The Experience Co Ltd (ASX: EXP) share price has come under pressure following the release of a trading update.
In morning trade the adventure tourism company's shares are down a sizeable 15% to 22 cents.
What did Experience Co announce?
This morning Experience Co provided an update on its performance during the first quarter of FY 2020. According to the release, the company's performance has once again been impacted by unfavourable weather conditions.
As a result, its Skydiving business has experienced a 10.4% decline in tandem jump volumes during the first quarter. Which isn't necessarily a bad outcome considering the number of days impacted by weather. This rose 30% on the prior corresponding period.
Also underperforming was its Adventure Experiences business. Revenue for the first quarter was down 21% on the prior corresponding period.
Challenging trading conditions in Far North Queensland, a 10% decline in passengers across its reef-based products, adverse movements in passenger and product mix, and the impact of the discontinuation of a key GBR customer contract have weighed on its performance.
Unfortunately, management expects these trends to continue for the remainder of the half.
In response to this underperformance, the company is busy undertaking a major strategic review of all of its operations. It expects to provide an update on the review at its annual general meeting later this month.
Experience Co is scheduled to hold its meeting on the morning of November 20 in Sydney.
Outlook.
Management warned that if the challenging trading conditions persist, it expects to post a decline in earnings in FY 2020.
As with its strategic review, it intends to provide a further update at its annual general meeting this month. In the meantime, it is focusing on limiting the impact by cutting costs and re-setting the business for improved performance in FY 2021.
