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  • Robert Campbell's re-election as a director vote is only 84% compared to Debra Birch at 99%.

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    • El Montes 2019 earnings are supposed to be lower than this year, lagging about 12 months behind expectations.
      Yet Campbell stated 'El Monte isn't a problem'. Sounds a bit like a problem to me.

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      • http://www.scoop.co.nz/stories/BU181...lower-cost.htm

        I'm personally glad to see THL hold their nerve and give away the silverware. Well done.

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        • AIR downgrade today having knock on effects to THLa red flag and worry about the economy in general as well
          .
          The revised guidance reflects updated revenue forecasts based on recent forward booking trends. Revenue growth is forecast to remain positive, albeit at a slower rate than previously anticipated. Markets showing signs of slower growth include leisure travel within domestic New Zealand and softening inbound tourism traffic.

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          • Highlights:
            o Operating Profit before Interest and tax (EBIT) up 4% on pcp
            o NPAT of $17.5M, compared to $22.8M in the prior corresponding period (pcp),
            down 23%
            o Rental and services revenue growth of 6% on the pcp
            o Vehicle sales revenue decline of 14% on the pcp (driven by the USA)
            o Dividend declared of 13cps (partially imputed to 50%); in line with last
            year
            o New Zealand RV business hits new records, up on Lions tour half-year
            o TH2 investment on track, with strong prospects
            o Full year NPAT forecast around $32M

            Ouch, not a good report. Looks to me like costs, such as TH2, are outstripping revenue growth and the decline in US sales is not good at all. Even worse, the RV rental business boost was from a pure one off. Dividend steady with last year not going to be taken well by NZ fundies focused on dividends and EPS growth...

            $4.46 lows about to be smashed. Might see a 3 in front soon.

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            • More bad news from AIR:

              http://www.stuff.co.nz/travel/news/1...id=app-android

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              • Originally posted by Moosie View Post
                Of course, the domestic demand for air travel is soft as most tourists are hiring and happily going around in Camper vans...

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                • NPAT down. Cashflow negative. Tourism 'soft' including flags from Air New Zealand. The greater market appears to be at the later stages of a bull cycle. Costly and uncertain tech project underway. Shareprice trending down. I'm not seeing a lot of reasons to be invested in THL at the moment (I'm not).
                  Any body care to guess the bottom? I'll start for fun - $2.31 will be the bottom of the next cycle.

                  Comment


                  • Originally posted by Arianna View Post
                    NPAT down. Cashflow negative. Tourism 'soft' including flags from Air New Zealand. The greater market appears to be at the later stages of a bull cycle. Costly and uncertain tech project underway. Shareprice trending down. I'm not seeing a lot of reasons to be invested in THL at the moment (I'm not).
                    Any body care to guess the bottom? I'll start for fun - $2.31 will be the bottom of the next cycle.
                    Nice post. I see NZ accommodation guest nights are flat too, so it looks like tourism in NZ may finally be coming off the boil. Another reason to add to the pessimistic view of this share.

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                    • Originally posted by nextbigthing View Post

                      Nice post. I see NZ accommodation guest nights are flat too, so it looks like tourism in NZ may finally be coming off the boil. Another reason to add to the pessimistic view of this share.
                      You need to see a long term forecast rather than looking at one month NZ night data

                      https://www.mbie.govt.nz/immigration...ism-forecasts/


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                      • Well, it might be worthwhile to do a sanity check on the underlying assumptions of this forecast.

                        1) Strong growth in Asian markets, particular China?

                        Not really a given, isn't it? Just play through some mental scenarios considering how the war against free trade waged by the orange gorilla might work out.

                        Not all options (or hardly any) would end up with better Asian growth ... remember - he wants to crush China and he has a big ego.

                        2) continued growth in established markets like Australia, US and the UK

                        2a) Australia: See above. If the orange gorailla takes out China, than Australia will suffer big way. To whom would you think they sell their iron ore and coal if China does not need it anymore (due to lack of growth) and the US have high import tariffs for everything?

                        On top of that - how much growth do you think the Australian housing crisis will add?

                        2b) US: US consumers already noticed that they need to pay for the gorillas wars. This is a lose-lose game. Higher cost for consumers means less money for tourism. Continued growth? Yeah right.

                        2c) UK - do I really need to mention the impact of a headless country torn apart by idiots, traitors and fascist hardliners on the economy? Industry is leaving the UK in droves and not sure whether the British dole will pay for the next NZ holidays? Maybe we could expect some more immigration from this source, but increased tourism?

                        Honestly - I don't think that this forecast is worth the cyberspace it consumes ...

                        Comment


                        • Originally posted by BlackPeter View Post
                          Well, it might be worthwhile to do a sanity check on the underlying assumptions of this forecast.

                          1) Strong growth in Asian markets, particular China?

                          Not really a given, isn't it? Just play through some mental scenarios considering how the war against free trade waged by the orange gorilla might work out.

                          Not all options (or hardly any) would end up with better Asian growth ... remember - he wants to crush China and he has a big ego.

