Experience Co posted a modest 2% revenue rise to $129.6 million in FY26, but underlying EBITDA slipped 8% due to weather disruptions, inflationary pressures, and industrial action. The company is advancing a $65 million deal to combine its Skydive business with Inflite Group.
- FY26 revenue up 2% to $129.6 million
- Underlying EBITDA down 8% to $17.6 million
- Skydive Australia consolidates Victorian drop zones
- Wild Bush Luxury divested for $5.1 million
- Proposed $65 million Skydive business combination with Inflite
Revenue Growth Tempered by External Challenges
Experience Co Limited (ASX:EXP) managed to eke out a 2% increase in revenue to $129.6 million for FY26, but underlying EBITDA took an 8% hit, falling to $17.6 million. The adventure tourism operator faced a tough year marked by severe weather events, industrial action, and inflationary pressures that weighed heavily on margins.
The Skydiving segment, a core part of the business, saw revenue decline 2% to $63.8 million, with tandem passenger numbers falling to approximately 117,000 from 119,000 the prior year. Skydive Australia bore the brunt of the softness, suffering a 7% drop in tandem jumps amid protected industrial action during peak trading periods and adverse weather. In contrast, Skydive New Zealand posted a 9% volume increase, boosted by strong demand in Queenstown and expanded landing capacity at Wanaka, though currency headwinds from a weaker NZD tempered the AUD-reported growth.
Adventure Experiences Segment Shows Resilience
The Adventure Experiences division, which includes Reef Unlimited and Treetops Adventure, delivered a 6% revenue lift to $65.8 million. Reef Unlimited benefited from a full year of operations of the Aquarius II vessel and a $4 million Queensland Government grant towards a new vessel, Reef Magic IV, slated for launch in late 2027. Despite weather disruptions in Tropical North Queensland, Reef Unlimited grew customer volumes by 4%.
Treetops Adventure expanded its footprint with the acquisition of West Beach Adventure in Adelaide for $1.25 million, marking its entry into South Australia. The Canberra site also launched new Networld and Zipline attractions, driving volume growth despite a slight dip overall. The segment’s underlying EBITDA dipped 4% to $15.4 million, pressured by fuel costs and wage inflation.
Strategic Portfolio Simplification and Cost Discipline
Experience Co continued its strategic realignment by divesting the Wild Bush Luxury business to Intrepid Travel for $5.1 million, with net proceeds of $3.4 million used to reduce corporate debt. This divestment aligns with the company’s focus on scalable adventure tourism assets.
Cost control remained a priority, with the Group achieving an additional $2 million in annualised savings during FY26, building on $2.5 million saved over the previous two years. Procurement efficiencies and fuel supply arrangements helped mitigate inflationary impacts, though operating margins were still squeezed, especially in the Skydiving segment.
Skydive Australia Under Review and Proposed Business Combination
The Skydive Australia business unit underwent a formal review after underperforming against expectations and facing changing market dynamics since FY19. The review led to consolidation of Victorian drop zones, with the Yarra Valley site closed and Melbourne placed into care and maintenance. These moves improved operational efficiency.
More notably, on 14 July 2026, Experience Co signed a non-binding term sheet with New Zealand’s Inflite Group Limited for a proposed combination of its Australian and New Zealand skydive and aviation businesses with Inflite’s existing aviation operations. The deal envisages an enterprise value of about $110 million, with Experience Co to receive approximately $65 million in consideration, including $41 million upfront cash, a $5 million vendor note, and a 32.5% equity stake in the merged entity. Due diligence and approvals are ongoing, with no certainty of completion.
Balance Sheet and Cash Flow Highlights
The Group’s net debt remained stable at $10.7 million, supported by a multi-year secured debt facility with Commonwealth Bank of Australia, which had $15.8 million undrawn at year-end. Cash reserves halved to $5.4 million, reflecting dividend payments and debt repayments.
Operating cash flow fell 32% to $11.9 million, impacted by softer trading and working capital timing, while free cash flow dropped 69% to $2.3 million due to maintenance capex and acquisition spend, including the West Beach Adventure purchase.
Outlook and Market Conditions
Experience Co’s management remains cautiously optimistic about the Group’s long-term earnings potential, supported by a diversified portfolio and growth initiatives. However, they acknowledge that the earnings recovery will be slower than initially anticipated due to uneven international tourism rebound, ongoing macroeconomic uncertainty, and structural changes in the Skydive business.
July 2026 trading started strongly, with unaudited underlying EBITDA of $2.3 million, up from $2.1 million a year prior, despite weather challenges in New Zealand. Skydive Australia, Reef Unlimited, and Treetops Adventure all contributed to the improved performance.
Bottom Line?
Experience Co’s FY26 results reflect resilience amid external headwinds, but the proposed Skydive deal and operational realignments signal a pivotal phase ahead.
Questions in the middle?
- Will the proposed Inflite combination unlock value or complicate integration risks?
- How will ongoing industrial relations issues affect Skydive Australia’s recovery?
- Can the Group sustain cost savings while investing in growth amid inflationary pressures?