Daily ShareChat: Tourism Holdings

By Jenny Ruth

Monday 7th September 2009

Tourism Holding's result was ugly, again impacted by restructuring, discontinued activities, divestments, continuing losses at campervan builder CI Munro, reclassifications and accounting treatment changes, says First NZ Capital analyst Jason Familton.

But once all that was stripped out, "underlying earnings were slightly stronger than anticipated." That was a net loss of $1.4 million compared with Familton's $3.1 million estimate.

The current financial year looks like it will be difficult for the company with softening visitor arrivals and an over-supplied New Zealand domestic market negatively impacting earnings, he says.

"While some internal positives are expected from a turn-around at CI Munro (as the cost-base is reduced) and also Explore More moving out of the start-up phase, we do not anticipate any significant earnings growth until (financial) 2011."

Familton is forecasting a $0.5 million net profit for the current year and $7.5 million in the year ending June 2011.

"Given the current uncertainty around earnings, and in particular earnings momentum over the next 12 months, we struggle to find a near-term positive catalyst for the share price to recover from its current subdued level," he says.

But in 12 months time visitor numbers should have started to rebound and the market will be looking forward to 2011 and the boost from the Rugby World Cup. Familton values the shares at $1.01.

BROKER CALL: First NZ Capital rate Tourism Holdings (NZX: THL ) as outperform.

Comments from our readers

No comments yet