The Experience Co Ltd (ASX: EXP) share price remains unchanged in trading today after the ASX tourism and leisure company released its half-year results to the market this morning.
Experience Co is a provider of adventure tourism and leisure experiences in Australia and New Zealand. These experiences include tandem skydiving, Great Barrier Reef (GBR) snorkeling, helicopter rides, diving tours, and hot air ballooning.
What did Experience Co announce?
For the half-year ending 31 December 2019, Experience Co reported revenue from continuing operations of $60.3 million. This represented a 12.2% decline from $68.6 million reported in the prior corresponding period (pcp) of 1H19.
The company recorded a statutory net loss after tax of $7.1 million, which included non-cash impairment of $8 million. This compares to the $7.4 million profit Experience Co recorded in the first half of FY19.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) from continuing operations came in at $9.1 million, down from $15 million in the pcp. Experience Co noted that this result reflects volume decreases across its Skydiving and GBR Experiences divisions.
Results by division
Skydiving volume slumped 9.3% to 84,085 during the period, down from to 92,748 in the pcp. Weather conditions and smoke haze from bushfires impacted the company's operations in the area from Byron Bay to Great Ocean Road, as well as its operations in Queenstown, New Zealand.
Experience Co's GBR Experiences division reported that earnings in 1H20 were impacted by a cyclical downturn in the Tropical North Queensland tourism market. As a result, Cairns airport arrivals down were down by 3.3% compared to the prior period.
On a more positive note, Experience Co reported an improvement in its balance sheet, with pro forma net debt coming in at $7.3 million as at 31 December 2019. This result was linked to the company's divestment of Great Barrier Reef Helicopters as well as the continuation of non-core asset sales.
Outlook and strategy for the remainder of FY20
During the remainder of the second half of FY20, Experience Co will make changes to its business to provide a foundation for improved performance in FY21 and coming years. This will include additional simplification of its business and the further divestment of non-core assets. Experience Co will also be deploying any sales proceeds it receives to further pay down debt.
However, Experience Co anticipates that bushfires and the coronavirus will adversely impact its financial results for 2H20. The company commented that it will continue to monitor ongoing developments in this regard, and remain proactive in mitigating the impact it could potentially have on any of its key markets and operations.
