Q4 2026 Tourism Holdings Ltd Earnings Call

August 25, 2026

Speaker #1: Thank you for standing by, and welcome to the Tourism Holdings Ltd 2026 annual results. All participants are in listen-only mode. There will be a presentation followed by a question-and-answer session.

Operator: Thank you for standing by and welcome to the Tourism Holdings Ltd. 2026 annual results. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Mr. Grant Webster, Chief Executive. Please go ahead, sir.

Operator: Thank you for standing by and welcome to the Tourism Holdings Ltd. 2026 Annual Results. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Grant Webster, Chief Executive. Please go ahead, sir.

Speaker #1: If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Mr. Grant Webster, Chief Executive.

Speaker #1: Please go ahead, sir.

Speaker #2: Thank you, Chuck. Welcome, everybody. It's a pleasure to have you join us. With me here in the office are Ollie Farnsworth and Amira Ansari.

Grant Webster: Thank you, Chuck. Welcome everybody. It is a pleasure to have you join us. With me here in the office is Ollie Farnsworth and Amir Ansari. We are looking forward to sharing with you the FY26 annual results. As always, we will move through the material at a reasonable pace given that you have had a chance to absorb it. We appreciate that there could well be a number of questions people will have, so we aim to get to those. Stevens, we are going to talk about the disclaimer. Let us get to the executive summary. We are very content with the underlying net profit after tax from continuing operations of NZD 46.1 million. Not where we had wanted to be for the year, but given what happened with the Middle East situation, we are very pleased with the result.

Grant Webster: Thank you, Chuck. Welcome everybody. It is a pleasure to have you join us. With me here in the office is Ollie Farnsworth and Amir Ansari. We are looking forward to sharing with you the FY 2026 annual results. As always, we will move through the material at a reasonable pace given that you have had a chance to absorb it. We appreciate that there could well be a number of questions people will have, so we aim to get to those. Stevens, we are going to talk about the disclaimer. Let us get to the executive summary. We are very content with the underlying net profit after tax from continuing operations of NZD 46.1 million. Not where we had wanted to be for the year, but given what happened with the Middle East situation, we are very pleased with the result.

Speaker #2: We're looking forward to sharing with you the 2026 annual results. As always, we'll move through the material at a reasonable pace, given that you've had a chance to absorb it.

Speaker #2: We appreciate that there could well be a number of questions people will have. We'll get to those. Right, let's get into it. No need to talk about the disclaimers.

Speaker #2: Let's get to the executive summary. We are very content with the underlying net profit after tax from continuing operations of $46.1 million, which is where we had wanted to be for the year. But given what happened with the Middle East situation, we aren't very pleased with the result.

Speaker #2: We're equally pleased with the progress made during the year on the strategic initiatives that we announced in August 2025. Particularly, we're pleased with the growth in rentals revenue, which, as we always say, is the engine of this business.

Grant Webster: We are equally pleased with the progress made during the year on the strategic initiatives that we announced in August 2025. Particularly, we have raised for the year with the growth in rentals revenue, which, as we always say, is the engine of this business. Fleet was up for the year to nearly 8,600 vehicles. That is a little on the high side, but it is expected to right itself throughout FY27. We are also very pleased to have the balance sheet in a position where we can announce the full year dividend of NZD 0.105 per share, made up of the final dividend of NZD 0.075 and the earlier NZD 0.03. That NZD 0.075 will be 100% fully imputed in New Zealand, 10% franked in Australia. We are part of the tourism industry that had strong momentum in the H1 of FY26.

Grant Webster: We are equally pleased with the progress made during the year on the strategic initiatives that we announced in August 2025. Particularly, we have raised for the year with the growth in rentals revenue, which, as we always say, is the engine of this business. Fleet was up for the year to nearly 8,600 vehicles. That is a little on the high side, but it is expected to right itself throughout FY 2027. We are also very pleased to have the balance sheet in a position where we can announce the full-year dividend of NZD 0.105 per share, made up of the final dividend of NZD 0.075 and the earlier NZD 0.03. That NZD 0.075 will be 100% fully imputed in New Zealand, 10% franked in Australia. We are part of the tourism industry that had strong momentum in the H1 of FY 2026.

Speaker #2: Fleet was up for the year to nearly 8,600 vehicles. That's a little on the high side, but it's expected to right itself throughout FY27.

Speaker #2: We're also very pleased to have the balance sheet in a position where we can announce the full-year dividend of 10.5 cents per share, made up of the final dividend of 7.5 cents and the earlier 3 cents.

