. The investment has been accounted for as an
investment in associate and the Group’s share of associates profits have been recognised with the Group’s investment.
The carrying amounts recognised in the balance sheet are as follows:
DEC 2017
$000’s
DEC 2016
$000’s
JUN 2017
$000’s
Just go
4,0703,3283,515
Roadtrippers USA
6,9228,2117,279
Total
10,99211,53910,794
Subsequent to 31 December 2017, the investment in Roadtrippers USA was contributed as part of the investment in TH2
(refer to note 13). Accordingly, at 31 December 2017, the investment was classified as an asset held for sale.
The share of profits/(losses) recognised in the income statement are as follows:
6 MONTHS TO
DEC 2017
$000’s
6 MONTHS TO
DEC 2016
$000’s
12 MONTHS TO
JUN 2017
$000’s
Just go
279339515
Roadtrippers USA
(722)(164)(701)
Total
(443)175(186)
Notes to the consolidated financial statements (continued)
thl Interim Report 2018 23
In this section
This section summarises thl’s funding sources and financial risks.
8. Borrowings
DEC 2017
$000’s
DEC 2016
$000’s
JUN 2017
$000’s
Non-current
169,371110,719181,943
Current
22,545411494
191,916111,130182,437
The Group has the following undrawn borrowing facilities:
DEC 2017
$000’s
DEC 2016
$000’s
JUN 2017
$000’s
Expiring within one year
7,964––
Expiring beyond one year
46,32639,44850,993
54,29039,44850,993
The Group has sufficient working capital and undrawn financing facilities to service its operating activities and ongoing
investment in rental motorhomes. The Group has met all banking covenant requirements in the current period.
9. Seasonality of business
The tourism industry is subject to seasonal fluctuations with peak demand for tourism attractions and transportation over the
summer months. The operating revenue and profits of the Group’s segments are disclosed in note 1. New Zealand and Australia’s
profits are typically generated over the southern hemisphere summer months and the United States of America’s profits are
typically generated over the northern hemisphere summer months. Due to the seasonal nature of the businesses the risk profile
at 31 December 2017 is not representative of all risks faced during the year.
Section D – Managing funding and risk
Notes to the consolidated financial statements (continued)
24 thl Interim Report 2018
10. Financial risk management
The carrying amount of financial assets and financial liabilities recorded in the financial statements approximates their fair values:
• Derivative financial instruments are carried at fair value as discussed below.
• Receivables and payables are short term in nature and therefore approximate fair value.
• Interest bearing liabilities re-price at least every 90 days and therefore approximate fair value.
Financial instruments of the Group that are measured in the statement of financial position at fair value are classified by level
under the following fair value measurement hierarchy:
Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is,
as prices) or indirectly (that is, derived from prices).
Level 3 Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).
There were no changes to these valuation techniques during the period. There were no transfers of derivative financial
instruments between levels of the fair value hierarchy during the period.
Recurring fair value measurements
The following financial instruments are subject to recurring fair value measurements:
DEC 2017DEC 2016JUN 2017
ASSETS
$000’s
LIABILITIES
$000’s
ASSETS
$000’s
LIABILITIES
$000’s
ASSETS
$000’s
LIABILITIES
$000’s
Derivative financial instruments
(Level 2)623,062–2,959–3,690
Notes to the consolidated financial statements (continued)
thl Interim Report 2018 25
In this section
This section includes the remaining information relating to thl’s financial statements which is required to comply with financial
reporting standards.
11. Related party transactions
Key management compensation
6 MONTHS TO
DEC 2017
$000’s
6 MONTHS TO
DEC 2016
$000’s
12 MONTHS TO
JUN 2017
$000’s
Salaries and other short term employee benefits
3,2092,9134,451
Share based payments benefits
160135275
The above includes the CEO, direct reports to the CEO and direct reports to the COO. Total positions included above are 15
(31 December 2016: 14; 30 June 2017: 12).
Executive management do not receive any directors’ fees as directors of subsidiary companies.
Directors’ fees (shares issued in lieu of cash)
At the 2013 annual meeting of shareholders, shareholder approval was obtained for thl to issue shares in whole or in part payment
of directors’ remuneration. Currently, Rob Campbell has elected to receive 50% of his director fee in shares, and Graeme Wong
and Debra Birch have elected to receive 33% of their director fees in shares. Prior to her resignation from the Board of Directors
with effect from 1 November 2017, Christina Domecq had elected to receive 100% of her director fees in shares.
DEC 2017DEC 2016 JUN 2017
No. of shares issued in lieu of cash (000's)
314278
Value of shares issued in lieu of cash ($000's)
145138276
Accrued value of shares yet to be issued in lieu of cash ($000's)
376971
Christina Domecq (Non-executive Director)
Foundry Innovations Limited (Foundry), Ora HQ Limited (Ora), Software Innovation NZ Limited, The Fulcrum Limited (Fulcrum)
and Wild Logic Limited (Wild Logic) are companies in which Christina Domecq is a shareholder. Foundry, Ora, Software Innovation
NZ Limited, Fulcrum and Wild Logic have provided consulting and software development services to thl. The chair of the audit and
risk committee has approved the provision of these services. Christina Domecq resigned from the Board of Directors with effect
from 1 November 2017.
6 MONTHS TO
DEC 2017
$000’s
6 MONTHS TO
DEC 2016
$000’s
12 MONTHS TO
JUN 2017
$000’s
Amounts paid to Ora and Foundry
–50110
Amounts paid to Software Innovation NZ Limited
3336
Amounts paid to Fulcrum
–3838
Amounts paid to Wild Logic
14––
Kay Howe (Non-executive Director)
Supreme Motorhome Manufacturing Limited (Supreme) is owned by entities associated with thl director Kay Howe. Supreme has
provided caravans, parts, and service work to thl.
