Experience Co Limited reports a modest half-year revenue increase despite challenges in Q2, driven by strong Reef Unlimited and Skydive New Zealand performances offsetting softness elsewhere.
- Half-year revenue and underlying EBITDA slightly up on prior year
- Skydive Australia hit by industrial action and weather, dragging segment performance
- Reef Unlimited and Skydive New Zealand deliver solid growth
- Wild Bush Luxury sale to Intrepid Travel announced, completion expected Q3 FY26
- Ongoing cost reduction initiatives and on-market share buy-back continue
Steady Half-Year Growth Amid Challenging Q2
Experience Co Limited (ASX – EXP) has released its preliminary trading update for the second quarter of fiscal 2026, revealing a nuanced performance across its adventure tourism portfolio. Despite a softer trading environment in Q2, the company managed to edge its half-year revenue and underlying EBITDA slightly above the prior corresponding period, signalling resilience in a sector often at the mercy of external factors.
The overall group revenue for the half-year ended 31 December 2025 rose modestly by 1%, with underlying EBITDA also showing a marginal increase. This outcome is notable given the headwinds faced, particularly in the Australian skydiving segment, where industrial action and adverse weather conditions took a toll.
Segment Performances – Contrasts Across the Board
The company’s adventure experiences division saw mixed results. Reef Unlimited stood out with a 7% revenue increase, buoyed by a 6% rise in customer volumes and a slight uptick in average revenue per customer. This growth was somewhat tempered by the impact of Tropical Cyclone Koji in January, which caused significant operational disruptions.
Conversely, Treetops Adventure experienced a 5% revenue decline, largely due to softer trading conditions in key Australian states such as Victoria and New South Wales. Despite this, the segment managed to grow average revenue per customer by 2%, supported by ancillary offerings like new attractions and food and beverage services.
Skydiving operations presented a tale of two markets. Skydive New Zealand delivered a robust performance with revenue and volumes increasing by 10% and 11% respectively, helped by improved photo and video sales and strong booking momentum even during traditionally challenging weather periods. In contrast, Skydive Australia’s revenue and volumes fell by 6% and 10%, respectively, impacted by two days of protected industrial action coinciding with the critical Christmas/New Year sales period, alongside broader macroeconomic pressures and weather disruptions.
Strategic Moves – Cost Controls, Share Buy-Back, and Divestment
In response to margin pressures, Experience Co has intensified its cost-out programs, aiming to mitigate the effects of tactical pricing and promotional campaigns used to stimulate sales volumes. The company also continued its on-market share buy-back, having repurchased approximately 2.79 million shares, representing 0.37% of issued capital, at an average price of $0.1189 by the end of December.
A significant strategic development was the announcement of the sale of the Wild Bush Luxury business unit to Intrepid Travel for AUD 5.1 million, with completion targeted for the third quarter of FY26. This divestment aligns with Experience Co’s focus on its core adventure tourism operations and is expected to streamline the group’s portfolio.
Weather and Market Conditions – Ongoing Challenges
January trading has been notably affected by severe weather events across Australia and New Zealand, with Reef Unlimited particularly hard hit due to nine lost operational days at the Reef Magic Pontoon caused by Tropical Cyclone Koji. These disruptions underscore the vulnerability of outdoor adventure businesses to environmental factors, which remain a key risk for Experience Co’s near-term outlook.
Looking ahead, the company’s ability to navigate industrial relations challenges, weather volatility, and competitive pressures will be critical. The upcoming completion of the Wild Bush Luxury sale and continued focus on cost efficiencies may provide some buffer against these headwinds.
Bottom Line?
Experience Co’s steady half-year growth masks underlying segment volatility, with strategic divestments and cost discipline shaping its path forward.
Questions in the middle?
- How will Experience Co manage ongoing industrial relations risks in its Australian skydiving operations?
- What impact will the Wild Bush Luxury sale have on the company’s financial flexibility and focus?
- Can Reef Unlimited and Skydive New Zealand sustain their growth amid weather uncertainties?