Can thl’s Rental Growth Drive a $100M NPAT Comeback?

Challenging Year, Clearer Path Forward

Tourism Holdings Limited (thl), a global leader in recreational vehicles and tourism services, has released its FY25 Integrated Annual Report revealing a statutory net loss after tax of $25.8 million. This loss primarily reflects significant one-off impairments related to goodwill and deferred tax assets in the United States and United Kingdom markets. Despite this, thl delivered an underlying net profit after tax of $28.7 million, albeit down 45% from the prior year, underscoring the tough macroeconomic and market conditions faced globally.

The retail RV market remained at a low ebb throughout FY25, with soft demand impacting vehicle sales profitability across all regions. However, rental services, the core of thl’s business, showed resilience, with sales of services revenue growing 10% and the rental fleet expanding by 8%, reflecting over 30% growth in fleet size over the past three years. This rental momentum was particularly strong in New Zealand and Australia, where EBIT growth was recorded.

Strategic Growth Roadmap and Market Outlook

In response to these challenges, thl has laid out a comprehensive growth roadmap focused on rental-centric expansion, cost optimisation, and capital management. The Board has set an ambitious target to exceed $100 million in annualised net profit after tax within the next three to four years, supported by strategic initiatives including the North American synergy project and measured fleet growth.

While the company acknowledges skepticism around this target, it points to stabilising market conditions and a positive outlook for international leisure tourism in key regions such as New Zealand, Australia, and Canada. Emerging travel trends favoring personalised and nature-connected experiences align well with the RV lifestyle, which thl is well-positioned to serve.

Operational Highlights and Innovation

FY25 saw thl advance its digital transformation with the global rollout of unified fleet management and data platforms, enhancing operational efficiency and crew engagement. The opening of the Waitomokia site in Auckland marked a milestone in operational consolidation and sustainability, featuring repurposed buildings, rainwater harvesting, and cultural integration with local iwi.

Health, safety, and wellbeing remain priorities, with the Protect crew safety programme and Project Uplift delivering significant improvements in safety culture and risk management. Sustainability efforts continue to mature, with thl preparing its first climate transition plan and progressing its Future Fleet programme to address emissions challenges.

Governance and Market Developments

The Board rejected a conditional, non-binding acquisition offer of $2.30 per share from a consortium including BGH Capital and family interests of Director Luke Trouchet, deeming it undervalued relative to the company’s intrinsic worth. The Board remains focused on executing the growth roadmap and delivering shareholder value.

Robust governance practices underpin thl’s operations, with comprehensive risk management frameworks addressing financial, operational, and climate-related risks. The company maintains a strong capital structure and prudent liquidity management to navigate ongoing market uncertainties.