6 MONTHS TO
DEC 2017
$000’s
6 MONTHS TO
DEC 2016
$000’s
12 MONTHS TO
JUN 2017
$000’s
Payments to Supreme including purchase of motorhomes and caravans
2615895
Sales of motorhomes to Supreme
––279
Section E – Other
Notes to the consolidated financial statements (continued)
26 thl Interim Report 2018
11. Related party transactions (continued)
Cathy Quinn (Non-executive Director)
Cathy Quinn was appointed to the Board of Directors in September 2017. Cathy is a partner at MinterEllisonRuddWatts
(MinterEllison). MinterEllison has provided legal services to thl. The amounts paid for the legal services are set out in the
table below:
6 MONTHS TO
DEC 2017
$000’s
6 MONTHS TO
DEC 2016
$000’s
12 MONTHS TO
JUN 2017
$000’s
Legal services
205169427
Grant Brady (shareholder and director of Alpine Bird (New Zealand) Limited)
Grant Brady, Managing Director of Action Manufacturing, is a minority shareholder and director of Bush Road Enterprises
Limited. thl subleases a property in Bush Road which is owned by Bush Road Enterprises Limited. The lease on this property
was renewed for a further term of six years in April 2015. The cost of the sublease and operating expenses are set out in the
table below:
6 MONTHS TO
DEC 2017
$000’s
6 MONTHS TO
DEC 2016
$000’s
12 MONTHS TO
JUN 2017
$000’s
Cost of sub-lease and operating expenses
297259579
Action Manufacturing LP
Grant Brady is a shareholder in another entity, Alpine Bird Manufacturing Limited which owns 50% of Action Manufacturing
Limited Partnership (“AMLP”) that was set up in March 2012. thl owns the other 50%. AMLP manufactures the motorhomes
and campervans used by Rentals New Zealand, manufactures motorhomes and parts for Rentals Australia, and manufactures
specialty vehicles for external customers. Pricing is based on the cost of manufacture plus an agreed margin set out in the Limited
Partnership Agreement. AMLP also subleases part of the Bush Road property described above. The transactions between AMLP
and thl are set out in the table below:
6 MONTHS TO
DEC 2017
$000’s
6 MONTHS TO
DEC 2016
$000’s
12 MONTHS TO
JUN 2017
$000’s
Purchase of motorhomes by the Group from the joint venture
33,31530,04553,372
Sales of vehicles by the Group to the joint venture
––3,237
Interest charged to the joint venture
64050
Net interest in Action Manufacturing LP (note 6)
6,4203,3315,054
At 30 June 2017, $9,814k (June 2016:$17,235k) was outstanding under a Documentary Letter of Credit in favour of AMLP. This
amount is included in the purchase of motorhomes shown above, and the outstanding amount is included in ‘trade and other
payables’. At 31 December 2017 and 31 December 2016 the amounts outstanding were nil.
Just go
During the six months ended 31 December 2017 the Group purchased motorhomes from Just go with a value of $4,808k
(six month ended December 2016: $5,796k; year ended 30 June 2017: $5,818k).
Schork Family
As part of the consideration for the acquisition of El Monte Rents Inc in January 2017, the Group issued 3,384,266 ordinary shares
to entities associated with the Schork family. Tucker and Todd Schork have been contracted by El Monte Rents Inc to assist with
the transfer to thl management. An entity associated with the Schork family provides warranties to customers of El Monte
Rents Inc, the total amount paid by customers during the six months ended 31 December 2017 was $248k (six months ended
30 June 2017: $389k). At the time of the acquisition, the Group entered into a number of property lease agreements with entities
associated with the Schork family. The leases are in relation to branches used by El Monte RV. The cost of the leases are set out in
the table below:
6 MONTHS TO
DEC 2017
$000’s
6 MONTHS TO
DEC 2016
$000’s
6 MONTHS TO
JUN 2017
$000’s
Rental and operating lease costs
1,425–1,501
Notes to the consolidated financial statements (continued)
thl Interim Report 2018 27
12. Foreign currency translation reserve
Exchange differences arising on the translation of foreign operations are taken to the foreign currency translation reserve.
When any net investment is disposed of, the related component of the reserve is recognised in profit and loss as part of the
gain or loss on disposal.
The closing exchange rates used to translate the balance sheet are as follows:
DEC 2017DEC 2016 JUN 2017
NZD/AUD
0.93360.98680.9767
NZD/USD
0.72960.71610.7540
NZD/GBP
0.54110.58180.5781
13. Assets held for sale
Assets held for sale includes the Orlando Road Bear property which was sold subsequent to 31 December 2017, and the assets and
liabilities relating to Roadtrippers, Mighway and certain thl intangible assets that are expected to be contributed subsequent to 31
December 2017 as part of the investment in TH2 (refer to note 14).
$000’s
Property, plant and equipment
2,817
Intangible assets
1,047
Investments in joint ventures and associates
8,233
Total non-current assets
12,097
Trade and other receivables
664
Inventories
4
Total current assets
668
Total assets12,765
Trade and other payables
2,119
Employee benefits
175
Total current liabilities
2,294
Total liabilities2,294
14. Events after the reporting period
14.1 Investment in TH2
On 16 February 2018, the Group entered into agreements to contribute its investments in Roadtrippers USA and Roadtrippers
Australasia, its Mighway business, the Cosmos rental and RV industry platform, certain other intangible assets and cash to create
a joint venture, TH2connect LLC (TH2), with Thor Industries, a motorhome manufacturer in the United States. The completion of
the transactions is subject to certain conditions being met, however the transactions are expected to settle on 1 March 2018, after
the time these financial statements were approved for issue. The carrying value of contributed assets at the time of settlement
is expected to be $14.9M and as a result of the transaction the Group is expected to recognise a profit after tax and transaction
costs of $17.3M on the contribution.
TH2 will provide digital services to RV owners and operators as well as operating the existing Mighway and Roadtrippers
businesses.
