Caravan maker Fleetwood cuts earnings forecast; shares drop 20pc
Link copied to
Caravan holidays seem to be waning in popularity — and ASX-listed manufacturer Fleetwood is taking a hit.
Australians undertook about 12 million caravan and camping overnight trips in the year to March 2017 — a decline of 1.1 per cent.
Caravan trips are most popular with 30-to-54 year olds — accounting for about half the market. That’s followed by those aged 55 years and over (30 per cent) and 20-to-29 year olds (16 per cent).
Fleetwood (ASX:FWD) — which was founded in 1964 and makes caravans, recreational vehicles (RVs) as well as affordable housing — updated its earnings forecast to $1.5 million for the half — a total of $5.5 million for the 2018 financial year.
That’s down from an earlier outlook of more than $14.7 million.
The shares were down more than 20 per cent at $1.80 by 11am AEST Tuesday.
The downgrade was largely due to ongoing losses in caravan manufacturing and modular accommodation.
The latest downgrade was foreshadowed earlier this year, when Fleetwood advised shareholders that consumer demand had fallen and caravans were being heavily discounted.
“The Board acknowledges that a resolution of shareholder dissatisfaction with the performance of the RV business is required,” it told the market.
“The Board considers the expected losses of the RV business for the second half to be unacceptable and is dissatisfied with the expected performance.”
“The Company has previously announced it was considering all structural and corporate alternatives for the
RV business. This process is the Board’s top priority and will be resolved in the coming months.”