Speaker #2: That 7.5 cents will be 100% fully imputed in New Zealand, with a 10% fraction in Australia. We are part of the Tourism Ministry that had strong momentum in the first half of FY26.

Speaker #2: Our initiatives and progress were definitely disrupted by the conflict, which created a gap in our forward booking intake. We'll talk more about that in our outlook slides.

Grant Webster: Our initiatives and progress were definitely disrupted by the conflict, which created a gap in our forward booking intake. We will talk more about that in our outlook slides. That gap is unlikely to be fully recoverable as the vast majority of it impacts Q1 FY27. It does impact the significant earnings that we had expected for FY27. However, as you have seen, we still stand by our NZD 100 million underlying goal that we have for this business. The core drivers for that goal remain intact, and the indicators that were there before around rental growth, manufacturing, and procurement benefits, alongside our other cost reductions, are all in play, along with an expectation of improvement. You will see, and it should be no surprise to me, that the results today are on a continuing operations basis only.

Grant Webster: Our initiatives and progress were definitely disrupted by the conflict, which created a gap in our forward booking intake. We will talk more about that in our outlook slides. That gap is unlikely to be fully recoverable as the vast majority of it impacts Q1 FY 2027. It does impact the significant earnings that we had expected for FY 2027. However, as you have seen, we still stand by our NZD 100 million underlying goal that we have for this business. The core drivers for that goal remain intact, and the indicators that were there before around rental growth, manufacturing, and procurement benefits, alongside our other cost reductions, are all in play, along with an expectation of improvement. You will see, and it should be no surprise to me, that the results today are on a continuing operations basis only.

Speaker #2: That gap is unlikely to be fully recoverable, as the vast majority of it impacts Q1 in 2027. It does impact the significance of earnings that we had expected for FY27.

Speaker #2: However, as you've seen, we're still standing by our $100 million underlying goal that we had for this business. The core driver for that goal remains intact, and the indicators that were there before—around rental growth, manufacturing and procurement benefits, alongside our other cost reductions—are all in play, along with an expectation of improvement.

Speaker #2: You'll see—and it should be no surprise to many—that the results today are on a continuing operations basis only. So, following the divestment of the UK and Ireland business in accordance with IFRS 5, we've restated the counts in this presentation for FY25 and FY26 on a continuing basis, hopefully.

Grant Webster: Following the divestment of the UK and Ireland business and in accordance with IFRS 5, we have restated accounts in this presentation for FY25 and FY26 on a continuing basis only. The balance sheet metrics, however, are reported on a total group basis and have not been restated unless we otherwise indicated in the reconciliation slide that we have at the back of the pack. The results summary I think are covered, so we will just skip that slide and move to the next slide with an update on takeover approaches. Everyone, I have no doubt will be keen for an update here, and I have no doubt that there are a number of questions you may have, which we may well not be able to answer. I am sure you understand that. The core update is the same as what we have been saying before.

Grant Webster: Following the divestment of the UK and Ireland business and in accordance with IFRS 5, we have restated accounts in this presentation for FY 2025 and FY 2026 on a continuing basis only. The balance sheet metrics, however, are reported on a total group basis and have not been restated unless we otherwise indicated in the reconciliation slide that we have at the back of the pack. The results summary I think are covered, so we will just skip that slide and move to the next slide with an update on takeover approaches. Everyone, I have no doubt will be keen for an update here, and I have no doubt that there are a number of questions you may have, which we may well not be able to answer. I am sure you understand that. The core update is the same as what we have been saying before.

Speaker #2: The balance sheet metrics, however, are reported on a total group basis and have not been restated unless we otherwise indicate in the reconciliation slide at the back of the page.

Speaker #2: The results summary, I think, we've covered, so we'll just skip that slide and move to the next slide with an update on takeover approaches.

Speaker #2: Everyone, I have no doubt you will be keen for an update here, and I’ve got no doubt that there are a number of questions you may have which we may well not be able to answer, and I’m sure you will understand that.

Speaker #2: But the core update is the same as what we've been saying before. We do have two bidders: the BGH consortium at $3.10 per share, and another party, which the board considers to be a critical strategic offer bidder, at $3.30 to $3.40 per share.

Grant Webster: We do have two bidders, the BGH Consortium at NZD 3.10 per share and another party which the board considers to be a core strategic partner offer bidder at NZD 3.30 to NZD 3.40 per share. With two bidders, you can imagine that we are very busy, still focused on driving the business forward, dealing with year-end with two due diligence processes. It is certainly been a busy time. We are very pleased that the current proposals are a substantial increase on the offer last year of NZD 2.30 per share. We right now are deep in due diligence. We have commenced many management sessions across the groups, and site visits have started as well, with further site visits planned over the coming period. It is a clear and obvious reminder that both proposals obviously remain non-binding.

