The fortunes of Experience Co. have changed dramatically, with the ASX-listed company falling into the red in the first half of the 2020 financial year.
After posting a $74 million profit in the first half of FY19, Experience Co. was brought back to reality in the six months to 31 December 2019 with a $7.1 million loss, which it blamed on a non-cash impairment of $8 million.
The company’s statutory earnings fell a whopping 55.8 per cent to $6.7 million, and its underlying earnings fell 39.4 per cent to $9.1 million, with the latter reflecting drops in volume across its skydiving and GBR Experiences businesses.
Experience Co.’s half-yearly revenue declined by 12.2 per cent to $60.3 million.
Underlying earnings for its skydiving business fell 16.3 per cent to $9.3 million, revenue saw a 7.3 per cent decrease to $36.3 million, and volume was down 9.3 per cent, with weather conditions and bushfires (smoke haze) impacting operations from Byron Bay to the Great Ocean Road in Australia, and into Queenstown in the New Zealand.
GBR Experiences suffered a 53.5 per cent drop in earnings to $3.2 million, impacted by cyclical downturn in the tropical North Queensland tourism market, which saw Cairns airport arrivals down by 3.3 per cent on the prior period.
Revenue for GBR Experiences fell 16.1 per cent to $22.1 million.
Experience Co. noted that it expects the recent bushfires across Australia and COVID-19 (coronavirus) outbreak to adversely impact the company’s performance for the remainder of FY20.
“The group continues to monitor ongoing developments and be proactive in mitigating the impact on our key markets and operations,” it said.
The company’s strategy remains to “reset” the business in FY20, with cost rationalisation and process improvement the focus areas for the second half.
“The strategic review initiatives have provided the group with a stronger balance sheet and improved cost control focus,” Experience Co. chairman Bob East said.
“This could not be more timely, with Australian and New Zealand tourism markets experiencing unprecedented near-term uncertainty on the back of the Australian bushfires and COVID-19”.
Experience Co. CEO John O’Sullivan said: “The first-half performance was in line with expectations, despite unfavourable weather conditions continuing to impact our skydiving operations into the second quarter.
“The Australian bushfires and the COVID-19 are catastrophic events that have directly impacted so many people, and we at Experience Co. extend well wishes to all those affected. Our management team will continue to be proactive in mitigating the impact of these events.
“With a strong balance sheet, we remain committed to executing the reset of the business heading into FY21.”
Featured image: Facebook/Skydive Australia