As the transaction occurred subsequent to 31 December 2017, there is no impact on the Consolidated income statement,
Consolidated statement of comprehensive income, Consolidated statement of changes in equity, or Consolidated statement of
cash flows for the six months ended 31 December 2017. The assets and liabilities to be contributed are disclosed as held for sale
at 31 December 2017 and have been presented separately on the Consolidated statement of financial position, and are shown in
note 13.
14.2 Interim dividend
A dividend was declared after balance date at 13 cents per share payable on 16 April 2018.
Notes to the consolidated financial statements (continued)
28 thl Interim Report 2018
Corporate information
®
Directors
Rob Campbell
Debbie Birch
Kay Howe
Cathy Quinn
Gráinne Troute
Graeme Wong
Executives
Grant Webster – Chief Executive Officer
Mark Davis – Chief Financial Officer
Jo Allison – Chief Operating Officer
Keith Chilek – Chief Technology Officer
David Simmons – Chief Operating
Officer New Business Development
Registered office
Level 1
83 Beach Road
Auckland 1010
New Zealand
Share register
Tourism Holdings Limited shares are listed
on the New Zealand Stock Exchange (NZX)
Auditors
PricewaterhouseCoopers
Auckland, New Zealand
Solicitors
Minter Ellison Rudd Watts
Auckland, New Zealand
Bankers
ANZ Bank New Zealand Limited
Australia and New Zealand Banking
Group Limited
Westpac New Zealand Limited
Westpac Banking Corporation
The Hongkong and Shanghai Banking
Corporation Limited
thl Interim Report 2018 29
30 thl Interim Report 2018
thl Interim Report 2018
---
GROWING GLOBALLY
FY–2018
INTERIM RESULTS PRESENTATION: 22 FEBRUARY 2018
Disclaimer
2
This presentation contains forward-looking statements and projections. These reflect thl’scurrent expectations, based on what it thinks are reasonable assumptions.
The statements are based on information available to thlat the date of this presentation and are not guarantees or predictions of future performance. For any number
of reasons, the future could be different and the assumptions on which the forward-looking statements and projections are based could be wrong. thlgives no warranty
or representation as to its future financial performance or any future matter. Except as required by law or NZX listing rules, thlis not obliged to update this presentation
after its release, even if things change materially.
This presentation has been prepared for publication in New Zealand and may not be released or distributed in the United States.
This presentation is for information purposes only and does not constitute financial advice. It is not an offer of securities, or a proposal or invitation to make any such
offer, in the United States or any other jurisdiction, and may not be relied upon in connection with any purchase of thlsecurities. thlsecurities have not been, and will
not be, registered under the US Securities Act of 1933 and may not be offered or sold in the United States, except in transactions exempt from, or not subject to, the
registration of the US Securities Act and applicable US State securities laws. Past performance information given in this presentation is given for illustrative purposes
only and should not be relied upon as an indication of future performance.
This presentation may contain a number of non-GAAP financial measures. Because they are not defined by NZ GAAP or IFRS, thl’scalculation of these measures may
differ from similarly titled measures presented by other companies and they should not be considered in isolation from, or construed as an alternative to, other financial
measures determined in accordance with NZ GAAP.
This presentation does not take into account any specific investors objectives and does not constitute financial or investment advice. Investors are encouraged to make
an independent assessment of thl. The information contained in this presentation should be read in conjunction with thl’slatest financial statements, which are
available at: www.thlonline.com
FY18: Interim Results Presentation
Important Points to Note
3
FY18: Interim Results Presentation
El Monte RV Acquisition
•The purchase of the El Monte RV Rental and Sales business in the USA was effective from 1 January 2017, so there is no comparative result for the year ended 31
December 2016.
•Throughout this presentation we have shown the impact of the El Monte RV acquisition, where appropriate, to aid the understanding of the results.
TH2 Joint Venture
•On 16 February 2018, thlentered into an agreement to form a joint venture with Thor Industries, to be called TH2. Further information on this transaction is included
later in this presentation, and in a separate presentation released to the NZX on 16 February 2018 and available at www.thlonline.com.
•The financial impact of TH2 on the full-year financial result for FY18 is subject to finalisation of fair value accounting and the exchange rates at the date of settlement.
US Federal Taxation
•In December 2017, a new federal corporate tax rate was enacted in the USA. Consequently, as at 1 January 2018, the corporatetax rate was reduced from 35% to
21%. This change has resulted in a non-recurring gain of NZD$1.8M related to the re-measurement of deferred tax assets and liabilities of the Group’s US subsidiaries
being recognised in the six month period ended 31 December 2017.
•Due to changes in the depreciation allowable for capital purchases under the new legislation, it is not expected that the Group will be required to pay income tax in the
United States in the current year. As a result of this, the reduced corporate tax rate is effective for the Group’s calculationof income tax expense in the current
financial year.
General
•All financials in NZ dollars unless stated otherwise (throughout presentation).
•All comparisons are against prior corresponding period.
•The average NZD:AUD cross-rate (average of the six month rates) for H1 FY18 was 0.9395 (FY17 0.9767).
•The average NZD:USD cross-rate (average of the six month rates) for H1 FY18 was 0.7335 (FY17 0.7365).
4
Revenue
$209M
Up by 43%
Earnings before
interest and tax
$33.3M
Up by 78%
Net profit after tax*
$22.8M
Up by 102%
Earnings per share*
18.9c
Up by 95%
Interim dividend
13cps
(50% imputed)
Up from 10cps
(50% imputed)
FY18: Interim Results Presentation
* Including $1.8M non-recurring benefit of re-measurement of deferred tax balances
Financial Highlights H1 FY18
5
Financial Highlights H1 FY18
FY18: Interim Results Presentation
•Strong growth, including first peak season
El Monte RV result, which contributed EBIT of $9.5M.
