Tourism Holdings is reviewing revised non-binding proposals from both the BGH consortium and Indie Campers, while reporting a 34% rise in FY26 underlying profit. The stronger result comes with unresolved questions around the US business, weak RV sales and the timing of its $100 million profit ambition.
- Revised non-binding proposals received from BGH consortium and Indie Campers
- FY26 continuing-operations underlying NPAT rose 34% to $46.1 million
- Record rental revenue of $517.5 million and net debt reduced to $436 million
- Southern Hemisphere forward rental revenue up about 10% in early FY27
- US returns and the 2027 Waitomo lease expiry remain key risks
Two takeover proposals reach the next stage
Tourism Holdings Limited (NZX:THL, ASX:THL) has received revised non-binding proposals from both the BGH consortium and Indie Campers, putting its contested takeover process into a more advanced but still unresolved phase.
The company said due diligence with both bidders has largely concluded and that the board is now reviewing their terms and engaging with each party. Pricing remains confidential. Neither proposal is binding, both remain subject to conditions, and thl said there is no certainty that either will result in a transaction.
The update follows the BGH due diligence process, which began after the consortium submitted a revised all-cash offer of NZ$3.10 per share in June. That earlier offer carried no board recommendation, and the latest announcement provides no indication that either bidder has reached a recommended or binding stage.
Profit and debt metrics improve sharply
While the takeover discussions continue, the underlying business produced a much stronger FY26. Underlying net profit after tax from continuing operations rose 34% to $46.1 million, while statutory profit reached $39.9 million against a loss in the prior year.
Rental revenue hit a record $517.5 million, operating cash flow increased 67%, and net debt fell from $492 million to $436 million. The full-year dividend rose 62% to 10.5 cents per share. Return on funds employed improved to 8.7%, but remains well below thl’s 15% target.
The result reflects a series of restructuring moves, including the UK and Ireland sale, the closure of the Brisbane factory, consolidation of manufacturing in Hamilton, the exit from two loss-making Australian dealerships and cost, labour and procurement changes in North America.
Rentals hold up as RV sales weaken
Management’s central argument is that rentals, rather than new-vehicle sales, remain the engine of the business. The rental fleet grew by more than 11%, and thl said it generated more revenue from each rental vehicle despite disruption late in the financial year.
Vehicle sales tell a less encouraging story. Revenue from the sale of goods, primarily RVs, fell 22% as high interest rates, fuel costs, weaker confidence and affordability pressures weighed on discretionary purchases. Thl said it is responding by building and buying fewer vehicles, slowing fleet rotation and keeping vehicles in rental service for longer where appropriate.
The company’s integrated build-rent-sell model gives it some flexibility, but it does not remove the risk of a prolonged sales downturn. Thl said ex-rental vehicles in Australia and New Zealand continued to sell at margins of around 30%, although that performance relates to those markets and does not establish that the wider RV sales business has recovered.
US returns remain the strategic fault line
North America is the board’s largest strategic priority, with the US identified as the clearest opportunity for improvement. Thl reduced average funds employed in the US by about $60 million, cut costs, integrated its US and Canadian teams and shifted fleet towards stronger demand channels. Canada delivered a record rental summer, but the US business remains “a long way from where it needs to be”, according to management.
The board is actively exploring alternative strategic options for the US operation. That language matters because it places capital discipline and portfolio choices alongside operational improvement as possible routes to better returns, without specifying what form any strategic change might take.
FY27 begins with uneven demand
Underlying net profit after tax was broadly flat in the first quarter of FY27. Southern Hemisphere forward rental revenue was about 10% ahead of the same point last year, although Northern Hemisphere bookings remain too early to provide a meaningful demand signal.
Thl said booking patterns remain volatile across markets and travel periods, with the Middle East conflict and softer Australian consumer demand affecting travel decisions. The company still believes some demand was deferred rather than permanently lost, but it acknowledged that the disruption has reduced what FY27 might otherwise have delivered.
The board continues to regard its $100 million underlying NPAT goal by FY29 as achievable, while acknowledging that the timing depends on stronger international tourism, better rental utilisation and yields, manufacturing and procurement benefits, further cost savings and some recovery in RV sales. Separately, the Waitomo Glowworm Cave lease expires on 30 June 2027, with the company continuing discussions about its future role and maintaining its expectation of an approximately 50% reduction in that division’s EBIT from FY28.
Bottom Line?
The takeover process now has two revised proposals to test against a materially improved operating result, but the next decisive information will be price, binding terms and whether either bidder can address thl’s US return problem.
Questions in the middle?
- Will either revised proposal become a binding offer, and at what valuation?
- Can thl lift US returns towards its 15% ROFE target without further major portfolio changes?
- How much of the deferred rental demand converts as FY27 progresses, particularly in the Northern Hemisphere?