Tourism Holding divests share in Camplify due to lack of return on funds

On the heels of a mixed recreational vehicles (RVs) market, global tourism operator Tourism Holdings Limited (ASX: THL) has finalised the sale of its 14.14% stake in Camplify Holdings Limited (ASX: CHL), a peer-to-peer RV rental operator. The sale, based on a per-share price of $1.90, fetched approximately $19.2 million in gross proceeds for thl.

Commenting on the sale, thl Chief Executive Officer Grant Webster stated, “Just over a year on from the merger with Apollo Tourism & Leisure, we have reviewed our position on our Camplify shareholding and have decided to divest, given our focus on return on funds employed at thl and the fact that the shareholding is not currently delivering a return on funds.” 

This decision comes against the backdrop of Camplify’s performance, as detailed in its financials. In the first half of FY24, Camplify witnessed a substantial uptick in revenues from ordinary activities, marking a 95.4% increase to $24.2m. Despite this impressive growth, Camplify’s market penetration remains modest, with less than 1.5% of the total registered RVs.

There were no dividends paid, recommended or declared during the period. 

Driving Camplify’s financial momentum, the company reported growth in its Gross Transaction Value (GTV) to $89.3 million for the half-year period. This represents a 93.6% increase compared to the previous year, translating to a three-year Compound Annual Growth Rate (CAGR) of 98%. Additionally, Camplify’s total bookings climbed by 59% to 44,782.

Its expansion efforts also include strategic acquisitions, like the integration of German RV company Paul Camper and the recent acquisition of Rent a Tent, further consolidating Camplify’s market presence and diversifying its offerings.

While thl’s divestment decision underscores its strategic realignment, the Company’s financial performance in H1 FY24 reflects a mixed landscape. Total revenue for thl declined from $441.03m in the previous year to $419.3m. This decline was observed across key RV markets, including Australia, New Zealand, and the US.

In Australia, total RV sales volumes saw a notable decline of 19% against the pro forma previous year. Similarly, in the US market, revenue dropped from $88.4 million in H1 FY23 to $74.6 million, with EBIT taking a hit of 40% due to challenges in vehicle sales performance.

Despite these challenges, thl remains optimistic about its prospects, with a particular focus on streamlining operations and optimising profitability. The Company’s net debt stood at $403 million as of December 31, 2023, representing a net debt to EBITDA ratio of approximately 2.1x on a trailing 12-month basis.

Webster added, “We continue to believe the peer-to-peer RV rental industry is a valuable one and we remain open to reentering the industry at some point in the future.” 

Camplify aims to capitalise on its momentum by rolling out its MGA Myway globally, a move expected to enhance its core marketplace and broaden its product offerings. Meanwhile, thl is finalising the sale of its shares in Camplify, slated to settle on March 11, 2024.