•Rentals NZ has, again, been astandout performer, with EBIT
growth of 78%.
•Continued growth in Rentals Australia in a competitive
environment.
•Tourism results mixed, with Waitomo growing
but Kiwi Experience down on prior year.
•Group Services and Other EBIT loss reduced
by $1.6M.
•JV & associates –strong growth in Action Manufacturing,
offset by Roadtrippers losses.
•Interest expense increase mainly due to the El Monte RV
acquisition.
NZD $MFY18 H1FY17 H1VARVAR %
Operating revenue209.1146.063.143%
Earnings before
interestand tax
33.318.714.678%
Operatingprofit before
tax
29.917.712.269%
Profit after tax22.811.311.5102%
17.7
29.9
2.9
0.5
9.2
0.4
1.6
0.4
1.9
Profit Before
Tax FY17
H1
Rentals
NZ
Rentals
AU
Rentals
USA
Tourism
Group
Group
Services &
Other
JV &
Associates
InterestProfit Before
Tax FY18
H1
OPERATING PROFIT BEFORE TAX (NZD$M)
6
Key Achievements H1 FY18
FY18: Interim Results Presentation
Strategic Imperatives
•Positive growth in the base business:
•EBIT, excluding El Monte RV, up 25%.
•El Monte RV ahead of expectations.
•TH2 global joint venture with Thor announced 16
February. JV will use digital technology to
leverage the RV ecosystem.
•Sustainability initiatives progressing, including
electric vehicle (EV) trials. EECA grant awarded
to develop EV and holiday parks’ charging
infrastructure.
Continue to build the base
business
Leverage the RV eco-system
Innovate with technology
Do so sustainably
7
●On 16 February 2018, thlentered into an agreement to establish a 50:50 joint
venture with Thor Industries, the leading RV manufacturer globally
2
, to create a
digital platform for RV owners to improve every aspect of RV ownership,
including trip planning and booking, remote monitoring systems,roadside
assistance, and peer-to-peer RV and campsite rental.
●The joint venture, TH2, has entered into an agreement to acquire 100% of
Roadtrippers (“RT”), the US-based travel planning and travel data company
(including RT’s interest in the RT Australasia business, the 50:50 joint venture
between thland RT).
●thlwill contribute approximately USD $2.5M cash in addition to its Mighway
business, Cosmos (thl’s rental and RV industry platform), thl’s shares in RT,
thl’s interest in the RT Australasia joint venture and other IP and ‘know-how’.
●The cash contribution from Thor will be approximately USD $47M.
●The transactions are all expected to close around the end of February 2018,
once Roadtrippers’ shareholder approval has been obtained.
thlCosmos system,
IP and other assets
50%50%
1
For further detail, refer to the TH2 investor presentation released 16 February 2018, -available on the thlwebsite and NZX.
2
Based on volume, including JaycoUSA.
TH2 Key Highlights
1
8
Balance Sheet
FY18: Interim Results Presentation
Net Debt
$178M
last year
$103M
•Net debt, at 31 December 2017, of $178M, is level with June 2017
and below previous guidance of $200M. It is $75M higher than
December 2016 due to the acquisition of El Monte RV.
•We continue to remain comfortable with debt levels and the
debt:EBITDAratio, which we aim to maintain at around 2.0x.
•The forecast of Net Debt at 30 June 2018 is ~$190M and
Debt:EBITDA of ~1.7x.
Debt : EBITDA
1
1.7X
last year
1.4X
90
79
103
176
178
17
10
1.3
1.41.4
1.9
1.7
Dec 15Jun 16Dec 16Jun 17Dec 17
Net Debt
Net DebtLoCDebt:EBITDA
Note 1:Debt:EBITDAis calculated using a 12 month EBITDA. The June 2017 calculation used a proforma
EBITDA for El Monte RV of $13M for the first six months of FY17. Debt used for the calculation
includes the LoC outstanding and derivatives balance.
9
Dividend
FY18: Interim Results Presentation
•Interim dividend is 50% imputed.
•Dividend will be eligible for the Dividend Reinvestment Plan, with an issue price at a 2% discount from the five day volume weighted share price after the record date.
•Record date and DRP election date: 4 April 2018.
•Payment date: 16 April 2018.
5
7
9
10
13
6
8
10
11
FY14FY15FY16FY17FY18
Dividends
InterimFinal
13 cents
+30%
per share 50% imputed
Interim Dividend
D I V I S I O N A L R E V I E W
FY18: Interim Results Presentation
10
Divisional EBIT
FY18: Interim Results Presentation
11
18%
13%
17%
52%
EBIT before Group Services
& Other
Rentals NZTourism (NZ)
Rentals AustraliaRentals USA
27%
9%
20%
44%
Revenue by Geography
Rentals NZTourism (NZ)
Rentals AustraliaRentals USA
Note: EBIT excludes earnings of JVs and Equity Investments
USA contributes the majority of EBIT in H1, due to seasonality.
$M
FY18
FY17
Var
Var %
thl
Rentals
New Zealand
6.6
3.7
2.9
78%
Australia
6.1
5.6
0.5
9%
USA - Road Bear
9.3
9.6
(0.3)
(3%)
USA - El Monte RV
9.5
-
9.5
Total Rentals
31.5
18.9
12.6
66%
Tourism Group
4.7
4.3
0.4
9%
Total operating divisions
36.2
23.2
13.0
56%
Group Support Services & Other
(2.8)
(4.1)
1.3
(32%)
EBIT before non-recurring Items
33.3
19.1
14.2
74%
Non-recurring items
Profit on GeoZone Sale
1.3
(1.3)
Transaction Costs - El Monte RV Acquisition
(1.6)
1.6
EBIT
33.3
18.7
14.6
78%
6 M onths to De ce mbe r
12
Rentals NZ
FY18: Interim Results Presentation
Continued strong performance
•Another very strong result, driven by a
16% increase in rental income, with
approximately a 3% increase from the
Lions’ Tour in July (yield related).
