Can thl Turn Around After a 45% Profit Drop in FY25?

A Challenging Year for thl

Tourism Holdings Limited (thl), the world’s largest commercial recreational vehicle (RV) rental operator, has revealed a tough financial year ending 2025. The company’s underlying net profit after tax dropped by 45% to $28.7 million, while statutory results showed a net loss of $25.8 million, largely driven by one-off costs. This downturn reflects subdued global consumer demand for RV purchases, compounded by uncertain macroeconomic factors such as fluctuating tariffs and interest rate expectations.

Despite these headwinds, thl’s New Zealand Rentals & Sales and Tourism divisions delivered record earnings before interest and tax (EBIT), highlighting pockets of resilience within the group. Australia’s rental business also performed strongly, although this was offset by losses in its retail dealerships. North America faced challenges from declining international travel sentiment, particularly impacting the US market.

Strategic Reset and Growth Roadmap

In response to the difficult environment, thl’s Board and Management have embarked on a strategic reset. Announced in August 2025, the company set an ambitious target to achieve $100 million in annualised net profit after tax within three to four years. This roadmap focuses on operational improvements and growth initiatives across key regions including the UK & Ireland, Australian Retail, Australasian Manufacturing, and North America.

Key actions include rationalising product lines and brands, streamlining organizational structures, and reducing inventory and capital employed, particularly in the Australian Retail division. The company has already begun exiting two standalone dealerships in Australia as part of this effort. Additionally, the North American synergy project, delayed by tariff uncertainties, is now poised to accelerate, promising improved profitability through more efficient fleet management.

Tourism Recovery and Market Outlook

thl’s outlook is buoyed by a positive recovery in international tourism, especially in New Zealand, Australia, and Canada. Governments in these markets are actively investing in tourism growth strategies, which thl expects will support sustained demand for RV rentals. Forward bookings in these regions are currently around 20% ahead of last year, signaling strong momentum heading into the peak season.

However, the company remains cautious about ongoing challenges, including persistent inflationary pressures, the risk of an extended economic downturn, and potential changes in tariff regimes. The US market is expected to remain weak in the near term, and no profit guidance for FY26 has been provided as thl navigates this transitional period.

Corporate Developments and Shareholder Engagement

In June 2025, thl received a non-binding indicative acquisition offer from a consortium led by BGH Capital and the Trouchet family interests. After thorough evaluation, the Board rejected the $2.30 per share offer in August, deeming it significantly undervalued relative to thl’s intrinsic worth and growth prospects. The company remains open to engagement should a substantially improved offer arise but has not received further communication since.

Meanwhile, thl continues to invest in digital transformation and crew wellbeing initiatives, completing a global rollout of its fleet management system and advancing health and safety programs that have already reduced lost-time injuries by 43%. These efforts underpin thl’s commitment to operational excellence amid a complex global environment.