Experience Co readies to take the plunge on acquisitions
Adrenaline hungry international tourists are expected to further boost the coffers of Experience Co, whose share price which is performing better than pre-Covid-19, positioning the company to look at further acquisitions.
Experience Co managing director John O’Sullivan said tourist spending particularly on skydiving was up significantly across Far North Queensland and New Zealand’s ski hub of Queenstown with volume recovery continuing in earnest.
As well as running skydiving sessions, the ASX-listed company also operates reef tours and owns leisure accommodation businesses.
“In Australia, despite the absence of a strong return of high yield international visitors, revenue per (skydiving) passenger increased to around $470 at the end of the period (compared) to pre-pandemic $390,” according to Experience Co’s third quarter trading update.
Experience Co is actively marketing in China, which has a large appetite for skydiving, and its distribution partners are expecting China volumes to rebuild heading into Golden Week come October.
Apart from Chinese tourists, skydiving is also particularly attractive to British, French and German tourists as well as backpackers while Experience Co’s Great Barrier Reef tours draw Chinese, Japanese, British and Americans.
Mr O’Sullivan said the company’s skydiving activities were performing at around 50 per cent pre-pandemic activity, while its Great Barrier Reef boat tours were at 70-80 per cent of pre-pandemic performances.
But it has not been easy with Mr O’Sullivan, previously head of Tourism Australia, copping the double whammy of the bushfires and Covid within months of taking on the Experience Co chief executive role.
“There were a few sort of moments where you take a deep breath and think what is coming next when the share price dropped down to 3.5 cents on March 27, 2022. (But) we always knew we had a good balance sheet.”
These days the share price ranges between 27c to 29c, while just before Covid-19 it was around 23c.
“We had to close the business down and stand down 1000 workers, that was a big thing to have to do.” Mr O’Sullivan said. “I had to deal with the bushfires and deal with Covid. We had 1200 workers, we had to stand down 1000 staff. That was a big thing on the general managers in regional places like Mission Beach and Queenstown.”
These days, Experience Co’s treetops business is more aimed at the domestic market, while the company’s The Maria Island Walk in Tasmania is aimed at domestic visitors. In the Top End, Bamurru Plains is geared towards international visitors.
“We are a business really leveraged to the international recovery.
“During the 2025 financial year we expect the business should be able to make $40m in earnings provided the international recovery plays out the way we expect it to,” Mr O’Sullivan said, adding the company was building a pipeline of acquisitions.
“The focus at the moment is international recovery back to 2019 levels.”
Asked about the return of the workforce in an industry historically bedevilled by sourcing enough staff, Mr O’Sullivan said the company had been intensely involved in recruitment and had been able to increase capacity of operations with less staff.
He would not be drawn on the amount of money he would spend on more acquisitions.