Mother nature wreaks havoc on Experience Co, company cuts guidance

Mother nature wreaks havoc on Experience Co, company cuts guidance

Experience Co (ASX: EXP) has slashed its full year guidance following what has been called 'the worst rainfall in a generation' for North Queensland.

The Wollongong-based tourism adventure company's bottom line was hammered by "unusually poor weather" during March and April.

As a result, Experience Co revised its revenue guidance to $127-130 million, down from an initial $135-140 million.

The company also revised its earnings (EBITDA) forecast down from an initial $35-37 million to just $30-31 million.

The worst affected arms of the company included its sky diving, canyoning, ballooning and rafting experiences.

The company's canyoning division was out of action for a total of 31 days, while its rafting operations in Tully River and Barron River were collectively non-operational for 28 days during the quarter.

The worst day of rainfall came on 26 March 2018 when more than 200mm fell in Cairns, Port Douglas and Mission Beach, three of Experience Co's popular markets.

Cairns received more than 34 per cent of its average annual rainfall while Port Douglas received almost half (48.4 per cent) of its 12-month rainfall average during the month of March alone.

The severe weather continued through April and caused the Tully River to collapse, resulting in the closure of Experience Co's white-water rafting operations in the area.

In a statement to the ASX, Experience Co said that what was meant to be its peak season became its greatest liability ahead of FY18.

"March and April are considered peak times for the business, and during these periods a number of short term fixed contracts are entered into with extra ground staff on the assumption of normal weather patterns," said the company.

"The quarter ended 31 March 2018 fell well short of management's sales and EBITDA expectations, and it is expected that the month ended 30 April 2018 will also fall short.

"Accordingly, these adverse weather factors over two months have seriously impacted the company's outlook for the financial year ended 30 June 2018."

The company also said that, had weather patterns remained normal during the period, it would have met its initial guidance and outlook.

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