Tourism Holdings Rebuilds Earnings as Rival Takeover Bids Emerge

Highlights

• Rental growth lifted underlying profit, although weaker vehicle sales continue to test recovery.
• Rival takeover approaches sharpen valuation focus, with both proposals undergoing due diligence.
• Lower debt supports a larger dividend, but booking trends remain crucial.

Tourism Holdings Limited (ASX: THL) reported a return to profitability in its FY2026 results, announced on 25 August 2026. Rental growth, cost reductions and business restructuring strengthened performance, while competing takeover approaches brought its valuation into focus. Nevertheless, weaker vehicle sales and conflict-related travel disruption have complicated the earnings outlook for FY2027.

Rental Expansion Supports Earnings Recovery

The company recorded statutory net profit after tax from continuing operations of NZ$39.9 million, reversing a NZ$14.1 million loss in FY2025. Underlying net profit advanced 34% to NZ$46.1 million, while underlying earnings before interest and tax increased 17% to NZ$105.4 million.

Services revenue, largely comprising rentals, grew 11% to NZ$517.5 million. Its rental fleet finished the year at 8,587 vehicles, representing 10% growth.

Vehicle-related trading remained a constraint. Goods revenue dropped 22% to NZ$335.4 million, pulling total continuing-operations revenue down 5% to NZ$852.9 million. The figures show that stronger rental activity has only partly cushioned the sales downturn.

Business Changes Improve Financial Flexibility

Tourism Holdings reshaped its operations through the approximately NZ$57 million sale of its UK and Ireland business. It also shut two loss-making Australian dealerships and moved Brisbane manufacturing activities into New Zealand.

Changes across staffing, corporate functions and digital operations generated approximately NZ$5 million in savings.

Operating cash flow from continuing operations rose 67% to NZ$67 million. Group net debt, excluding lease liabilities, decreased to NZ$435.5 million, compared to NZ$492.3 million. The annual dividend climbed 62% to 10.5 NZ cents per share, incorporating a final payment of 7.5 NZ cents.

Competing Bidders Add Strategic Interest

The board outlined a revised, non-binding indicative offer of NZ$3.10 per share from the BGH consortium. Another party, described by directors as a credible strategic acquirer, proposed NZ$3.30–NZ$3.40 per share.

Both bidders were conducting due diligence, leaving any eventual transaction dependent on further assessment and agreement.

Outlook Depends on Demand Stabilisation

Management warned that Middle East conflict disruption had left a forward-booking gap unlikely to be recovered fully, reducing the earnings uplift previously anticipated for FY2027.

Tourism Holdings retained its NZ$100 million underlying profit ambition, while acknowledging a changed timetable. Progress will depend on rental bookings, manufacturing efficiencies, cost discipline and an eventual improvement in vehicle markets.

Note- All data presented is based on information available at the time of writing.

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