Kelsian Group Limited (ASX:KLS) Announces Intention to Divest Australian Tourism Assets
Portfolio Review
Kelsian Group Limited (ASX:KLS) announced its intention to divest a portfolio of Australian tourism assets, aiming to streamline the business, reduce debt, and improve shareholder value. The Tourism Portfolio includes K’gari resorts, SeaLink Sydney Harbour, Murray Princess, Adelaide Sightseeing, SeaLink Western Australia, SeaLink Whitsundays, SeaLink Tasmania, and SeaLink Northern Territory, collectively generating over $160 million in revenue for FY24.
Strategic Rationale
Kelsian’s strategic review determined that selling the Tourism Portfolio could unlock significant shareholder value. The divestment will allow Kelsian to focus on its marine, bus, and motorcoach transport businesses, decreasing capital intensity and enhancing the earnings stability. Proceeds will be used to reduce debt and selectively invest in growth opportunities aligned with the company’s strategy.
Next Steps
Kelsian has engaged Gresham Advisory Partners and Macquarie Capital (Australia) Limited to assist with the divestment. The company will keep the market informed on material developments as the process progresses. FY25 EBITDA earnings guidance remains unchanged.
Executive Comments
Kelsian Chair, Fiona Hele, stated: “The management team has undertaken a comprehensive strategic portfolio review, and a sale of the Tourism Portfolio was assessed to be in the best interests of shareholders.
“The divestment of the Tourism Portfolio will see Kelsian emerge as a more infrastructure like, commuter and contracted business, allowing us to focus on delivering essential journeys through marine, bus and motorcoach transport. Many of the continuing businesses are underpinned by defensive long-term government-backed service contracts, with cost base protection, generating even more predictable earnings and cashflows.
“The Tourism Portfolio to be divested includes several market leading tourism centred businesses with established market positions and robust growth potential. We believe this is an appropriate time to consider their ownership and explore opportunities for these businesses to continue to grow with a new owner,” she said.
Motley Fool contributor Lianne Eastty has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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