•Lions’ Tour contributed approximately
$1M EBIT in July.
•Rental demand was good across the
shoulder season and into peak. Both yield
growth and hire days have contributed to
the revenue growth.
•Operating costs have been well controlled.
R&M costs have benefited from fleet
maintenance performed in FY17 prior to
the Lions’ Tour.
•Vehicle sales market remains positive.
•Good peak summer bookings.
H2 year-on-year EBIT growth will be
impacted by around $0.5M due to Lions’
Tour in June FY17.
Half Year
NZD $MFY18FY17VAR%
Rentalincome35.730.84.916%
Sale of goods21.118.62.513%
Costs(50.2)(45.7)(4.5)(10%)
EBIT6.63.72.978%
Vehicle Fleet
UNITS:FY18FY17MOVEMENT%
Opening Fleet July1,8301,740905%
Fleet Sales(174)(206)3215%
Fleet Purchases7216408113%
Closing Fleet2,3772,1742039%
13
Rentals Australia
FY18: Interim Results Presentation
Incremental progress
•4% growth in AUD EBIT.
•4WD season has dragged on the H1
results. The utilisation and resulting ROFE
on the 4WD fleet was below expectations.
•8% increase in rental income achieved,
mainly from increases in fleet and hire
days. Market remains competitive.
•R&M and accident repair costs continue to
trend down.
•Our thl-operated Melbourne RV Sales
Centre continues to grow the number of
units sold and is now the largest single
retailer of used thl RVs in Australia.
•Fleet at 31 December up 12% on FY17,
including summer flex fleet.
Half Year
NZD $MFY18FY17VAR%
Rentalincome34.230.33.913%
Sale of goods7.55.91.627%
Costs(35.6)(30.6)(5.0)(16%)
EBIT6.15.60.59%
HalfYear
AUD $MFY18FY17VAR%
Rentalincome32.129.62.58%
Sale of goods7.05.71.323%
Costs(33.4)(29.8)(3.6)(12%)
EBIT5.75.50.24%
Vehicle Fleet
UNITS:FY18FY17MOVEMENT%
Opening Fleet July1,5251,32320215%
Fleet Sales(363)(255)(108)(42%)
Fleet Purchases4303488224%
Closing Fleet1,5921,41617612%
14
Rentals USA –Road Bear
FY18: Interim Results Presentation
A solid result
•A flat result in USD after additional costs of
USD$0.5M to settle a legal issue.
•NZD$0.3M negative impact of FX rates
compared with the prior year.
•Rental income was up 6% against a reported
drop in international visitor spending in the
USA of 3%.
1
•Operating costs well controlled. Growth in
costs of 18% due to legal settlement and
higher vehicle sales volumes.
•Record vehicle sales volume in a strong
market for RV sales.
•Closing fleet at December up, due to timing of
new season purchases earlier than last year.
•Early indications of 2018 peak season are
positive.
•Orlando property has been sold, with
settlement in March 2018. A small gain on
sale will be reflected in the year end results.
HalfYear
NZD $MFY18FY17VAR%
Rentalincome18.617.80.84%
Sale of goods29.824.75.121%
Costs(39.1)(32.9)(6.2)(19%)
EBIT9.39.6(0.3)(3%)
HalfYear
USD $MFY18FY17VAR%
Rentalincome13.913.10.86%
Sale of goods21.818.23.620%
Costs(28.6)(24.2)(4.4)(18%)
EBIT7.17.1(0.0)0%
Vehicle Fleet
UNITS:FY18FY17MOVEMENT%
Opening Fleet July773698
7511%
Fleet Sales(427)(373)
(54)(14%)
Fleet Purchases11010
1001000%
Closing Fleet456335
12136%
1
US Travel Association, Jan 2018. Year to November 2017.
15
Rentals USA –El Monte RV
FY18: Interim Results Presentation
Positive progress to plan
•The result, overall, is ahead of our targeted
USD$6.6M for the calendar year 2017 (actual
was USD$7.2M).
•The travel agent market has responded well to
the newer vehicle proposition.
•Utilisation has increased, as planned, with the
lower fleet and focus.
•Vehicle sales since acquisition have performed
ahead of expectations -615 sold, including all of
the older fleet. The sales market remains strong
and margins have been good.
•The average age of the remaining fleet remains
at 2.4 years, compared with 3.7 years at
acquisition.
•Operating costs have been well controlled. The
expected synergies and lower R&M costsdue to
the newer fleet have been achieved.
•Some planned property synergies replaced with
revenue opportunities from RV storage, by
retaining properties. First joint El Monte RV-Road
Bear site operating from March.
HalfYear
1
NZD $MFY18
Rentalincome29.0
Sale of goods14.7
Costs(34.2)
EBIT9.5
HalfYear
USD $MFY18
Rentalincome21.6
Sale of goods11.1
Costs(25.5)
EBIT7.2
Vehicle Fleet
UNITS:FY18
Opening Fleet July1,290
Fleet Sales(261)
Fleet Purchases0
Closing Fleet1,029
Note 1: No prior year comparison, as acquisition occurred on 1 Jan 2017.
El Monte RV Scorecard Update
16
FY18: Interim Results Presentation
Goal: Achieve 19% ROFE by FY20
EBIT ahead of forecast. Funds employed below forecast.
ROFE
Goal: Property synergies realisedby July 2018
Some planned property synergies replaced with storage rental opportunities.
First joint Road Bear –El Monte RV site at Orlando commencing from March.
Synergies
Goal: 390 sales, including all inventory fleet, by Sept 2017
495 sales achieved by September
Fleet Sales
Goal: CY EBIT of approximately USD$6.6M for 2017
Calendar year EBIT was USD$7.2M.
