Tourism Holdings (ASX:THL): Facing a decimation from Trump’s tariffs, it might be taking an easy way out (A NZ$500m+ takeover bid)

Tourism Holdings (ASX:THL) a company that has purported to be New Zealand’s premier tourism company is delisting just 2 and a half years into its stint on the ASX.

It is toying with a NZ$2.30 per share bid (worth NZ$509m/A$472m all up) made by a consortium of BGH Capital and the Trouchet family who are behind Apollo Motorhomes, which THL bought in 2022. It has not accepted the bid, but we think it will, and the market probably thinks so too.

Who is Tourism Holdings?

It was founded in 1984, listed on the NZX in 1986 and joined the ASX in late 2022. Tourism Holdings has always been focused on New Zealand tourism, but after beginning as a scenic helicopter flight operator, it specialises on Recreational Vehicles (RV). It also now has business in Australia, Europe and North America.

Obviously it was decimated by the pandemic and it was a slow recovery. But it set itself up well for future success, including buying Apollo Tourism (ASX:ATL). In FY23, it made a $49.9m profit and $663.8m revenue, the latter figure nearly double the year before. Then in FY24, it made a $51.8m underlying profit (but it fell to $39.4m on a statutory basis due to a $12.4m impairment) off $922m revenue.

Steady but slow growth

Since listing on the ASX, Tourism Holdings was a success. something that cannot be said in respect of many other IPOs post-pandemic. Shares gained 12% in the first few months and held firm until early 2024.

But the weakening New Zealand economy – and to a lesser extent the Australian economy – hit THL. Shares never recovered (until the takeover offer that is) from a plunge in May 2024 when it slashed its profit guidance from $75m to $50-53m, just 3 months after reiterating it. It retained the goal of a $100m NPAT for FY26. It ultimately met that guidance range, as noted above, but then withdrew the goal of making a $100m profit.

Despite THL saying,’ we remain steadfast in our belief that we have the necessary components and will advance towards our goal as tourism rebounds and general economic conditions improve,’ investors took it with a grain of salt given it thought FY26 was realistic just 3 months prior.

Things went from bad to worse and its 1H25 profit was down over 30% – both on a statutory and underlying basis. All it promised was that it was focused on increasing its profit but couldn’t guarantee growth. Any hope was dashed when Trump’s tariffs increased resentment on Europeans and Canadians for US travel.

THL told investors booking intakes from key European countries for the past week were 40-50% down on last year’s levels. Moreover, the company said there was no indication things would improve, let alone that domestic US bookings (or domestic bookings in other rental markets like Canada) would offset the expected shortfall. Thl expects its underlying profit will be ‘significantly below the current analyst consensus of $45.2m’. If was any consolation, the company believed it had ‘no need or intention to raise equity’.

A takeover bid

THL unveiled the bid, from BGH and the Trouchet family. It has not formally accepted the offer but formed a board subcommittee and hired Jarden and MinterEllisonRuddWatts to advise it. Luke Trouchet has taken a leave of absence given a potential conflict of interest and won’t participate in any discussions.

THL has not accepted the bid yet, but has not rejected it outright. We think it ultimately will given investor confidence in the company is dashed – it’ll take a long time to regain it again. We don’t envision a positive share price reaction if the bid is knocked back.

‘THL’s board and management are very aware of THL’s recent performance, which has been largely influenced by factors beyond the company’s control, such as the impact of poor consumer confidence on the demand for recreational vehicles, and recent geopolitical and tariff developments impacting travel sentiment,’ the board said.

‘Over the last few months, THL has been working on a range of initiatives to address these performance challenges and enhance long-term value for shareholders. THL expects to update the market on these initiatives and their outcomes at the appropriate time.

‘The board will act in what it considers to be the best interests of the company and its shareholders, including assessing the merits of this [takeover offer]’.

Conclusion

In many ways it’ll be sad if it leaves because it is another company punished for a few mistakes and written off forever by investors. But the company can talk vaguely about its ‘range of initiatives’ all it likes, investors want to see results and they are unlikely to come as long as people are put off travel to the US – and that could be until Donald Trump leaves office.

We’ve only got to wait another 3 and a half years until that happens.

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