Kelsian Group (ASX: KLS) is setting its sights on a more streamlined, infrastructure-like business model, announcing plans to explore divestment options for its Australian Tourism Portfolio. The move aims to reduce debt, enhance shareholder value, and reinforce Kelsian’s position as a leader in essential transport services.
What’s on the Table?
The Tourism Portfolio under review includes a collection of well-known tourism assets, such as:
- K’gari (Fraser Island) resorts, tours, and ferry services
- SeaLink Sydney Harbour, including Captain Cook Cruises
- Murray Princess, Adelaide Sightseeing
- SeaLink operations in WA, Whitsundays, Tasmania, and NT
Collectively, these assets generated over $160 million in revenue in FY24. However, Kelsian believes they no longer fit within its long-term strategic vision.
Why the Shift?
Kelsian is doubling down on its marine, bus, and motorcoach transport businesses, which are less volatile and backed by long-term government contracts. Shedding its tourism operations will help:
- Reduce capital intensity and improve financial stability
- Lower debt, freeing up capital for core transport investments
- Enhance earnings predictability by focusing on contracted transport services
Chair Fiona Hele explained:
“The divestment will position Kelsian as a more predictable, infrastructure-like business. Our transport services are underpinned by long-term government-backed contracts, ensuring more stable earnings and cash flow.”
What Happens Next?
Kelsian has engaged Gresham Advisory Partners and Macquarie Capital to assist with the potential sale. While there’s no guarantee of a deal, any divestment must align with Kelsian’s Capital Management and Allocation Framework—meaning proceeds will go towards debt reduction and selective reinvestment in growth opportunities.
The company has reassured stakeholders that FY25 earnings guidance remains unchanged. Updates will be provided as the divestment process unfolds.
