THL Reports 45% Drop in Underlying Profit, Rental Revenue Up 10%

A Challenging Year for Tourism Holdings

Tourism Holdings Limited (thl), the world’s largest commercial recreational vehicle rental operator, has reported a statutory net loss after tax of $25.8 million for the fiscal year ending June 30, 2025. This contrasts sharply with the $39.4 million profit recorded in FY24 and is largely attributed to one-off non-cash impairments totaling $54.5 million, primarily related to goodwill and deferred tax assets in the USA and UK.

Despite this headline loss, the company’s underlying net profit after tax stood at $28.7 million, down 45% from the previous year. This decline reflects the persistent bottom-of-the-cycle conditions in the retail RV market globally, compounded by a tough macroeconomic environment and subdued consumer confidence.

Revenue Growth Amid Market Headwinds

On a positive note, thl’s core rental services revenue grew by 10% to $486.5 million, supported by an 8% increase in fleet size to 8,564 vehicles. This growth underscores the resilience of the rentals business, which remains the engine of thl’s operations, driven largely by international tourism recovery in key markets such as New Zealand, Australia, and Canada.

However, the company remains cautious about the US market outlook, where ongoing tariff uncertainties and a strong US dollar have dampened travel demand. European wholesalers continue to view the USA as an attractive destination, but conversion rates have softened compared to previous years.

Strategic Initiatives and Cost Discipline

In response to these challenges, thl has implemented rigorous capital discipline, reducing Australian retail RV inventory by over $35 million and cutting group net fleet capital expenditure by $22 million compared to FY24. These measures have contributed to positive operating cash flows and a closing net debt position of $492 million, with expectations for further debt reduction in the coming years.

The company is also advancing strategic initiatives targeting underperforming divisions in North America, the UK & Ireland, Australian Retail Sales, and Australian Manufacturing. Cost reduction programs, including rationalisation of manufacturing locations and digital transformation projects, are underway to improve efficiency and align fleet management with market realities.

Dividend and Outlook

Reflecting confidence in its balance sheet and outlook, thl declared a final dividend of 4 cents per share, bringing the full-year payout to 6.5 cents per share, approximately 50% of underlying NPAT, up from 40% in prior years. The company has suspended its Dividend Reinvestment Plan for this payment.

Looking ahead to FY26, thl plans a significant step-up in cost reduction efforts, focusing on cash savings in fleet procurement, efficiencies from digital system consolidation, and overhead reductions. The rentals division anticipates continued strong revenue growth and improved utilisation, while the sales division remains cautiously optimistic about modest volume growth.

A Roadmap to Recovery

Chair Cathy Quinn and CEO Grant Webster emphasise that thl has passed an inflection point, with strategic plans in place to return to growth and profitability. The company has set an ambitious goal to exceed $100 million in annualised net profit after tax within three to four years, supported by a recovering tourism sector and disciplined capital management.

While uncertainties remain, particularly in the US market, thl’s focus on cost control, fleet optimisation, and digital transformation positions it well to navigate the current cycle and capitalise on the expected rebound in global travel.