Kelsian Group Limited has reported a robust first half for FY26 with double-digit revenue growth and upgraded EBITDA guidance, alongside a strategic $161 million sale of its Tourism Portfolio.
- Revenue up 11% to $1.186 billion in 1HFY26
- Underlying EBITDA rises 16% to $153.8 million
- Underlying EBIT and NPATA grow 27% and 32% respectively
- Binding agreement to divest Tourism Portfolio for $161 million
- Fully franked interim dividend maintained at 8 cents per share
Strong Financial Performance
Kelsian Group Limited has delivered a standout half-year result for the six months ending 31 December 2025, posting revenue of $1.186 billion, an 11% increase on the prior corresponding period. This growth was underpinned by contract indexation mechanisms, expansion of industrial sector contracts in the US, and improved trading in its Marine & Tourism division.
Underlying EBITDA climbed 16% to $153.8 million, while underlying EBIT and net profit after tax before amortisation (NPATA) surged 27% and 32% respectively, reflecting operational efficiencies and strong contract performance across its diversified transport portfolio.
Operational Highlights and Strategic Moves
The Australian Bus segment benefited from revenue protections against inflationary pressures, although delays in transitioning to electric buses increased maintenance costs. Notably, Kelsian secured a new contract with Queensland’s Department of Transport to operate bus services in Ipswich and Logan, commencing November 2025, featuring new electric buses and infrastructure.
Internationally, the US motorcoach business saw robust growth driven by industrial contracts, supported by a $23 million capital investment in new vehicles. In the UK, Kelsian expanded its footprint with the acquisition of South Wales Transport (Neath) Limited, positioning itself to capitalise on the sizeable regional bus franchising market.
The Marine & Tourism division showed resilience with a solid half-year performance, aided by a rebound in international visitors and improved management of key resorts. However, significant vessel maintenance costs and delayed ferry mobilisations tempered margins.
Tourism Portfolio Divestment and Corporate Initiatives
In a major strategic development, Kelsian entered into binding agreements to sell its Tourism Portfolio for $161 million to Journey Beyond. This divestment, subject to regulatory approvals and customary conditions, is expected to complete in the second half of calendar 2026 and aims to unlock shareholder value while sharpening the company’s focus on core transport operations.
Additionally, Kelsian is advancing a global Finance and HR platform rollout designed to unify data systems and enhance governance, with implementation costs of $21 million over three years. This transformation is expected to yield significant process efficiencies and support faster decision-making.
Financial Position and Outlook
The company’s balance sheet remains robust with leverage reduced to 2.7 times from 3.2 times a year earlier, and net operating cash flow conversion at a strong 94.8%. Kelsian declared a fully franked interim dividend of 8 cents per share, consistent with the prior year.
Reflecting confidence in its trajectory, Kelsian upgraded its full-year underlying EBITDA guidance to a range of $303 million to $312 million, signalling optimism about capitalising on growth opportunities in Australia, the US, UK, Singapore, and emerging markets such as New Zealand.
Bottom Line?
Kelsian’s strategic divestment and operational momentum set the stage for a transformative year ahead, but investors will watch closely for regulatory approvals and the pace of electric fleet transitions.
Questions in the middle?
- How will the Tourism Portfolio sale impact Kelsian’s long-term growth and capital allocation?
- What are the risks and timelines associated with the delayed electric bus fleet transition?
- How significant is the UK bus franchising market opportunity following recent acquisitions?