2017 EBIT
Goal: Forecast debt at December 2017 of approximately $205M
December 2017 actual net debt was $178M.
thlDebt Forecast
Goal: Increase utilisation
Utilisation for H1 FY18 has improved by 20% over the prior year.
Utilisation
On track
On track
An update on the goals we set in December 2016
17
Tourism
FY18: Interim Results Presentation
HalfYear
NZD $MFY18FY17VAR%
Revenue18.317.70.63%
Costs(13.6)(13.4)(0.2)(1%)
EBIT4.74.30.49%
Mixed results
-Waitomo up, Kiwi Experience down
•Waitomo has continued to perform well. Visitor growth
has exceeded overall inbound visitor growth (5%) for
H1. The Chinese, Korean and UK markets have
shown strong growth. Visitation from Australia and NZ
domestic has also shown positive growth. USA visitor
growth was flat following a reduction in air capacity
across the off-season.
•The peak season running into H2 has started
positively for Waitomo.
•The Kiwi Experience EBIT was below expectations
and down on the prior year. Inbound arrivals of youth
backpackers from the UK and Europe are down on
last year.
18
Equity Investments
FY18: Interim Results Presentation
Equity Investment Reporting
•These part-owned businesses are not controlled by thland are
equity accounted. The results are not reported in the Earnings
Before Interest and Tax (EBIT).
Action Manufacturing (50%)
•A positive start to the year driven by production efficiencies.
•Australian opportunities in ambulances and other transport
vehicles coming to fruition, with a full order book for H2.
Half Year
NZD $MFY18FY17VAR%
Action Manufacturing1.731.240.4940%
Just Go0.280.34(0.06)(17%)
Roadtrippers(1.05)(0.17)(0.88)517%
Total0.961.41(0.45)(32%)
Just go (49%)
•Result impacted by weaker GBP after Brexit. NPAT in GBP
down 9%. Good rental income growth offset by higher costs to
scale for expanding fleet.
•Expected improved result across H2 from retail vehicle sales.
Roadtrippers (23% USA, 50% Australasia)
•Roadtrippers’ losses arising from ongoing business
development. Expected to be fully owned by TH2 JV from 1
March.
•Positive progress on development of Roadtrippers’ data product,
CamperMateuser growth and impending launch of Roadtrippers
in NZ and AU.
19
Group Support Services & Other
FY18: Interim Results Presentation
HalfYear
NZD $MFY18FY17VAR%
Revenue0.20.3(0.1)(36%)
Costs(3.0)(4.4)1.432%
EBIT before non-
recurringitems
(2.8)(4.1)1.3(30%)
Profit onsale of GeoZone1.3(1.3)
Transaction costs(1.6)1.6
EBIT after non-recurring
items
(2.8)(4.4)1.637%
•This segment includes Group Support Services and
Mighway in FY18, and GeoZone in FY17.
•The Mighway pre-tax loss for the half year was $1.4M
(FY17 $1.0M). This reflects the ongoing development
of this business, including the launch in the USA.
•Group Support Services costs have been well
controlled.
•Mighway NZ has continued to progress, with over 700
owners on the platform. Revenue has grown by over
150% on the pcp.
•The USA pilot has progressed with owner acquisition,
but demand generation across the peak was slow.
•Group Support Services last year included a profit on
the sale of GeoZone to Roadtrippers and transaction
costs in relation to the El Monte RV and Roadtrippers
transactions.
F Y 1 8 F O C U S
FY18: Interim Results Presentation
20
Key Focus for FY18 -Progress
21
FY18: Interim Results Presentation
Complete USA pilot and assess the next phase. Grow the NZ customer
base. Grow the owner integration model.
Mighway
Implement the new rental system and ERP system globally. Develop
telematics.
Technology
Deeper customer engagement through technology.
Customer
Further expand retail and ancillary options for low capital growth.
RV Ecosystem
Deliver to our materiality topics (refer inaugural sustainability report).
Complete and trial the electric vehicle (EV) prototype.
Sustainability
Progress the plan to integrate the business, renew the fleet and
proposition and lift ROFE.
El Monte RV
Leverage growth opportunities, continue flex fleet & operational focus.
Core Business
Ongoing review of three-year growth plans for all investments.
Joint Ventures
On track. H1 FY18 EBIT growth excluding El Monte RV was
25%.
Programmatic marketing tool implemented in NZ and AU
markets.
86% growth in non-fleet vehicle contribution. TH2 formed to
take digital offerings to the wider RV community.
Progressing –see separate slide. EV trial under way.
Growth forecast in joint ventures/associates.
Rental & RV industry platform (Cosmos) progressed and
moves into TH2. ERP system in place NZ and AU.
Progressing well.
Working well in NZ. To move into TH2, with opportunity to
accelerate US growth.
FOCUSUPDATE
Sustainability Initiatives
22
FY18: Interim Results Presentation
Emissions &
Climate Change
Crew & Staff
•Energy and water audits completed in NZ.
•Two electric vehicle prototypes under way.
•EECA funding granted for EV and holiday parks infrastructure.
•Share e-bikes for thlcrew.
•Kiwi Experience emissions dropped 5%.
•Audit verification that thlhas measured its greenhouse gas
emissions for the 2016/17 in accordance with the mandatory
requirements of ISO14064-1:2006.
Responsible Travel
•Kiwipledge.co.nz prototype developed & launched to create
more awareness for a responsible way of traveling in a fun,
engaging way.
•Freedom camping infringement trial is continuing.
•Freedom camping video trial on CamperMate.
•Kiwi Experience continued focus on safe driver education.
•Wellbeing initiatives programmeat Rentals NZ, including
water wellness month and additional 'how are we feeling'
pulse checks.
•Launch of new leadership training programme.
•No crew notifiable incidents.
•Initial Mauri model community assessment in Waitomo completed
in December 2017, awaiting test results Q1 2018.
