Markets wrap: Wary investors push down Tourism Holdings 9.4%

Campervan company Tourism Holdings had its biggest one-day decline in several years after warning it may not meet its profit guidance.

Tourism Holdings managing director Grant Webster told an investor day on Tuesday that there was “some risk” in meeting the company’s guidance for annual profit of more than $48 million if vehicle sales deliveries were delayed into next financial year. He didn’t change the guidance.

Despite macroeconomic challenges, the travel and tourism industry had remained resilient and was experiencing strong growth, he said.

Still, he said deteriorating macroeconomic conditions may influence travel trends in favour of lower-cost destinations over the short to medium-term.

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Shares in the company dropped 9.4% to $3.85. Tourism Holdings was the second-most traded stock with 2.8 million shares changing hands, suggesting institutional trading.

“That’s quite a significant pullback in share price today,” said Peter McIntyre, an investment adviser at Craigs Investment Partners.

“There’s a little bit of indecision with regards to how confident they are in making the targets and that was enough to create this little bit of a sell off.”

The share price had increased ahead of the investor day as investors anticipated a potential upgrade to the profit forecast, he said. Tourism Holdings has gained 40% over the past year as tourism rebounded following the Covid-19 pandemic.

The benchmark S&P/NZX 50 Index slipped 0.4%, or 52.877 points, to 11,889.61 on Tuesday. On the broader market 41 stocks rose and 84 fell with $131m shares traded.

My Food Bag touched a record low 18.6 cents and closed down 0.5% at 19c, amid concerns the meal kit delivery service would underperform in a weaker economic environment.

“It has struggled, there is no doubt about that,” McIntyre said. “They’re still marketing aggressively, but I think there is just general concern about where that business is heading.”

McIntyre noted that rising interest rates meant investors were favouring investments with secure earnings.

“In this environment, we’ve seen a flight to safety,” he said. “Anything that has a degree of risk to it has been sold off, in some cases very aggressively, as investors look towards more defensive type stocks rather than consumer cyclicals.”

Specialty milk marketer The a2 Milk Company announced an executive reshuffle as it looks to transform its supply chain and accelerate its path to profitability for its United States business and its Mataura Valley Milk business in Southland.

Chief executive David Bortolussi said ANZ executive general manager Kevin Bush would replace Blake Waltrip as head of the US business, with a focus on driving growth through innovation and accelerating the path to profitability in the US.

The company’s chief strategy officer Eleanor Khor would replace Bush as head of the ANZ business, adding to her existing role.

Mataura Valley Milk chief executive Bernard May has also stepped down after seven years as the company looks to accelerate the transformation of its supply chain.

The a2 Milk Company’s shares fell 2.8% to $5.60.