Speaker #2: With two bidders, you can imagine that we are very busy, still focused on driving the business forward and dealing with year-end. There are two due diligence processes.

Speaker #2: It's certainly been a busy time. We are very pleased that the current proposals represent a substantial increase on last year's offer of $2.30 this year.

Speaker #2: Per share. We, right now, aren't deep in due diligence. We've conducted many management sessions across the groups, and site visits have started as well, with further site visits planned over the coming period.

Speaker #2: It's a clear and obvious reminder, but both proposals obviously remain non-binding. They are subject to a range of conditions, including completion of due diligence, financing approvals, and other internal approvals that the bidders may have.

Grant Webster: They are subject to a range of conditions, including completion of due diligence, financing approvals, and other internal approvals that the bidders may have. We expect the process to continue for approximately a further four to six weeks being around that period. The question has been raised, is due diligence taking a long period of time? We do not believe that it is. We have got two bidders in play, and we have got a lot going on in the business, so we are very happy that it is intense and progressing at a positive and good pace. Internally, I think the team at THL are doing a fantastic job. Those that are working on due diligence are working extremely hard. To Ollie and Amir in particular, thank you very much for the work that you have been doing.

Speaker #2: We expect the process to continue for approximately a further six weeks—somewhere around that. The question has been raised as to why due diligence is taking a long period of time.

Speaker #2: We don't believe that it is. We've got two bidders in play, and we've got a lot going on in the business. So we're happy that it's intense and progressing at a positive and good pace.

Speaker #2: Internally, I think the team at THL are doing a fantastic job. Those that are working on due diligence are working extremely hard, and to Ollie and Amira in particular, thank you very much for the work that you've been doing, the finance team's been doing fantastic job, and a lot of other people across the business.

Grant Webster: The finance team has been doing a fantastic job and a lot of other people across the business. More importantly, the business itself continues to progress and focus on the outcomes that we are looking for in FY27. Moving on to return on funds employed. Whilst we are still not where we need to be, we are starting to head back in the right direction. Up to 8.7% on a continuing business basis. The funds, as said, are slightly higher than they should be relative to the market situation we have had. Let us move on to the strategic initiatives. As you know, in August last year, we announced our growth roadmap and a number of strategic initiatives. I think we have made really good progress in the last 12 months. We sold the UK and Ireland business for around NZD 57 million, including around NZD 8 million of goodwill.

Grant Webster: The finance team has been doing a fantastic job and a lot of other people across the business. More importantly, the business itself continues to progress and focus on the outcomes that we are looking for in FY 2027. Moving on to return on funds employed. Whilst we are still not where we need to be, we are starting to head back in the right direction. Up to 8.7% on a continuing business basis. The funds, as said, are slightly higher than they should be relative to the market situation we have had. Let us move on to the strategic initiatives. As you know, in August last year, we announced our growth roadmap and a number of strategic initiatives. I think we have made really good progress in the last 12 months.

Speaker #2: More importantly, the business itself continues to progress and focus on the outcomes that we're looking for in FY27. Moving on to return on funds employed.

Speaker #2: Whilst we are still not where we started, we are heading back in the right direction—up to 8.7% on a continuing business basis. The funds, as I have said, are slightly higher in some areas than they should be, relative to the market situation that we've had.

Speaker #2: Let's move on to the strategic initiatives. As you know, in August last year, we announced our growth roadmap and a number of strategic initiatives.

Speaker #2: So I think we've made really good progress in the last 12 months. We sold the UK and Ireland business for around $57 million, including around $8 million of goodwill.

Grant Webster: We sold the UK and Ireland business for around NZD 57 million, including around NZD 8 million of goodwill.

Speaker #2: We exited two loss-making dealerships in Australia. We consolidated manufacturing back from Australia to New Zealand, and we achieved a number of cost initiatives in the North American business.

Grant Webster: We exited two loss-making dealerships in Australia. We consolidated manufacturing back from Australia to New Zealand, and we achieved a number of cost initiatives in the North American business. On top of that, we delivered around NZD 5 million in underlying cost savings across labor, corporate, and digital costs. The full benefit of some of these initiatives will flow through into next year and subsequent years, particularly those that realize benefits in procurement on a fleet basis. The realization of those procurement benefits obviously flows through in lower depreciation and through the real depreciation rate. Just a point on the factory at Bradford, we do have a sublease that we are in negotiations with at the moment, or a sublessor lessee, and we expect that to be executed in the next couple of months. The annualized costs for these are around NZD 2.5 million.

