The publicly-listed transport and leisure specialist Kelsian Group will divest its tourism assets following a lengthy review.
In an ASX announcement this morning (2 April) the company’s board said that following a thorough evaluation, Kelsian had decided that a sale of the Tourism Portfolio “had the potential to release significant value for shareholders.
“The Board believes that streamlining the Australian portfolio will allow the business to focus more on its marine, bus and motorcoach transport businesses while lowering capital intensity and further increasing the stability of the Group’s earnings base,” it said.
Earmarked for potential divestment are K’gari (Fraser Island) resorts, tours and ferry (including Kingfisher Bay Resort, K’gari Beach Resort and K’gari Explorer Tours); SeaLink Sydney Harbour (including Captain Cook Cruises, The Jackson and The Starship Group); Murray Princess; Adelaide Sightseeing; SeaLink Western Australia (including Captain Cook Cruises, SeaLink Rottnest Island and Swan Valley Tours, but excluding the Transperth ferry); SeaLink Whitsundays (including Red Cat Adventure tours); SeaLink Tasmania, and SeaLink Northern Territory. [Kelsian is an anagram of SeaLink.]
Collectively, the Tourism Portfolio generated over $160 million of Kelsian’s FY24 Group revenue. Kelsian will only proceed with a potential transaction(s) for a sale if value and terms are attractive and determined to be in the best interests of shareholders, the ASX statement said.
Proceeds will be used in the reduction of debt and selectively invest in attractive strategic growth investments (organic and inorganic) within Kelsian’s marine, bus and motorcoach transport businesses.
Kelsian Chair, Fiona Hele said: “The divestment of the Tourism Portfolio will see Kelsian emerge as a more infrastructure like, commuter and contracted business. 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.
Should the Tourism Portfolio be divested at value and terms acceptable to Kelsian, the Marine segment would then comprise Kelsian’s SeaLink Kangaroo Island ferry service, Gladstone Ferries, SeaLink South East Queensland (North Stradbroke Island, Southern Moreton Bay Islands and Moggill cross river ferry services), SeaLink North Queensland (Townsville ferry services to Kelsian Magnetic Island and Palm Island operations), Transperth ferry services, and Brisbane River City Ferries; all of which have greater similarity to the infrastructure like characteristics of the public bus and motorcoach passenger service businesses in both the Australian and International bus segments which are less sensitive to economic conditions.
Kelsian has appointed financial advisers Gresham Advisory Partners and Macquarie Capital (Australia) Limited to assist with the proposed divestment.
