The Sealink Travel Group Ltd (ASX: SLK) share price has sunk 5% to $3.88 following the release of its full-year results this morning.
Here's what you need to know:
- Revenue from ordinary activities rose 13.3% to a record $200.2 million.
- Underlying EBITDA increased 12.1% to $49.4 million.
- Profit after tax from ordinary activities increase 6.7% to $23.8 million.
- Earnings per share flat at 23.6 cents.
- Final dividend of 8 cents per shares fully franked. (Full-year: 14 cents).
- Outlook: FY 2018 started ahead of expectations. Management confident of an improved result.
Overall I feel this was a bit of a mixed result and can't say I'm too surprised to see its shares drop lower today.
Although both revenue and net profit after tax were at record highs, a 6.3% increase in the number of shares outstanding disappointingly meant that SeaLink posted flat earnings on a per share basis.
The main driver of the record top line result was its Captain Cook Cruises, NSW, and WA segment. Revenue increased 34% to $51 million due largely to this being the first full-year of operation for its Captain Cook Cruises business following its acquisition during FY 2016.
Another positive was its SeaLink Queensland and NT segment. This segment posted an 11.5% lift in revenue to $82.9 million and a 6.6% increase in EBITDA to $29.2 million.
SeaLink South Australia posted a small increase in revenue to $67.5 million thanks to a record number of passengers and vehicles traveling across to Kangaroo Island. Segment EBITDA increased at an impressive rate of 14.7% due to sales of higher margin products.
Looking ahead, a number of new services will launch in FY 2018 including the Manly to Barangaroo fast ferry service. Management appears confident that this and improvements in yields and margins will lead to an improved result.
Which in my opinion is certainly something that needs to happen to regain the confidence of investors.
Should you invest?
I would suggest investors hold off an investment in SeaLink until its performance improves.
In the meantime investors may be better off gaining exposure to the tourism boom through investments in either Mantra Group Ltd (ASX: MTR) or Crown Resorts Ltd (ASX: CWN).