Speaker #2: On top of that, we delivered around $5 million in underlying cost savings across labor, corporate, and digital. The flow of these initiatives will carry through into next year and subsequent years, particularly those that realize benefits in procurement on a fleet basis.

Speaker #2: The realization of those procurement benefits obviously flows through in lower depreciation and through the real depreciation rate. Just to point on the factory equipment, we do have a sub-list that we're in negotiations with at the moment, or a sub-list for.

Speaker #2: Let's see. And we expect that to be executed in the next couple of months. The annualized cost of these is around $2.5 million NZD.

Speaker #2: From a Waitomo perspective, we are still working with the stakeholders and the local hapū in regards to what the future may be beyond the expiry of the lease at the Waitomo Glowworm Caves.

Grant Webster: From a Waitomo perspective, we are still working with the stakeholders and the local hapū in regards to what the future may be beyond the expiry of the lease of the Waitomo Glowworm Caves. To date, those discussions remain positive and are going well. Moving on to RV rental and sales. The rentals business is in a good state. Yes, our average rental fleet went up around 800 vehicles. RevPAR was an interesting one this year, depending on if you look at it at a constant currency basis, but in essence, pretty much flat to just on an improvement. To be honest, that rental revenue is something that we are really pleased with. We increased fleet into a softer sales environment that we were not anticipating, and we could certainly argue that we increased fleet a little bit too much, particularly in New Zealand.

Speaker #2: To this bit, those discussions have remained positive and are going well. Moving on to rental and sales. Look, the rentals business is in a good state.

Speaker #2: Yes, our average rental fleet went up around 800 vehicles. The rent part was an interesting one this year, depending on if you look at it on a constant currency basis.

Speaker #2: But in essence, pretty much flat to just on an improvement. And, to be honest, that rental revenue is something that we're really pleased with.

Speaker #2: We increased fleet into a softer sales environment that we weren't anticipating, and we could certainly argue that we increased fleet a little bit too much, particularly in New Zealand. But then those disruptions that occurred globally were significant.

Grant Webster: Those disruptions that occurred globally were significant. Vehicle sales clearly heading down over last year, reflecting the fact that the market is down. Margins are holding up, so it has not been an issue of price. What we have seen overall is a real opportunity for us to continue to drive the engine of this business, the rentals business. I will hand over to Ollie to talk about the balance sheet, the operating cash flows, and the dividend.

Speaker #2: Vehicle sales are clearly happening down over the last year, reflecting the fact that the market's down. Margins are holding up, so it's not been an issue with price.

Speaker #2: What we've seen overall is a real opportunity for us to continue to drive the engine of this business—the rentals business. I'll hand over to Ollie to talk about the balance sheet.

Speaker #2: The operating cash flows and the dividend.

Speaker #1: Thank you, Grant. Net debt of $436 million is heading in the right direction, and the equity ratio is sitting—net capex was higher than we originally anticipated, and that's largely attributable to the vehicle sales shortfall following the breakout of the conflict.

Ollie Farnsworth: Thank you, Grant. Net debt of NZD 436 million is heading in the right direction, and the equity ratio is sitting. Net CapEx was higher than we originally anticipated, and that is largely attributable to vehicle sales shortfall following the breakout of the conflict. Non-fleet CapEx has reduced significantly. That reflects the fact that previous year had new branch investments in several areas, most notably Waitomo headquarters in Auckland. In a good funding position, and we are pleased with the balance sheet progress. Moving on to operating cash flow. We have had another year of positive operating cash flows at NZD 67 million. Improved profitability is a key contributor to that, together with inventory reduction. The inventory reduction is primarily driven by the strategic initiatives in Australia retail and Australia manufacturing. From a dividend perspective, Grant covered the dividend situation well in the executive summary.

Speaker #1: Note fleet CapEx has reduced significantly. That reflects the fact that the previous year had new branch investments in several areas, most notably the Waitomo Kia headquarters in Auckland.

Speaker #1: A good funding position, and we're pleased with the balance sheet progress. Moving on to operating cash flow—so we've had another year of positive operating cash flows, at $67 million.

Speaker #1: Improved profitability is a key contributor to that, together with inventory reduction. The inventory reduction is primarily driven by the strategic initiatives in Australia Retail and Australia Manufacturing.

Speaker #1: From a dividend perspective, Grant covered the dividend situation well in the executive summary. So, a four-year dividend of 10.5 cents per share, made up of the final dividend of 7.5 cents per share—that's 100% included—and a 10% rate.

