Kelsian Group has completed the $149.9 million sale of its Tourism Portfolio to Journey Beyond, reducing pro forma leverage to approximately 2.0x. The transport operator has reset FY27 Underlying EBITDA guidance to $295 million-$310 million as it shifts towards commuter and contracted services.
- Tourism Portfolio sale completed to Journey Beyond
- $149.9 million gross cash proceeds received
- Pro forma leverage reduced to approximately 2.0x
- FY27 Underlying EBITDA guidance reset to $295 million-$310 million
- Guidance includes approximately $3 million of stranded costs
Tourism sale delivers $149.9 million
Kelsian Group Limited (ASX:KLS) has completed the sale of its Tourism Portfolio to Journey Beyond, turning a long-running strategic reshaping exercise into cash and a lower-debt balance sheet. Kelsian received gross proceeds of $149.9 million, including $4.3 million relating to preliminary working capital and net debt adjustments.
The proceeds are stated before transaction costs and tax. Kelsian estimates tax of about $12 million, currently expected to be payable in April 2028, meaning the headline cash figure is not the same as the eventual net economic benefit to shareholders.
Leverage falls as Kelsian narrows its focus
Pro forma leverage has fallen to approximately 2.0x, calculated using Underlying EBITDA excluding the Tourism Portfolio, on a pre-AASB 16 basis and excluding special-purpose vehicle earnings and debt. The company said the divestment reduces capital intensity and exposure to discretionary consumer spending.
Chief executive Graeme Legh described Kelsian (ASX:KLS) as emerging as a more focused global commuter and contracted transport business spanning buses, motorcoaches and marine services. The company says its remaining operations have lower earnings exposure to fuel-price volatility, while it intends to pursue growth opportunities particularly in the United States and United Kingdom.
FY27 EBITDA guidance reset after divestment
Kelsian now expects FY27 Underlying EBITDA of between $295 million and $310 million, excluding the Tourism Portfolio for the entire financial year and assuming no significant deterioration in operating conditions. The range includes approximately $3 million in stranded costs associated with the sale.
The updated estimates also include depreciation of about $132 million, amortisation of approximately $23 million, interest expense of around $50 million and capital expenditure of roughly $116 million. The capex figure includes $15 million deferred from FY26, while the interest estimate reflects lower debt-related costs after the transaction.
Kelsian said trading in the opening period of FY27 has been in line with expectations. The next test is whether the reduced portfolio can deliver within the new earnings range while management converts its stated US and UK growth pipeline into returns without eroding the balance-sheet improvement just achieved.
Bottom Line?
The sale gives Kelsian a cleaner balance sheet, but the investment case now rests on disciplined deployment of the proceeds and delivery against a lower, tourism-free FY27 earnings base.
Questions in the middle?
- How much of the strengthened balance sheet will Kelsian deploy towards acquisitions or organic growth in the United States and United Kingdom?
- Can the remaining commuter and contracted transport operations offset the earnings contribution previously provided by the Tourism Portfolio?
- Will the estimated $12 million tax liability and approximately $3 million of stranded costs change the eventual cash benefit of the divestment?