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Tourism Holdings tracking to beat guidance

NZN 28/04/2016 Sophie Boot

Tourism Holdings is likely exceed its 2016 guidance as margins improve in New Zealand and Australia, and the campervan rental company is predicting growth over the coming years.

It said it would meet and was likely to some extent exceed its earlier guidance for the year to the end of June of $24 million, which would be up from last year's $20.1m profit.

It also brought forward by a year its projection for reaching annual profit of $30m to 2018.

It said the peak holiday season in Australasia has performed to expectations and while rentals were flat on 2015, growth was driven by improved utilisation and yield lift in both countries, it said.

The company anticipates rental growth and increased yield in 2017, particularly in New Zealand.

It expects the British and Irish Lions rugby tour in late June and July that year to have a positive impact on results in the period, though will incur some increased costs to prepare its fleet.

The company's peer-to-peer motorhome rentals division, Mighway, has met initial expectations, and the company is increasing its investment to scale it in New Zealand and explore international expansion.

It's also increasing its 'flex-fleet', which is short-term inventory it sells after the peak season, to offset the reduction of its core fleet.

"The business model for THL is changing to being more flexible and customer focused," the company said. "There is a very significant amount of internal change which is being managed carefully as we grow."

The shares last traded at $2.63, and have gained 20 per cent this year.

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