Ollie Farnsworth: A full year dividend of 10.5 cents per share, made up of a final dividend of 2.5 cents per share. That is 110% improved and in the set frame. That is keeping with a 50% payout ratio that we have had in recent times, and we have maintained an approach of no dividends reinvestment plan. I will pass back to Grant to talk through the outlook.

Ollie Farnsworth: A full-year dividend of 10.5 cents per share, made up of a final dividend of 2.5 cents per share. That is 110% improved and in the set frame. That is keeping with a 50% payout ratio that we have had in recent times, and we have maintained an approach of no dividends reinvestment plan. I will pass back to Grant to talk through the outlook.

Speaker #1: And that is in keeping with the 50% payout ratio that we've had in recent times. We've maintained an approach of no dividend reinvestment plan.

Speaker #1: I'll pass back to Grant to talk through the other.

Speaker #2: Thanks, Ollie. Look, we've talked about rentals being the heart of the business. We are a tourism business. Our rentals are at the core part of our revenue generation.

Grant Webster: Thanks, Ollie. We have talked about rentals being the heart of the business. We are a tourism business. RV rentals are at the core part of our revenue generation. So to see the total services revenue increase by 11% to nearly NZD 520 million was again a pleasing result in the market environment. It is indicative of the work that our sales and marketing team has been doing alongside a more buoyant tourism backdrop in all jurisdictions apart from the US. Let us just talk about the Southern Hemisphere. Prior to the Middle East conflict, the Southern Hemisphere bookings were trending really positively. As of February, New Zealand was up 25% and Australia was up over 20%. Then clearly we had the Middle East conflict impact. So by August, those bookings had dropped by 15% ahead for New Zealand and 5% for Australia. This is a really interesting point.

Speaker #2: So, to see the total services revenue increase by 11% to nearly $520 million was a pleasing result in the market environment. It is indicative of the work that our South marketing teams have been doing.

Speaker #2: Alongside a more buoyant international tourism backdrop in all jurisdictions apart from the US. So let's just talk about the Southern Hemisphere. Prior to the Middle East conflict, the Southern Hemisphere business was trading really positively.

Speaker #2: As of February, New Zealand was up 25%, and Australia was up over 20%. Then, clearly, we had the Middle East conflict in there. So, by August, those bookings had dropped to being 15% ahead for New Zealand and 5% for Australia.

Speaker #2: However, this isn't a really interesting point. The last four weeks have shown that New Zealand has actually been up around 4%, and Australia, 15%.

Grant Webster: The last four weeks have shown that New Zealand has actually been up around 14% and Australia 15%. So we have seen a recovery in bookings in the last month. Is that enough momentum to recover where we were at? Not for Q1, potentially for the high season. It is too soon to say, particularly continuing to see volatility. Northern Hemisphere. The booking intake were obviously less impacted by the conflict because obviously there is less flight disruption. Canada is well on track to deliver a record rental revenue result in the 2026 summer season, and that February was up 30% or around 30%, with the actual rental revenue achieved during the June-July period around 25%. The US story as well will be talked about for some time. Pleasingly, obviously for the summer, it has recovered from being down 35% to only 15%.

Speaker #2: So, we have seen a recovery in bookings in the last month. Is that enough momentum to recover where we were at? Not for Q1, potentially for the high season.

Speaker #2: It is too soon to say. We're continuing to see volatility. In the Northern Hemisphere, the booking intake was obviously less impacted by the conflict, because there's less flight disruption.

Speaker #2: Canada as well, to deliver a record rental revenue result in the 2026 summer season. And at February, it was up 30%, or around 30%, with the actual rental revenue achieved during the June–July period around 25%.

Speaker #2: The year story is one we'll be talking about for some time. Pleasingly, obviously for the summer, it's recovered from being down 35% to only 15%.

Speaker #2: Importantly, we're seeing in recent weeks more than 45% improvements over the prior year's bookings. We do wonder and believe that the FIFA World Cup in the USA may have driven a sentiment change.

Grant Webster: And really importantly, we are seeing in recent weeks, although 45% improvements over the prior year's bookings. We do wonder and believe that the FIFA World Cup in the USA may have been a sentiment change. Certainly, the increases in bookings that were very well aligned to that timing. Move on to RV sales. It is clear we have still got pressure on the sales side of the market. We can see it around the world. RV Industry Association wholesale shipment data in the US shows a reduction of 11% since the start of the year. And it is interesting that both Thor and Camping World have recently reduced their expectations for total shipments for the 2026 calendar year. Overall, we do expect a recovery at some point. The long-term fundamentals of the RV industry remain strong. People want to travel in RVs, and they want this kind of holiday.

