Tourism Holdings Limited (THL) is exiting from its technology joint venture Togo Group.
The tourism, campervan rental and sales company says this is to focus on its New Zealand and Australian digital strategy which is more closely aligned with THL’s core RV rentals business.
The company launched its first edition Togo mobile app in September 2018 with initial capabilities including the ability to track maintenance, keep service records and contacts handy, as well as set custom notifications and access helpful travel checklists.
Eventually, the app was aiming to offer trip planning, campsite booking, roadside assistance and more.
In March, THL reported net profit of NZ$13.1 million for the FY20 first half to December 31, down 25% compared to the $17.5m profit posted in the same period the previous year.
It said results were impacted by a weak US vehicle sales market and ongoing investment in Togo Group.
The exit agreement involves THL retaining rights to assets in Togo Fleet (fleet management and booking system), Mighway in New Zealand and Australia (peer-to-peer RV rentals platform) and Togo.
The company will receive a US$6 million payment from Togo’s other joint venture partner, Thor Industries.
THL has no obligation to provide further investment into Togo and Thor has a four-year option to purchase THL’s remaining interest in Togo for around US$20 million. Togo will make a fixed annual dividend payment to THL of approximately USD$600,000 for a maximum four year period.
THL chief executive Grant Webster says “we believe that there remains substantial opportunity with Togo Group and our relationship with our joint venture partner Thor remains very strong”.
“This realignment of Togo Group allows both THL and Thor to shift their digital strategies to become more aligned with their respective businesses and allows both to focus on their respective balance sheet strengths,” Webster says.
