Experience Co chief executive John O’Sullivan has launched new day trips for its high-performing marine division.
Diversified adventure tourism company Experience Co has ordered an urgent review into its Australian skydiving operations but said its New Zealand skydiving division was performing well, along with its Cairns and Port Douglas marine businesses.
The company reported a less than stellar six months, blaming a lack of international tourists, high living costs and Cyclone Koji on its financial results.
“We are just reviewing Skydive Australia, it is currently not meeting its cost of capital and we need to urgently review it,” said Experience Co chief executive John O’Sullivan, who was previously head of Tourism Australia, the federal government’s key tourism marketing body.
“We need to review the operating sites. Australian skydiving has not returned at the same velocity as some of our other divisions coming out of Covid, partly because Chinese travellers are not (fully) back.”
For the six months to December 31, Experience Co reported an unaudited underlying EBITDA of $2.5m, down from $3.7m for its January operations. It is carrying net debt of $13.3m, up from $10.9m last June.
Experience Co chief executive John O’Sullivan casts off the bow line of the Aquarius II ahead of the vessel’s maiden voyage.
After a review of its Wild Bush Luxury division last year, Experience Co sold it to Intrepid for $5.1m. The Wild Bush Luxury division had included Luxury Lodges in South Australia’s Flinders Ranges and a safari-style property near Kakadu in the Northern Territory, which is popular with cashed-up American tourists.
Mr O’Sullivan said Experience Co’s marine division, with nine large vessels and a pontoon, and New Zealand Skydive operations were Experience Co’s best performers followed by its Treetops division.
“We would look at other marine opportunities outside of Cairns and Port Douglas,” said Mr O’Sullivan, adding that he had added new dimensions to the marine business, including whale watching charters and two island day-trip tours.
But he said he would watch the geopolitical climate going forward in light of the Middle East war.
Experience Co launches new Cairns tourism product called Reef Indulgence.
“Markets like Japan and the United States are very sensitive to shocks,” he said.
Core division Treetops was hit by its inability to re-sign its lease on its Newcastle site, which has dragged down volumes.
“We lost the tender for Newcastle and were very disappointed but in terms of Newcastle’s overall earnings for the group it had an immaterial impact,” Mr O’Sullivan said.
Experience Co reported a “challenging start” to the second half, with its January performance down on the previous year while its February performance has been affected by further industrial action to its Skydive Australia operations.
Experience Co’s board blamed Australia’s ongoing macro economic conditions and the patchy return of international tourists, saying “earnings recovery will take longer than originally expected”.
Not all shareholders were happy with Experience Co’s financial results.
“I welcome a strategic review and it would be positive if Skydive Australia was sold,” said David Kingston, one of Experience Co’s major shareholders. “Skydive Australia … would probably be better off run in the private domain.” Mr Kingston cited the recent $160m sale of Kelsian (SeaLink) assets, including K’Gari Beach Resort on Fraser Island (K’Gari) in Queensland, to Journey Beyond.