Wild Bush Luxury Impairment Highlights Risks Despite Experience Co’s Growth
Experience Co Limited reports a robust FY25 with revenue growth and a significant jump in earnings, driven by a tourism rebound in Australia and New Zealand.
- Revenue rises 6% to $134.3 million
- Underlying EBITDA jumps 34% to $19.3 million
- Net profit after tax turns positive at $2.1 million
- Goodwill impairment of $3.1 million on Wild Bush Luxury
- On-market share buy-back launched, dividend declared
Strong Financial Recovery
Experience Co Limited (ASX, EXP) has delivered a compelling FY25 performance, reporting a 6% increase in revenue to $134.3 million and a striking 34% rise in underlying EBITDA to $19.3 million. This marks the company’s strongest trading volumes and financial results since FY19, underscoring a solid recovery in the adventure tourism sector.
The net profit after tax before goodwill impairment swung into positive territory at $2.1 million, compared to a slight loss the previous year. Operating cash flows surged 53% to $17.6 million, reflecting improved operational efficiency and stronger demand.
Tourism Tailwinds and Segment Growth
Experience Co’s growth was fueled by improved trading conditions in both Australia and New Zealand, benefiting from increased international visitation and a rebound in domestic holiday travel. Both the Skydiving and Adventure Experiences segments contributed to the uplift, with management highlighting strong trading during key holiday months despite some weather disruptions.
Strategic investments in organic growth projects also played a role. The company expanded its Canberra Treetops Adventure park and acquired a new vessel, Aquarius II, for the Great Barrier Reef operations, signaling confidence in sustained tourism demand.
Challenges and Strategic Responses
Despite the positive momentum, Experience Co recognised a $3.1 million goodwill impairment related to its Wild Bush Luxury segment. This reflects ongoing challenges in the luxury travel market, impacted by elevated domestic outbound travel and higher airfares to key access points such as Darwin.
In response, management has launched an on-market share buy-back program, acquiring over 1.3 million shares by the end of June 2025, and declared a fully franked dividend of 0.25 cents per share. These moves demonstrate a commitment to returning value to shareholders while maintaining financial discipline.
Outlook and Strategic Focus
Looking ahead, Experience Co remains optimistic about capitalising on ongoing improvements in tourism and recent interest rate cuts that may boost consumer confidence. Early FY26 trading data shows continued positive trends, although weather remains a variable factor.
Management plans to maintain its focus on cost efficiency, free cash flow generation, and organic growth initiatives, including further expansion of Treetops Adventure locations and enhancements to the Great Barrier Reef vessel fleet. These priorities align with the company’s broader strategy to strengthen its market position amid evolving travel dynamics.
Bottom Line?
Experience Co’s FY25 results signal a strong rebound, but watch for how it navigates luxury segment headwinds and weather risks.
Questions in the middle?
- How will the Wild Bush Luxury impairment affect long-term segment strategy?
- What impact will the share buy-back have on capital structure and investor returns?
- Can Experience Co sustain growth amid potential tourism fluctuations and weather disruptions?