Home » News » John O’Sullivan’s Experience Co. posts dour quarterly results, notes “urgent necessity” of strategic review

11 November, 2019

John O’Sullivan’s Experience Co. posts dour quarterly results, notes “urgent necessity” of strategic review

By Travel Weekly

Experience Co. is hoping to turn around its current fortunes very quickly, after it revealed declining figures for the first quarter of the 2020 financial year.

In a trading update issued late last week, the ASX-listed group said its skydiving business continues to demonstrate robust demand, but tandem jump volume was down 10.4 per cent in the Q1 compared to the prior corresponding period.

Experience Co. blamed the decline largely on weather-impacted days, which were up approximately 30 per cent, and added that revenue has declined in line with the reduction in volume.

The group noted that challenging trading conditions in Far North Queensland detailed in its FY19 results announcement have continued.

Quarterly revenue was down by approximately 21 per cent, with market conditions driving a decrease in volume of more than 10 per cent in passengers across Experience Co.’s reef-based products, adverse movements in passenger and product mix, and the impact of the discontinuation of a key GBR customer contract from April 2019.

The group said these trends are expected to continue through the remainder of the first half of FY20.

Experience Co. acknowledged that its current trading performance underlines the “urgent necessity” for the strategic review of all assets and operations currently being undertaken by new CEO John O’Sullivan, who joined the company in late July from Tourism Australia.

“Completion of this review is the board’s immediate priority in order to properly identify and appropriately address significant underlying issues,” the company said in a statement.

“Pleasingly, management renewal is largely complete and a refresh of the board announced. An update on the outcome of the strategic review will be provided at the company’s annual general meeting (AGM) on 20 November 2019.”

Experience Co.’s board refresh has seen Kathryn O’Brien become its first chief revenue officer, Joe Stein appointed general manager of Skydive Australia, and Adam Jones, named the new GM of its Great Barrier Reef and North Queensland operations.

The company said it was confident that, under new leadership and completion of the strategic review which aims to rationalise operations and reduce costs, the current decline in trading performance can be addressed.

“Our balance sheet remains sound with net assets of $130.9 million at the end of Q1,” it said.

“However, if current trading conditions continue, we expect a decline in year-on-year earnings.

“The company will be in a position to provide a further update at the AGM when it presents the outcome of the strategic review. We expect the remainder of FY20 will be a period of re-setting the business for improved performance in FY21.

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