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FY20 earnings and debt guidance from THL

image Kiwi Experience mothballed

Tourism Holdings informed the market with an advisory that commitments have been provided by thl’s banking partners for debt funding of approximately $225 million, consisting of a number of tranches maturing between September 2021 and July 2022.

 

Given these new funding arrangements and the current outlook for the business, thl has determined that it does not require additional equity.

thl expects to report an underlying net profit after tax of $17.5 – $19 million for the financial year ending 30 June 2020 (FY20).

The share price came back by 7c todayt at $1.85 on a falling market overall.

This guidance excludes the impact of the partial Togo exit undertaken in March 2020, or any potential impairments or other non-ordinary items.

As a result of continued outperformance in vehicle sales, particularly in the United States, as well as an improvement in thl’s working capital position, we now expect that net debt as at 30 June 2020 will be approximately $140 – $145 million.

As part of its year-end process, thl is undertaking impairment testing across its businesses. As a result of the expectation that the Kiwi Experience business will be hibernated until international borders reopen, the board has approved the write-off of the full $3.1 million of goodwill attributed to Kiwi Experience on its balance sheet.

Nevertheless, thl remains committed to the Kiwi Experience business and looks forward to reopening the business when long haul international tourism recommences. thl is in the process of the annual impairment testing which is completed as part of its year-end and audit processes.

Dividend
Reflective of thl’s focus on debt reduction, the inherent uncertainty in the operating environment and thl’s new funding requirements, the thl Board has determined that no final dividend will be declared for FY20.

Financial reporting
Due to the impact of COVID-19, thl intends to rely on the Financial Markets Authority’s extension of financial reporting deadlines. thl expects to release its results for FY20 on Friday, 18 September 2020.

 


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