Speaker #2: Certainly, the increases in bookings that we've seen are very well aligned to their timing. Moving on to sales, it's clear we've still got pressure on the sales side of the market.

Speaker #2: We can see it around the world. Are the industry association wholesale shipment data in the US showing a reduction of 11% since the start of the year?

Speaker #2: It's interesting that both Thor and Kempton World have recently reduced their expectations for total shipments for the 2026 calendar year. Overall, we do expect a recovery at some point.

Speaker #2: The fundamentals of the industry remain strong. People want to travel in RVs, and they want this kind of holiday. More importantly, we still think that THL's focus on our rentals provides even more of a way for people to experience expensive, large RVs.

Grant Webster: People want to travel in RVs, and they want this kind of holiday. More importantly, we still think that THL's focus on RV rentals provides even more. Diverted away from people purchasing expensive large RVs, then we are still in the right place. People still want to travel in RVs. We are seeing the number of trips occurring in people's RVs increasing. We are seeing the average age of people buying RVs decreasing. People still want to take these leisure holidays, and we are sitting there ready for them from a rental perspective. Let's move on to the outlook. As we discussed earlier, when we entered the second half of the year, we had strong momentum across the rentals business. Booking intakes were well ahead of the prior year in all markets. Apart from the US, we were expecting meaningful earnings growth in FY 2027.

Grant Webster: More importantly, we still think that THL's focus on RV rentals provides even more. Diverted away from people purchasing expensive large RVs, then we are still in the right place. People still want to travel in RVs. We are seeing the number of trips occurring in people's RVs increasing. We are seeing the average age of people buying RVs decreasing. People still want to take these leisure holidays, and we are sitting there ready for them from a rental perspective. Let's move on to the outlook. As we discussed earlier, when we entered the second half of the year, we had strong momentum across the rentals business. Booking intakes were well ahead of the prior year in all markets. Apart from the US, we were expecting meaningful earnings growth in FY27.

Speaker #2: And we're still at the right place. People still want to travel in RVs. We're seeing the number of trips occurring in people's RVs increasing.

Speaker #2: We're seeing the average age of people buying RVs decreasing. People still want to take these leisure holidays, and we're sitting there ready for them from a rental perspective.

Speaker #2: Let's move on to the outlook. As we discussed earlier, when we entered the second half of the year, we had strong momentum across the rentals business.

Speaker #2: Booking intakes were well ahead of the prior year in all markets, and, apart from the US, we were expecting meaningful earnings growth in 2027.

Speaker #2: The disruption from the Middle East conflict created a gap. But it's a gap that we see possibly could recover over the high season, but it's unlikely to in Q1.

Grant Webster: The disruption from the Middle East conflict created a gap, but it is a gap that we think possibly could recover over the high season but is unlikely to in Q1. We are still expecting some level of growth in FY27, but we know with the level of volatility in the business today and in the industry today, it is too difficult to provide guidance at this point in time. In summary, we were on the right track. We did the right things. We initiated our strategic initiatives and executed them well. We are well set for the future. We have got a positive balance sheet, and we have got the business in the right place to keep moving forward. I will end there and hand over back to Chuck to manage us through the Q&A.

Grant Webster: The disruption from the Middle East conflict created a gap, but it is a gap that we think possibly could recover over the high season but is unlikely to in Q1. We are still expecting some level of growth in FY 2027, but we know with the level of volatility in the business today and in the industry today, it is too difficult to provide guidance at this point in time. In summary, we were on the right track. We did the right things. We initiated our strategic initiatives and executed them well. We are well set for the future. We have got a positive balance sheet, and we have got the business in the right place to keep moving forward. I will end there and hand over back to Chuck to manage us through the Q&A.

Speaker #2: We are still expecting some level of growth in FY27, but we know, with the level of volatility in the business today, and in the industry today, it is too difficult to provide guidance at this point in time.

Speaker #2: So, in summary, we were on the right track. We did the right things. We initiated our strategic initiatives and executed them well. We are well set for the future.

Speaker #2: We've got a positive balance sheet, and we've got the business in the right place to keep moving forward. I will end there and hand back over to Chuck to manage us through the Q&A.

Speaker #3: Thank you. If you wish to ask a question, please press star, then one on your telephone and wait for your name to be announced.

Operator: Thank you. If you wish to ask a question, please press star then one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then two. If you are on a speakerphone, please pick up the handset to ask your question. The first question will come from Andy Bowley with Forsyth Barr. Please go ahead.

Speaker #3: If you wish to cancel your request, please press star, then two. If you are on a speakerphone, please pick up the handset to ask your question.

