The market may be sinking lower but that hasn't stopped the SeaLink Travel Group Ltd (ASX: SLK) share price from racing to a record high today.
In afternoon trade the travel and transport company's shares are up 14% to $8.03.
At one stage, the SeaLink share price was up as much as 17% to $8.25
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Why is the SeaLink share price racing higher today?
Investors have been buying SeaLink shares today following the release of an impressive half year result.
For the six months ended 31 December, the company reported record revenue of $570.8 million. This was up a massive 329.5% on prior corresponding period.
A key driver of this growth was the transformational acquisition of the Transit Systems Group. That $635 million acquisition completed in January 2020 and therefore wasn't included in the prior corresponding period.
On the bottom line, SeaLink delivered a 231.9% increase in underlying net profit after tax and before amortisation to $48.1 million.
However, due to the dilution caused by its capital raising, the company's earnings per share grew by a slower (but rapid) rate of 100% to 14.6 cents.
This allowed the SeaLink board to declare a fully franked interim dividend of 7 cents per share, which is up 7.7% on the prior corresponding period.
Management commentary
SeaLink's CEO, Clint Feuerherdt, feels that this result demonstrates the strength and resilience of the business through diversification.
He commented: "We were able to successfully navigate our way through this period by working closely with our state government clients, staff and customers. It was pleasing that all Australian bus operations and services continued at full scheduled timetables in all states during the period and this is reflected in the trading results."
Mr Feuerherdt revealed that it was a similar story in the UK market. Pleasingly, the lockdown has not impacted its services.
"In London, the six-month period has been dominated by the context created by the continuing effects of COVID-19 in the United Kingdom, which ended the half-year with another national lockdown as a new strain of the virus emerged. Despite this, services continue to operate and operational performance is being maintained."
Outlook
While trading conditions remain challenging, management appears optimistic on the company's prospects.
It said: "The future outlook for SeaLink is bright with our solid base of diversified businesses across Australia in the public bus, light rail and marine transport, tourism and accommodation sectors."
It also notes that "some of the structural cost base changes and scheduling efficiencies that were pursued through the first COVID-19 impact period will remain and be an ongoing benefit to the business."
Finally, SeaLink isn't ruling out further acquisitions in the future.
It concluded: "We continue to review and pursue opportunities that enhance, leverage and complement our core strengths. Mergers and acquisition activity is a possibility as markets are constantly being evaluated."
No guidance has been given for the full year but current trading results are slightly ahead of expectations.
