KLS - Kelsian Group

[System]

Sealink Travel Group is an established, geographically diversified tourism and transport company which provides services in two diverse industries being the Transport Industry, moving regular commuters and freight between travel destinations, and also the Tourism Industry, promoting and packaging holiday destinations, providing tours and delivering tourists to travel destinations.

The company currently has operations across three states and the Northern Territory operating under the well-recognised brands in "SeaLink" and "Captain Cook Cruises".

http://www.sealinktravelgroup.com.au

 

[So_Cynical]

Bell Potter has released a Broker report on Sealink ~ PDF format 21 pages.

 

[bigdog]

Sealink's chart looks great for holders +29% since October 8 2019 announcements

840

 

[Dona Ferentes]

and down. No tourists, no travel, the bus network with its govt contracts may hold it up a bit.

 

[Dona Ferentes]

@finicky posted in the FLT thread, that SeaLink shareprice has recovered. And, indeed, this is true.

I see they picked up a bunch of bus routes in Singapore,

SeaLink’s subsidiary, Tower Transit Singapore, [will see] a doubling of the scale of our operations in Singapore in terms of the number of routes, staff, buses, facilities and revenue..

and Transit Systems is long term government contracts. That and ferry routes being 'Essential Services" to ensure continued cashflow from subsidies if not fares.

The tourism side is still flattened.

 

[Country Lad]

I see they picked up a bunch of bus routes in Singapore,

and Transit Systems is long term government contracts. That and ferry routes being 'Essential Services" to ensure continued cashflow from subsidies if not fares.

The tourism side is still flattened.

Even so, who would have thunk it would have results like this. Fortunately this one just keeps giving.

 

[Dona Ferentes]

from the May Investor Presentation

• Operations diversified by transport mode, geography, contract expiry and client base. 91% of annualised revenue now contracted or non-discretionary
• Operations diversified by transport mode, geography, contract expiry and client base
• Impact of COVID-19 continues to be well-managed, commuter transport buses and ferries to island communities continuing to operate as an essential service
• Solid first half financial performance with full period contribution from Transit Systems Group

... Australian Bus performing in line with expectations
... International Bus (London & Singapore) coming out of COVID-19 challenges
... Marine & Tourism benefiting from domestic demand

• General confidence and intention to travel improving with good domestic demand tempered by uncertainty with snap lock downs and border closures
• Extensive pipeline of opportunities to support continued organic growth of contracted businesses

back over $10 ; with the Federal Budget boost to consumer spending through tax breaks and a stimulatory budget which should trickle into other areas of the economy, supporting domestically focused travel stocks

 

[Dona Ferentes]

hanging on to the run up .... Covid must be restricting performance

KEY HIGHLIGHTS

• Record underlying NPATA of $74.7m, up 152.6% on prior year, with total revenue of $1.17bn
• Delivered strong gross operating cashflow, strengthening the asset base and balance sheet
• Margin improvement achieved through rostering efficiency, procurement and service changes
• Contract portfolio expanded with organic contract awards in all three operating divisions
• Retained the Singapore Bulim bus contract and awarded an additional contract (SembawangYishun), both 5+2 year terms commencing in May 2021 and September 2021 respectively
• Commenced the (up to) 15 year contract as operator of Brisbane City Council's iconic CityCat, CityHopper and Cross River Ferry network in November 2020
• Renewed three significant bus contracts in Adelaide from July 2020 as well as adding the Outer North bus services contract. Also commenced operations in joint venture to operate the newly franchised Adelaide tram contract. All contracts have a term of 8+2 years.
• Renewals of key strategic marine contracts in Townsville and Darwin
• Acquisition of the Go West Tours business in Western Australia opening up opportunities in the mining and resources sector
• Market leading position in zero emissions and demand responsive transport through battery electric and hydrogen powered buses.

 

[System]

On November 9th, 2021, Sealink Travel Group Limited (SLK) changed its name and ASX code to Kelsian Group Limited (KLS).

 

[entropy]

On November 9th, 2021, Sealink Travel Group Limited (SLK) changed its name and ASX code to Kelsian Group Limited (KLS).

Thanks Sys, missed that, used to own them so now I know where to look.

 

[Dona Ferentes]

After getting above $10 in 2021, Kelsian has sold down a bit and now trading around $7.20.

As in the last FY, Kelsian’s results for the half year were delivered in an environment of ongoing COVID-19 related restrictions and uncertainty. The largely contracted earnings base in the Australian Bus and International divisions provided the stability and predictability of earnings expected from a business of this nature. Marine & Tourism was negatively impacted by border restrictions, travel uncertainty and emergence of the Omicron variant over the traditionally busy summer period.

Cost base pressures are either well hedged or the business can pass these costs on to the end customer.

........... Earnings ($) ......................... ...................... >>> ................ ........... Return on Equity (%) .........

 

[finicky]

Seems to me that it is being fairly priced against historical earnings of more than 2 years back. At at median ROE of say 15% I'd estimate it as worth maybe 3x book value but that's almost what it's trading at today after two years and one half of much lower ROE performance.
After a steep, roughly 50% correction of the 'post' Covid rocket rally, its recent recovery has a weak look but it hasn't broken yet; I'm inclined to guess it will.