Speaker #3: And the first question will come from Andy Valley with Forsyth Bar. Please go ahead.

Speaker #1: Thanks, operator. Good morning or good afternoon, guys. A few questions from me. The first of which is around fleet development. Fleet, I guess, in the past year has held pretty steady thanks to the UK divestment and the increases in fleet, particularly in New Zealand and Australia.

Andy Bowley: Thanks, operator. Good morning or good afternoon, guys. A few questions from me, the first of which is around fleet development. Fleet, I guess, in the past year has held pretty steady thanks to the UK divestment, and the increases in fleet, particularly in New Zealand and Australia. How are you expecting the fleet to evolve over the next 12, 18, 24 months in terms of what you see today, particularly around the vehicle sales market challenges that you have got?

Speaker #1: How are you expecting the fleet to evolve over the next 12, 18, and 24 months in terms of what you see today, particularly around the vehicle sales market challenges that you've got?

Speaker #2: Yeah, thanks, Andy. And thanks for joining the call, and thanks in your note for acknowledging you're part of our result this year with your kind of dream holiday.

Grant Webster: Yeah. Thanks, Andy. Thanks for joining the call, and thanks in your note for acknowledging your part of our result this year with your CanaDream holiday. It was great to see. Thank you. I think the fleet will increase as we recover from that post-COVID lull, and so over the next 12 to 24 months, we'd see the growth rate in fleet very much diminishing relative to the last three years. So still some growth, but we have room to move from a utilization perspective in most of our markets.

Speaker #2: It was great to see. Thank you. Post-COVID lull. And so, over the next 12 to 24 months, we'd see the growth rate in fleet very much diminishing relative to the last three years.

Speaker #2: So, still some growth, but we have room to move from a utilization perspective in most of our markets.

Andy Bowley: If we look at geographically, Grant, where are you expecting growth to be most directed?

Speaker #1: If we look at it geographically, Grant, where are you expecting growth to be most directed?

Speaker #2: Well, so we're hitting.

Grant Webster: Well, so we're heading towards that-

Andy Bowley: Just to clarify that, just fleet growth.

Speaker #1: But just to clarify that, just fleet growth.

Andy Bowley: Just to clarify that, just fleet growth.

Speaker #2: Oh, okay. So look, fleet growth is still going to be centered on the hemisphere at the moment, because we've still got to prove out the North American model and make sure that that's working well.

Grant Webster: Oh, okay. Look, fleet growth is still going to be centered on the Southern hemisphere at the moment because we've still got to prove out the North American model and make sure that that's working well. So it'll be Southern hemisphere related. There will be a little bit there. As we get any competence in the US building and building, we could see more fleet growth there. Canada does need a little bit more fleet growth, but Southern hemisphere focused.

Speaker #2: So, it'll be Southern Hemisphere related. There'll be a little bit of that, as we get any confidence in the U.S. building and building, we could see more fleet growth there.

Speaker #2: Canada does need a little bit more fleet growth, but with a southern hemisphere focus.

Speaker #1: Great, okay. So, if we then translate that into the balance sheet with fleet growth, what are we expecting over the next couple of years from a broader net debt perspective?

Andy Bowley: Great. Okay. If we then translate that into balance sheet with fleet growth, what are we expecting over the next couple of years from a broader net debt perspective? Is this the low point and we start to see some reinvestment back into the broader business from a balance sheet point of view?

Speaker #1: Is this the low point, and will we start to see some reinvestment back into the broader business from a balance sheet point of view?

Speaker #2: I think we will double down on it.

Grant Webster: No, I don't think we've, unfortunately, looked at it in general. I didn't.

Andy Bowley: Sorry, Grant Webster. I'm not sure if it's just me, but the call is cutting up intermittently here, so it's quite difficult to hear what you're saying at times. Now I can't hear anything.

Speaker #1: Sorry, Grant, I'm not sure if it's just me, but the call is cutting out intermittently here, so it's quite difficult to hear what you're saying at times.

Speaker #1: And now I can't hear anything.

Speaker #2: Can you—what about now, Andy?

Grant Webster: Can you. What about now, Andy?

Speaker #1: I can hear you now, Grant. Yep.

Andy Bowley: I can hear you now, Grant. Yep.

Speaker #2: Okay, sorry. We just moved across to the secondary line—apologies for that. So, yeah, look, net debt—I'll hand over to Ollie.

Grant Webster: Okay. Sorry, we just moved across to the secondary line. Apologies for that. Yeah, net debt, I will hand over to Ollie.

Speaker #4: I think so. What we talked about—a target of $400 million—which we've not reached this year, given some of the circumstances around sales, but ultimately, we should still be heading towards that kind of area.