•280kgs of waste removed from Westport beaches.
•Initiation of monthly volunteering team event to help pack lunches
for schools, as part of the Eat My Lunch programme, to help
underprivileged children.
•Contribution to multiple charities supported by thlcrew including
Movember, SPCA, KidsCan, Kiwi Encounter, Breast Cancer
Foundation.
Positive
Communities
Shareholder Satisfaction
•Share price increase last 52 weeks over 50%
1
•Interim dividend lifted 30%.
EV prototypes under way |EECA funding granted |Kiwipledgelaunched |Mauri assessment completed
1
Source: NZX 20 Feb 2018
23
FY18: Interim Results Presentation
O U T L O O K
Capital Expenditure FY18
24
FY18: Interim Results Presentation
•Gross CAPEX for FY18 forecast at approximately $190M, down $10M on prior forecast mainly due to USD FX rate ($3M) and lower US fleet costs.
•Most of growth in gross CAPEX on FY17 relates to El Monte RV, as we progress the reduction in the age of the fleet.
•Fleet vehicle sales forecast at $153M, down on prior forecast of $160M, partly due to USD FX rate ($3M). Most of the year-on-year increase is from El
Monte RV and Road Bear.
•Net CAPEX forecast at $37M. Reduction on FY17 due to Road Bear, El Monte RV and Rentals Australia.
73
92
126
171
190
FY14FY15FY16FY17FY18
forecast
Gross CAPEX $M
61
62
81
112
153
FY14FY15FY16FY17FY18
forecast
Fleet Sales Proceeds $M
12
30
45
59
37
FY14FY15FY16FY17FY18
forecast
Net CAPEX $M
Note: Fleet purchased under buyback arrangements are not treated as fixed assets additions/sales, but are treated as operating leases under IFRS reporting. For the purposes of the above, the purchases and sale values
under buy-back arrangements are included.
25
FY18 Full Year Guidance
FY18: Interim Results Presentation
•Previous guidance for FY18 was in the range of $36M-$39M. This has
been updated to $36M-$40M before non-recurring items.
•There are two non-recurring items that will impact FY18:
•The change in measurement of deferred tax arising from the
change in US tax rates of NZD$1.8M.
•The non-cash gain arising from the contribution of assets to the
TH2 JV. This gain will be subject to final fair value accounting and
the NZD:USD FX rate at the time of settlement. This gain is
estimated at NZD $17.3M. Further detail of this gain is provided in
the TH2 investor presentation released on 16 February 2018.
$36M-$40M
NPAT FY18 before
non-recurring items
$55M-$59M
NPAT FY18 including non-
recurring items
NPATForecastLowHigh
Previous guidance$36M$39M
LowerUS tax expense FY18$2M$2M
Trading update including TH2($2M)($1M)
NPAT forecast before non-recurring$36M$40M
Deferred tax re-measurement$2M$2M
TH2 gain on contribution to JV$17M$17M
NPAT forecast after non-recurring$55M$59M
S U P P O R T I N G A N A LY S I S
FY18: Interim Results Presentation
26
Income Statement Summary
27
FY18: Interim Results Presentation
$MFY18FY17VarVar %
Revenue from services136.0 96.8 39.2 40%
Revenue from sale of goods73.1 49.2 23.9 49%
Total revenue209.1 146.0 63.1 43%
Costs153.2 110.2 (43.0)(39%)
EBITDA 55.9 35.8 20.1 56%
Depreciation & amortisation22.6 17.1 (5.5)(32%)
EBIT33.3 18.7 14.6 78%
Interest(4.4)(2.4)(2.0)83%
Share of Joint Ventures1.4 1.2 0.2 17%
Share of Associates(0.4)0.2 (0.6)(300%)
Profit before taxation29.9 17.7 12.2 69%
Taxation(7.1)(6.4)(0.7)11%
Profit attributable to thl shareholders
22.8 11.3 11.5 102%
Basic EPS18.9 9.7 9.2 95%
6 M onths to De ce mbe r
Revenue
28
FY18: Interim Results Presentation
$MFY18FY17VarVar %
thl Rentals - Rental Revenue
New Zealand35.730.84.9 16%
Australia34.230.33.9 13%
USA - Road Bear18.617.80.8 5%
USA - El Monte RV29.029.0 n/a
117.678.938.7 49%
thl Rentals - Sale of Goods
New Zealand21.118.62.5 13%
Australia7.55.91.6 27%
USA - Road Bear29.824.75.1 21%
USA - El Monte RV14.714.7 n/a
73.149.223.9 49%
Tourism Group18.317.60.7 4%
Other0.20.3(0.1)(46%)
Total Revenue209.1146.063.143%
Split
Australia41.736.25.5 (15%)
USA92.242.549.7 117%
NZ and other75.267.37.9 12%
209.1146.063.1 43%
Revenue Split
Sale of Services136.096.839.2 40%
Sale of Goods73.149.223.9 49%
209.1146.063.1 43%
Revenue excl. El Monte RV165.3146.019.3 13%
6 Months to December
Divisional Review
29
FY18: Interim Results Presentation
DIVISIONALAVE FUNDSOPERATINGDIVISIONALAVE FUNDSOPERATING
$MREVENUEEBITEM PLOYED
CASHFLOW
1
REVENUEEBITEM PLOYEDCASHFLOW*
Rentals New Zealand56.8 6.6 137.8 (30.3) 49.4 3.7 125.0 (23.5)
Rentals Australia41.7 6.1 83.2 (5.6) 36.2 5.6 63.5 (1.9)
Road Bear48.5 9.3 37.1 25.4 42.5 9.6 37.8 25.1
El Monte RV43.7 9.5 82.0 18.7
Rentals USA total92.2 18.8 119.1 44.1 42.5 9.6 37.8 25.1
Tourism Group18.3 4.7 24.3 5.8 17.6 4.3 26.6 5.5
Group Support Services/Other0.2 (2.8) (3.4) (4.6) 0.3 (4.1) (1.5) (5.8)
Non-recurring Items- - - - - (0.4) - (0.3)
thl 100% owned entities209.1 33.3 361.0 9.4 146.0 18.7 251.4 (0.9)
Joint Ventures1.4 7.3 1.2 3.6
Associates(0.4) 11.4 0.2 5.3
Group Total209.1 34.3 379.7 9.4 146.0 20.1 260.3 (0.9)
Note 1: Operating cashf low includes the sale and purchase of rental assets.