Not Held

All Data Monthly

 

[greggles]

Kelsian Group announces that it is not proceeding with its proposed acquisition of The Go-Ahead Group Plc. Too much market volatility since it was initially proposed and KLS has decided that it is no longer in the company's best interests.

The market thinks that it is good that the transaction will not be going ahead with the KLS share price hitting as high at $6.86 this morning. It is currently trading at $6.29, up 15.63%.

 

[Dona Ferentes]

• Net profit rose 40.1 per cent to $52.9 million for 2022,
• Revenue 12.9 per cent to $1.32 billion
• EBITDA improved 15 per cent to $185.1 million
• Declared a final dividend of 9.5¢ a share fully franked payable on October 5, up from 9¢ a share.

Kelsian faces constrained labour markets in the near-term and especially for recruiting bus drivers, until migration patterns improve, the group warned.

- I see the local buses, when returning to depot, put up a "Now Hiring" message on their display signage.

 

[finicky]

I hadn't noticed the rally in this. Looks like it could have a bit more in it? Missed the low and I will only be considering a buy if it significantly retraces this rally. Unusual consistency of weekly positive volume bars lately!

WEEKLY

 

[Dona Ferentes]

“The list of organic growth opportunities is long. Most markets around the world are liberalising and welcoming sector experts to get the most out of tax payer funds and help with the journey of decarbonisation”
- Clint Feuerherdt, CEO, Kelsian Group Ltd

 

[bk1]

Approaching an inflection point ?
Since the low of early October price action has risen with a corresponding tapering of volume ...

 

[Dona Ferentes]

As a transport provider that operates in Australia and various other countries, much of its revenue is consistent and reliable.

"The Australian, Singapore and UK operations are underpinned by long-term government contracts.

"Effectively the earnings under these contracts are inflation-protected, providing a defensive earnings stream with growth coming from new bus routes and generating efficiencies."

In the US, Kelsian's clientele is the private sector, but those earnings are also reliable with "no patronage risk borne by the company".

"With the revenue significantly contracted, recent tender wins in Sydney and the initial contribution of All Aboard America, Kelsian is well placed to deliver solid earnings growth in FY24.

"Further upside in FY25 is possible from further public bus contract wins in Australia and the UK, as well as bolt-on acquisitions in the USA."

"Kelsian's valuation is conservative in our view, on 15 times FY25 earnings and a 4% dividend yield."

- IML Small caps

 

[Dona Ferentes]

Kelsian Group Limited –
"Result reflects successful execution of our well-defined growth strategy delivering on new organic growth and strategic acquisitions, building upon our majority-contracted revenues that enjoy defensive indexation mechanisms and strong, predictable cashflow"

FY24 Half Year Results ... Key Financial Highlights
• Revenue grew by 44.9% to $982.7m reflecting acquisition of All Aboard America! Holdings, Inc., and new Sydney contracts from August 2023 and October 2023;
• Underlying EBITDA (adjusted for one-off costs associated with M&A and abnormal items) grew by 63.5% to $130.5m illustrating benefits of scale and addition of the higher margin AAAHI business. It was a pleasing result as majority of costs associated with AAAHI integration and Sydney transitions fell in the half;
• Underlying EBIT (adjusted for one-off costs associated with M&A and abnormal items) grew by 29.4% to $58.1m;
• Depreciation increased by 117.6% to $55.7m reflecting the acquisition of bus assets for Sydney contracts; resetting the asset base associated with the purchase price accounting for AAAHI, and right of use asset depreciation of $12.4m;
• Net interest expense of $25.2m compared to $9m in 1HFY23, reflecting higher interest rates on the 50% unhedged borrowings, higher borrowings to fund bus acquisitions for Sydney and USA growth opportunities before SPV was effective, and right of use asset interest of $3.7m;
• Underlying Net Profit After Tax and before Amortisation (adjusted for one-off costs associated with M&A and abnormal items), increased by 20.4% to $43.1m;
• Statutory Net Profit After Tax was $28.1 million compared to $19.5 million last year;
• Capital expenditure increased to $56.1m (excluding Government-backed contracted assets), reflecting the increased scale of business, additions to portfolio and replacement assets to underpin growth and refresh asset base;
• Fully franked interim dividend of 8.0 cents per share, (7.5 cents per share in 1HFY23).

 

[Dona Ferentes]

between November and the end of January, Kelsian stock rose more than 30 per cent.

But the gloss has come off in recent weeks, and Wednesday’s December half number showed why: UBS analyst described it “operationally in line, but disappointing miss on pretty much every line item below EBITDA” with depreciation, capital expenditure and interest expense all higher than the market anticipated.

The stock dropped more than 15 per cent on Wednesday, and the market has now wiped out the majority of gains seen in the past three months.

Chief executive Clint Feuerherdt did have some bad luck in the form of bad weather during the period, and emphasised that Kelsian is in a transformative year of investment, which has pushed capex and depreciation higher. There should also be a second-half skew to earnings in both the Australian and US bus businesses.

Two interesting labour force titbits stood out. First, worker shortages have eased due to a softening of labour markets and extensive recruiting by Kelsian. Second, the company is now self-insuring for workers compensation in NSW in a bid to reduce costs