Tourism Stock Watch

I always value the insights that can be gained from the timely reporting requirements of ASX listed companies. We into the final weeks of reporting season and almost anything related to tourism is trading well below previous highs which were typically around 2017/2018. Most have revised profit guidance before results scheduled by August 30. Some to watch?

Experience Co (EXP) is the one of most interest as it is heavily weighted to it’s Cairns businesses which are primarily responsible for the previous profit downgrade in May:

FY19 total passenger numbers ex-Cairns to the Great Barrier Reef are projected to be more than 12% down on prior year with EXP Great Barrier reef volumes expected to be down circa 8% over the corresponding period.

In our FNQ skydiving operation we have revised volume expectations down by approximately 4,000 (circa 20%) tandem jumps for 2H19, the decrease being predominately in the April to June period.

Experience is scheduled to report on Friday, August 30th. This is the last day to report which is typically regarded as a negative indicator and also being a Friday likely to be a day when some interesting corporate garbage is tossed out after the market closes. However, understandable as there have been some sweeping management changes with new CEO (ex GM Tourism Australia) only arrived at the end of July while Bob East (ex Mantra CEO) reverts from an interim executive role to Chairman. These two have substantial reputations to defend and a results conference call is scheduled in at 10 am.

Reef Casino (RCT) results will be signed off at a board meeting this Friday so we can possibly expect the Friday PR dump. The result is baked in. What to watch for is commentary on trading conditions post June 30 as an uptick in June was previously indicated. Also any detail or commentary on EGM’s where they appear to have been losing local share to pubs and clubs pokies.

There are a couple not so specifically Cairns related worth keeping an eye on:

Apollo Tourism & Leisure (ATL) Yes, this is the campervan people with operations also in the USA and Europe. Most recent guidance for Australia:

The rental performance for the last two months of the financial year in Australia and New Zealand is now expected to be lower than previously forecast, due to softness in late booking revenues, and, in New Zealand, higher than expected operating costs. Forward bookings for both regions into FY20 is in line with pcp and expectations.

This market seems to have exploded exponentially over the past decade so something to watch particularly as the late booking revenues is leading into FNQ peak season. It still seemed to me like the campervan battalions were more prevalent than ever this year, again.

Sealink (SLK) is an interesting group with ferry and tourism operations to Kangaroo Island and Fraser Island. It was though the Sydney Harbour cruise business which most triggered updated guidance:

During the second half, the Company has experienced softer than expected trading conditions in Sydney and Perth markets, similarly in line with other tourism operators. The Company believes the trading conditions have been impacted by slower growth in inbound international tourism and a subdued overall domestic travel market due to the uncertainty surrounding the May 2019 Federal election.

The Company has seen early signs of an improved trading environment, with the performance of its dining and sightseeing operations on Sydney Harbour during the Vivid Festival tracking ahead of last year.

Sealink also provides ferry services from Townsville to Maggie Island with commentary on the previous half year to December 2018:

Sales growth from Townsville operations driven by Magnetic Island backpacker/adventure

Most interest though will be on that Experience Co result and conference call on August 30.



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