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Kelsian (ASX:KLS) has seen shares rise 4.3% in Wednesday morning trades as the company moves to divest its Australian tourism portfolio to better deliver value.
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Generating $160M of revenue in FY24, the bulk of Kelsian’s divestment includes SeaLink ferries services in most Australian States and Territories.
Captain Cook Cruises in multiple states and the SeaLink service running atop Sydney Harbour are among those to be divested; notably, the company is set to retain its WA-based Transperth ferry services.
(That may or may not be because that State’s ferry system is to be expanded by the government.)
All in all, investors are clearly appreciative of the move.
That’s probably because Kelsian’s 1Y chart looks like a downward slope, with returns over that period down more than -50%.
But whether the stock does go ahead with its move to effectively sell SeaLink across Australia depends on what it can get for the trouble.
“Kelsian will only proceed with a potential transaction(s) for a sale of the Tourism Portfolio if value and terms are attractive and determined to be in the best interests of shareholders,” Kelsian wrote.
But commentary from chair Fiona Hele sounded more decisive in nature – especially given she pointed out the gov’t support many SeaLink services enjoy, allowing the company to take firmer financial projections to interested buyers.
“The divestment of the Tourism Portfolio will see Kelsian emerge as a more infrastructure like, commuter and contracted business, allowing us to focus on delivering essential journeys through marine, bus and motorcoach transport,” Hele wrote.
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“Many of the continuing businesses are underpinned by defensive long-term government-backed service contracts with cost base protection.”
KLS last traded at $2.68/sh.
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