Kelsian Posts 9.5% Revenue Growth, Guides FY26 EBITDA to $297-$310M
Kelsian Group reported FY25 results in line with expectations, showing revenue and earnings growth alongside a strategic review that could reshape its business focus. The company also provided FY26 EBITDA guidance and revealed plans to divest its Tourism Portfolio.
- Revenue rose 9.5% to $2.21 billion in FY25
- Underlying EBITDA increased 7.4% to $285 million
- Statutory net profit declined 6.1% due to one-off costs
- Tourism Portfolio divestment underway to focus on core transport
- FY26 EBITDA guidance set between $297 million and $310 million
Financial Performance in Line with Expectations
Kelsian Group Limited has reported a steady financial performance for the fiscal year ending June 30, 2025. The company’s revenue climbed 9.5% to $2.21 billion, supported by growth across its bus, motorcoach, and marine divisions. Underlying EBITDA, adjusted for one-off costs such as acquisition expenses and system upgrades, rose 7.4% to $285 million, aligning closely with the guidance issued last year.
Underlying EBIT also improved by 11.4% to $136 million, while underlying net profit after tax edged up 2.4% to $94.8 million. However, statutory net profit after tax fell 6.1% to $54.5 million, reflecting the impact of non-recurring costs during the period. The company’s cash flow was robust, with record net operating cash flow of $205.2 million and a strong cash conversion rate of 86.6%.
Operational Highlights and Contract Wins
Kelsian’s operational footprint remains diverse and geographically broad, with notable contract renewals and new wins in the United States and Singapore. The Bankstown rail replacement contract in Sydney, which began in September 2024, contributed solidly to results. Meanwhile, negotiations are underway for a two-year extension of Sydney’s Region 6 bus contract, reflecting ongoing confidence in Kelsian’s service delivery.
These contract successes underscore Kelsian’s strategic positioning in key markets and its ability to secure long-term revenue streams with minimal additional capital investment. The company’s reputation for operational excellence and sustainable transport solutions continues to be a competitive advantage.
Strategic Review and Tourism Portfolio Divestment
In a significant strategic move, Kelsian has initiated the sale process for its Tourism Portfolio within the Australian Marine & Tourism division. This decision follows a comprehensive capital management review aimed at streamlining operations and focusing on core transport businesses, bus, motorcoach, and marine services. The divestment is expected to reduce capital intensity and enhance earnings predictability, potentially unlocking shareholder value.
The sale process is progressing, with the company committed to keeping the market informed. This move signals a sharper focus on sustainable, lower-risk transport operations and a disciplined approach to capital allocation.
Outlook and Capital Management
Looking ahead, Kelsian has provided FY26 guidance for underlying EBITDA between $297 million and $310 million, assuming stable economic and trading conditions. The company is targeting a further reduction in leverage to between 2.0 and 2.5 times underlying EBITDA by June 2026, supported by strong cash flow and the near completion of its peak capital investment program.
CEO Graeme Legh emphasized confidence in delivering sustainable long-term shareholder value through disciplined growth and capital management. The company’s strengthened balance sheet and clear strategic priorities position it well to navigate ongoing inflationary pressures and market uncertainties.
Bottom Line?
As Kelsian sharpens its focus on core transport services and advances its Tourism Portfolio divestment, investors will watch closely for how these moves translate into future growth and value.
Questions in the middle?
- How will the Tourism Portfolio divestment impact Kelsian’s earnings and capital structure?
- What are the prospects and risks around the Sydney Region 6 contract extension?
- How might inflation and economic conditions affect FY26 performance and guidance?
