Market update and preliminary FY22 interim results

22 February 2022

NZX ANNOUNCEMENT
TOURISM HOLDINGS LIMITED (thl)

Market update - thl/Apollo merger and preliminary interim results for H1 FY22

Summary:
• The Apollo Board unanimously recommends that Apollo shareholders approve the Scheme.
• Independent Expert’s Report prepared by Grant Thornton Corporate Finance Pty Ltd has concluded that the Scheme is fair and reasonable and in the best interests of Apollo shareholders.
• thl expectation that H1 FY22 statutory net loss after tax will be approximately NZ$4.4m, inclusive of $2.1m in one-off transaction costs related to the Scheme, and net debt as at 31 December 2021 of approximately NZ$19m.
• On a standalone basis, thl’s result for H2 FY22 (excluding transaction costs of NZ$4.0m that are expected to be incurred in that half) is expected to be a net loss after tax that is improved on the pcp.
Following thl’s announcement on 10 December 2021 that it had entered into a conditional Scheme Implementation Deed with Apollo Tourism & Leisure Limited (Apollo), thl wishes to provide shareholders with a further update in respect of the Scheme as contemplated by its announcement last week.

The Apollo Board has unanimously recommended that Apollo shareholders approve the Scheme, in the absence of a superior proposal and subject to the Independent Expert engaged by it continuing to conclude that the Scheme is in the best interests of the Apollo shareholders who will be voting in respect of the Scheme.

On Friday, the Supreme Court of Queensland made orders convening the Apollo shareholder meeting to vote on whether to approve the Scheme, which will be held on 20 April 2022. Apollo has now registered the Scheme Booklet with the Australian Securities and Investment Committee in advance of it being sent to Apollo shareholders. The Scheme Booklet is the document that provides the notice of meeting to Apollo Shareholders and provides relevant information to Apollo shareholders in order to allow them to assess the Scheme and to decide whether to vote in favour. Attached to the Scheme Booklet is a copy of the Independent Expert’s Report prepared by Grant Thornton Corporate Finance Pty Ltd, which has concluded that the Scheme is fair and reasonable and in the best interests of Apollo shareholders who will be voting in respect of the Scheme.

A copy of the Scheme Booklet, which includes a copy of the Independent Expert’s Report, is attached to this announcement, and thl encourages its shareholders to review the Scheme Booklet.

The Independent Expert has assessed the fair market value of Apollo shares on a control basis at between A$0.709 and A$0.859 per Apollo share and the fair market value of the scheme consideration (being the shares in thl to be issued to Apollo shareholders) on a minority basis at between A$0.753 and A$0.913 per Apollo share. The Independent Expert’s assessment of the fair market value of the scheme consideration on a minority basis falls within or above the Independent Expert's assessed fair market valuation range of Apollo shares on a control basis, with the scheme consideration valuation at the low-end and high-end above the valuation of Apollo shares at the low-end and high-end. As a result, the Apollo Board has unanimously recommended the Scheme to its shareholders in the absence of a superior proposal and subject to the Independent Expert engaged by it continuing to conclude that the Scheme is in the best interests of the Apollo shareholders who will be voting in respect of the Scheme.

In preparing the Scheme Booklet, thl has also had to provide to Apollo certain information regarding thl and the merged group, including thl’s intentions for the merged group following implementation of the Scheme and certain key risks relating to the Scheme. This information is contained in Sections 8 to 10 of the Scheme Booklet, and thl encourages shareholders to review that information. Also included within these sections, at section 8.19, is information in respect of thl’s expected results for the six month period ended 31 December 2021 (H1 FY22) and the six month period ending 30 June 2022 (H2 FY22).

As at the date of this announcement, thl currently expects the following results for H1 FY22:

(a) statutory net loss after tax of approximately NZ$4.4m, inclusive of $2.1m in one-off transaction costs related to the Scheme (compared to previous market guidance on 10 December 2021 of a net loss after tax of between NZ$4m – NZ$7m);
(b) net debt as at 31 December 2021 of approximately NZ$19m;
(c) revenue in the range of NZ$175m, a decrease of NZ$31m on the prior corresponding period (pcp); and
(d) earnings (loss) before interest and tax (EBIT) of approximately NZ$(1.1m), inclusive of $2.1m in one-off transaction costs related to the Scheme, a decrease of NZ$2.9m on the pcp.

On a standalone basis, thl’s result for H2 FY22 (excluding transaction costs of NZ$4.0m that are expected to be incurred in that half) is expected to be a net loss after tax that is improved on the pcp.

thl notes that the above results for H1 FY22 are preliminary and are subject to finalisation following approval by the thl Board. As previously advised, thl will release its financial statements for H1 FY22 to NZX on 25 February 2022.

Apollo has also provided, in section 7.9 of this Scheme Booklet, preliminary results for its half year ended 31 December 2021 and is also expected to release its half year results on 25 February 2022. Following the release of these financial statements, the Apollo Board will obtain the Independent Expert’s confirmation of whether the financial results change the Independent Expert’s opinion that the Scheme is fair and reasonable and, therefore, in the best interests of Apollo shareholders who will be voting on the Scheme, in the absence of a superior proposal. The confirmation will be announced by Apollo to ASX and by thl to NZX in advance of the Scheme meeting.

As thl noted in its 10 December 2021 announcement, the proposed merger is subject to finalisation of appropriate funding arrangements, Australian and New Zealand competition regulatory clearance, and other conditions specified in the Scheme Implementation Deed. Both thl and Apollo continue to work to satisfy these conditions but as at the date of this announcement none of the conditions have been satisfied. However, as at the date of this announcement, neither thl nor Apollo are currently aware of any reasons why the Scheme conditions will not be satisfied. An indicative timetable for the Scheme is also set out in on page 6 of the Scheme Booklet which indicates an effective date for the Scheme in late April 2022 and an implementation date in early May 2022.

thl also notes that it has recently received an indication from Thor Industries that they are open to discussing an early buyout of the thl preference shares in Roadpass Digital (formerly Togo Group) at a discount to the buy-out value of those shares. thl is considering its position and is likely to enter into negotiations over the coming weeks. There is no certainty that a transaction will occur.

Attached to this announcement is the Cleansing Notice that thl has issued in respect of the offer of thl shares that is being made to Apollo shareholders as consideration for their Apollo shares.

ENDS

Authorised by:

Rob Campbell
Chair, Tourism Holdings Limited

For further information contact:
Grant Webster
thl Chief Executive Officer
Direct Dial: +64 9 336 4255
Mobile: +64 21 449 210

About thl (www.thlonline.com)

thl is a global tourism operator. We are listed on the NZX and are the largest provider of RVs for rent and sale in Australia and New Zealand, and the second largest in North America. In the USA, we own and operate the Road Bear RV Rentals & Sales brand and El Monte RV Rentals & Sales. In the UK, thl owns 49% of Just go Motorhomes. Within New Zealand, we operate Kiwi Experience and the Discover Waitomo group, which includes Waitomo Glowworm Caves, Ruakuri Cave, Aranui Cave and The Legendary Black Water Rafting Co. thl also owns and operates Action Manufacturing, New Zealand’s largest motorhome and specialist vehicle manufacturer.

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