Ollie Farnsworth: I think so. Look, we talked about a target of NZD 400 million, which we have not reached this year with some of the circumstances around sales. But that ultimately we should be heading towards that kind of area still. So that is still our outlook. In terms of an actual target and timeframe, that is to be determined just based on the environment. But we should be managing around those levels.

Speaker #4: So that's still our outlook in terms of an actual target and timeframes. That could be determined just based on the environment, but we should be managing around those levels.

Speaker #1: So just to clarify, we're expecting net debt to fall further over the next couple of years, notwithstanding some lumpiness in light of, I guess, timing of vehicle sales.

Andy Bowley: So, just to clarify, we are expecting net debt to fall further over the next couple of years, notwithstanding some lumpiness in light of, I guess, timing of vehicle sales.

Speaker #4: Yeah, exactly right.

Ollie Farnsworth: That is exactly right.

Speaker #1: Great. And maybe lastly from me, just on slide 14 regarding rental booking trends and the rental revenue intake—could we dive into some of the detail there?

Andy Bowley: Great. Lastly from me, just on slide 14, rental booking trends and the rental revenue intake. Could we just dive into some of the detail there, New Zealand, Australia, North America, in the context of where the growth is coming from in terms of yield versus booking days or RevPAR versus utilization. Both in terms of most recent trends, say, intakes for the last 4 weeks in New Zealand and Australia. But also where you are seeing the growth in CanaDream and most recently in terms of what you are saying about the US uptick, albeit in a short period of time and going into low season.

Speaker #1: New Zealand, Australia, North America—in the context of where the growth's coming from in terms of yield versus booking days, or RevPAR versus utilization?

Speaker #1: Both in terms of the most recent trends—say, intakes for the last four weeks for New Zealand and Australia—but also where you're seeing the growth in Canada, and most recently in terms of what you're saying about the US uptick, albeit in a short period of time and going into the low season.

Speaker #2: So, the short sort of answer—you probably want an incredibly detailed, long answer—but the short answer is that band yield is pretty static around the world.

Grant Webster: The short answer, you probably want an incredibly detailed long answer. But the short answer is that van yield is pretty static around the world. Static doesn't mean going backwards. But we are certainly getting the inflationary lift that we would hope and sort of plan for within our core metrics, so that 2% to 3%. So that is fine on van yield. So it is primarily a days driven story. And within that, we are getting some ancillary revenue benefits that Maxim's have taken, but predominantly a day story. And from a utilization perspective, when you think about RevPAR, as we indicated, we think we have got some utilization opportunities in USA, Australia, and New Zealand. CanaDream over the peak season is maxed out.

Speaker #2: Static doesn't mean going backwards, but we're certainly getting the inflationary lift that we would hope and sort of plan for within our core metrics.

Speaker #2: So that 2% to 3%. So that's fine on van yield. So it is primarily a days-driven story. And within that, we are getting some ancillary revenue benefits from some actions that we've taken, but predominantly a days story.

Speaker #2: And from a utilization perspective, when you think about RevPAR, as we indicated, we think we've got some utilization opportunities in the USA, Australia, and New Zealand.

Speaker #2: Canada, over the peak season, is pretty well maxed out.

Speaker #1: Great. Thank you, Grant.

Andy Bowley: Great. Thank you, Grant.

Speaker #3: Again, if you have a question, please press star then one. As there are no further questions at this time, I would like to hand the conference back over to Mr. Webster for any closing remarks.

Operator: Again, if you have a question, please press star then one. As there are no further questions at this time, I would like to hand the conference back over to Mr. Webster for any closing remarks. Please go ahead, sir.

Speaker #3: Please go ahead, sir.

Speaker #2: Well, brilliant. Not sure what the reason is for the fact that that's probably one of our shortest year-end result presentations. Thank you, Andy, for the questions.

Grant Webster: Well, brilliant. I am not sure what the reason is, the fact that that is probably one of our shortest year-end result presentations. Thank you, Andy for the questions. We know there are a few people away and obviously a couple of the analysts are conflicted as well at the moment given what is going on. We look forward to catching up with people over the coming week and thank you all very much for following THL. Thanks, Chuck.

Speaker #2: We know there are a few people away, and obviously a couple of the analysts are conflicted as well at the moment, given what's going on.

Speaker #2: We look forward to catching up with people over the coming week, and thank you all very much for following THL. Thanks, Chuck.

Operator: You are welcome. That does conclude our conference for today. Thank you for your participation. You may now disconnect.

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Q4 2026 Tourism Holdings Ltd Earnings Call

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