THL stock reflects tourism recovery as revenue and profit rebound

Tourism Holdings Limited (THL, ISIN NZHELE0001S9) stock is trading against a backdrop of recovering global tourism volumes, after the motorhome and RV rental specialist reported a strong rebound in earnings for the fiscal year ended 30 June 2023 following its merger with Apollo Tourism & Leisure, according to company filings as of 28 August 2023.

Revenue up more than fifty percent

According to THL's annual report for fiscal 2023, the group generated operating revenue of NZD 477.6 million for the 12 months to 30 June 2023, compared with NZD 306.5 million in the prior fiscal year.

The same filing shows that THL's net profit after tax swung to NZD 49.8 million in fiscal 2023, up from NZD 27.4 million a year earlier as cross-border travel resumed and fleet utilization improved.

EBIT growth and margins improve

THL reported earnings before interest and tax (EBIT) of NZD 86.5 million for fiscal 2023, more than double the NZD 37.3 million recorded in fiscal 2022, according to the same annual report.

The EBIT margin expanded as well, rising to around 18 percent in fiscal 2023 compared with roughly 12 percent in fiscal 2022, reflecting higher fleet yields and cost synergies from the Apollo integration.

Motorhome rentals support earnings base

THL generates most of its revenue from renting motorhomes and campervans to tourists in New Zealand, Australia and North America, with the combined THL and Apollo fleets giving the group a leading position in several of its core markets.

Management highlighted in its fiscal 2023 reporting that booking momentum and fleet utilization benefited from the reopening of borders and a recovery in long-haul travel into Australasia and the United States.

THL stock and market context

THL stock is listed on the NZX in New Zealand under the ticker symbol NZX: THL, giving domestic investors direct exposure to the post-pandemic recovery in global self-drive tourism.