                          2) continued growth in established markets like Australia, US and the UK

                          2a) Australia: See above. If the orange gorailla takes out China, than Australia will suffer big way. To whom would you think they sell their iron ore and coal if China does not need it anymore (due to lack of growth) and the US have high import tariffs for everything?

                          On top of that - how much growth do you think the Australian housing crisis will add?

                          2b) US: US consumers already noticed that they need to pay for the gorillas wars. This is a lose-lose game. Higher cost for consumers means less money for tourism. Continued growth? Yeah right.

                          2c) UK - do I really need to mention the impact of a headless country torn apart by idiots, traitors and fascist hardliners on the economy? Industry is leaving the UK in droves and not sure whether the British dole will pay for the next NZ holidays? Maybe we could expect some more immigration from this source, but increased tourism?

                          Honestly - I don't think that this forecast is worth the cyberspace it consumes ...
                          bit harsh there BP

                          over recent years their forecasts have ended up quite a lot lower than what the numbers turned out to be. One could say their forecasts have been rather conservative.

                          whatever you are entitled to rubbish mbie forecasts ....as you hero says ----Prediction is very difficult, especially about the future

                          cheers

                          Comment


                          • Originally posted by Winner69 View Post

                            bit harsh there BP

                            over recent years their forecasts have ended up quite a lot lower than what the numbers turned out to be. One could say their forecasts have been rather conservative.

                            whatever you are entitled to rubbish mbie forecasts ....as you hero says ----Prediction is very difficult, especially about the future

                            cheers
                            Don't forget - we used to live for the last 10 years in a never ending bull run. If you assume that this scenario will continue for the the next 5 years (until 2024), than absolutely - take their forecasts seriously ...

                            Comment


                            • Originally posted by BlackPeter View Post

                              Don't forget - we used to live for the last 10 years in a never ending bull run. If you assume that this scenario will continue for the the next 5 years (until 2024), than absolutely - take their forecasts seriously ...
                              business cycles do not die from old age alone

                              “If I had a choice today for a 10-year purchase of a 10-year bond… or buying the S&P 500 and holding it for 10 years, I’d buy the S&P in a second,” Buffett said.

                              https://www.forbes.com/sites/greatsp.../#731176367069

                              Comment


                              • I'm going to weigh in here (I'll play nicely, I swear!)

                                While I am bearish on net immigration levels for NZ in the short-medium term as the government looks to restrict relatively relaxed standards, it has been obvious to me over the past few months that visitor numbers are not slowing down. I am one of the tourists within my own country types, and have noted, first hand, within our vacation hotspots such as the Tongariro Alpine Crossing, Aoraki/Mt Cook National Park, Taranaki and other areas that business is still booming. Feedback I receive from others within regions across NZ tell me the same message, and I see that visitor nights are still trending upwards across the country (MCK must be doing well, hint hint...). Family members who run a motel in a relative regional backwater of NZ have never had such booming occupancy rates for all of 2018 either and say that 2019 is shaping up to be even better.

                                Now, as for THL, there are some issues around the campervan saga and revenue decling from sales. There is also the TH2 issue which management is decidedly silent on (and always raises red flags with me, especially as it was a much touted addition to the business). I suspect this has has been due to increased costs ($3.4M initial cost stated vs $5.4M actual for the interim). I am also wary of management saying that "TH2 is on track with early positive signs and prospects" when nothing has even been launched yet (see below link). The financials aren't too flash near-term either:

                                • Operating Profit before Interest and tax (EBIT) up 4% on pcp
                                • NPAT of $17.5M, compared to $22.8M in the prior corresponding period (pcp), down 23%
                                • Rental and services revenue growth of 6% on the pcp
                                • Vehicle sales revenue decline of 14% on the pcp (driven by the USA)
                                • Dividend declared of 13cps (partially imputed to 50%); in line with last year
                                • New Zealand RV business hits new records, up on Lions tour half-year
                                • TH2 investment on track, with strong prospects
                                • Full year NPAT forecast around $32M

                                So, my initial thought is there will be another half of weakness here, with the possibility of a downgrade due to further cost escalations in the TH2 JV, but the dividend is steady and should provide price support for THL here. In the long-term, this Moose believes THL will be a good investment with increasing EPS and dividends as the new JV is launched, joins together a relatively fragmented market and adds vertical integration to the business, but investors need to be aware that short to medium term more pain may be ahead. As always, timing is everything, and I would wait for management to come out with more info on TH2 and certainty around costs and confirmation of the FY20 $50M NPAT target before jumping in here.

                                Some good initial research here from the 1H19 results and presentations: https://www.nzx.com/announcements/331072

                                TH2 website (I suggest signing up for notifications for when it actually launches!):https://th2.com/

                                Re-read the TH2 initial presentation: http://www.thlonline.com/financialin...esentation.pdf

                                Visitor Nights NZ: https://www.stats.govt.nz/topics/accommodation

                                And no post from me would be complete without a chart! (higher lows, higher highs for visitor numbers to NZ)

                                Click image for larger version

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                                HLG

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