Troubled Tourism Holdings has forecast a turnaround profit for its six-months trading to December, off the back of a successful merger with Kea Campers and United Campervans last year.
Recently appointed chairman Rob Campbell said the company was now forecasting earnings before interest and tax to rise by 25%, from $5.3 million a year ago to $6.6 million and reverse last year's $500,000 million after-tax loss into an after-tax profit of $2.5 million.
He attributed the earnings growth to last year's successful merger of Tourism Holding's New Zealand rentals business with Kea and United. A continued strong performance from US operations assisted.
The October merger cost $69.5 million, allowing Tourism Holdings to take an oversupply of vans out of the market.
''The Tourism Holdings board was focused on improving the operating efficiency of the business,'' he said at the annual shareholder meeting in Auckland on Wednesday.
Tourism Holdings shares were up 18% and briefly hit $1 - a three year high - following the announcement.
Craigs Investment Partners broker Peter McIntyre said the decision to merge was a ''brave strategy'', but it had paid off and Tourism Holdings cashflow had been buoyed, which would also give investors confidence.
Mr Campbell said, aside from working on getting costs down, Tourism Holdings had continued to reduce the vehicle fleet to a size which matched demand.
Chief executive Grant Webster was encouraged by the level of forward bookings into the New Zealand high season, which begins this month, and the company expected it to be ''our busiest season ever''.
Mr Webster said he expected China to be in the top five markets making bookings with Tourism Holdings.