6 M onths Ende d 31 De ce mbe r 20176 M onths Ende d 31 De ce mbe r 2016
EBITDA
30
FY18: Interim Results Presentation
$M
FY18
FY17
Var
Var %
EBIT
33.3
18.7
14.6
78%
Add back non-cash items:
Amortisation
0.7
0.8
(0.1)
Depreciation
21.9
16.3
5.6
EBITDA
55.9
35.8
20.1
56%
6 M onths to De ce mbe r
Balance Sheet
31
FY18: Interim Results Presentation
$MDe c 17De c 16Var
Equity212.2 174.7 37.5
Non current liabilities194.5 127.9 66.6
Current liabilities99.0 61.8 37.2
Total source of funds505.7 364.4 141.3
Intangible assets and goodwill42.2 20.2 22.0
Investments in associates and joint ventures10.5 16.2 (5.7)
Property, plant and equipment336.9 254.1 82.8
Current assets116.2 73.9 42.3
Total use of funds505.7 364.4 141.3
Net debt position178.4 103.0 75.4
Net tangible assets (NTA)170.1 154.5 15.6
NTA per share$1.41$1.33
Book value of net assets per share$1.75$1.51
Debt / debt + equity ratio (net of Intangibles)51%40%
Equity ratio (net of Intangibles)37%45%
AUD exchange rate at period end0.9336 0.9868
USD exchange rate at period end0.7296 0.7161
As at
Gain on Vehicle Sales and Gross Profit
32
FY18: Interim Results Presentation
Note 1:There has been a change in reporting of vehicle selling costs in the financial statements from those
presented in December 2016. R&M costs, previously reported as selling costs, are now included in
operating costs. This was required following the El Monte RV transaction and it is considered more
meaningful to group all R&M costs under operating expenses.
Note 2:Real depreciation is calculated the difference between the sale price and the original cost, divided by the
original cost, averaged over the number of years between purchase and sale. The rates above are the
average rate for all vehicles sold in the year.
$MFY18FY17VarVar %
Gain on sales of motorhome fleet before selling costs9.97.22.738%
Vehicle sales costs (warranty only)
1
0.60.20.4200%
Gain on sales of motorhome fleet after selling costs9.37.12.231%
Gross profit on non-fleet vehicles, retail and accessory sales2.01.10.982%
Reported gross profit11.38.13.240%
Total average gain on sale ($000) after selling costs9.19.7(0.6)(6%)
Fleet motorhomes sold (incl writeoffs)
AU154 150 4 3%
NZ174 206 (32)(16%)
US688 373 315 84%
Total fleet motorhomes sold (units)1,016 729 287 39%
Flex fleet sales on buy-backs excluded from above
AU209 105
Real Depreciation Rates per annum
2
AU8-9%
NZ6-7%
US (under 18 months)<0%
US (other)~4%
6 Months to December
FY18: Interim Results Presentation
33
E N D
---
APPENDIX 7 – NZSX Listing Rules
Number of pages including this one
(Please provide any other relevant
NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10. details on additional pages)
For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required.
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of Issuer
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Authority for event,
make this notice
e.g. Directors' resolution
Contact phone
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numbernumberDate
Nature of event
BonusIf ticked,Rights Issue
Tick as appropriateIssuestate whether:Taxable/ Non TaxableConversionInterestRenouncable
Rights IssueCapitalCallDividend
If ticked, stateFull
non-renouncable
change
y
whether:
Interim
y
YearSpecialDRP Applies
y
EXISTING securities affected by this
If more than one security is affected by the event, use a separate form.
Description of theISIN
class of securities
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Description of theISIN
class of securities
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be issued following eventEntitlement
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Payable or Exercise Date
Tick if
provide an
pari passu
ORexplanation
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of the
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ranking
Monies Associated with Event
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Source of
Amount per securityPayment
(does not include any excluded income)
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(only applicable to listed PIEs)
SupplementaryAmount per security
Currencydividendin dollars and cents
details -
NZSX Listing Rule 7.12.7
Total monies
TaxationAmount per Security in Dollars and cents to six decimal places
In the case of a taxable bonusResident
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issue state strike priceWithholding Tax(Give details)
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FDP Credits
Withholding Tax(Give details)
Timing
(Refer Appendix 8 in the NZSX Listing Rules)
Record Date 5pmApplication Date
For calculation of entitlements -Also, Call Payable, Dividend /
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of applications this must be the
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Notice DateAllotment Date
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conversion notices mailedMust be within 5 business days
of application closing date.
OFFICE USE ONLY
Ex Date:
Commence Quoting Rights:Security Code:
Cease Quoting Rights 5pm:
Commence Quoting New Securities:Security Code:
Cease Quoting Old Security 5pm:
4 April, 201816 April, 2018
NZD$0.011471
$15,730,156.26
Date Payable
16 April, 2018
$$0.025964$0.025278
$
In dollars and cents
Retained earnings
13 cents
Enter N/A if not
applicable
121,001,202 Ordinary sharesNZ HELE 0001S9
(09) 336 4212(09) 309 09132122018
EMAIL: announce@nzx.com
Notice of event affecting securities
1
Tourism Holdings Limited
Mark Davis, CFODirector's resolution
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