Transport operator SeaLink (ASX:SLK) took full advantage of a domestic tourism boom and its steady government client base, delivering a record underlying profit of $74.4 million (NPATA), up 152 per cent from the previous year.
After reporting a loss after tax of $13.6 million in FY20, the company has bounced back stronger than ever with record earnings in FY21 of $167.5 million.
Adelaide-based Sealink is showing no signs of slowing down, extending its contracts with the Brisbane City Council and in its home city. In addition, it acquired Western Australia’s Go West Tours with an enterprise value of $64.7 million in May.
CEO Clint Feuerherdt says approximately 90 per cent of revenue is fully contracted to government or large corporate entities. However, more than a third of its earnings comes from the marine and tourism division.
“SeaLink has demonstrated the resilience of its operations and quality of its contracted earnings base in the face of an unprecedented global disruption,” says Feuerherdt.
“Whilst the Marine & Tourism division is exposed to the turmoil that the COVID-19 pandemic inflicts, SeaLink is well positioned to capture the heightened level of domestic travel demand, providing marine transport, holiday and general tourism product to very unique island destinations around the country.”
Brisbane will see the CityCat, CityHopper and Cross River Ferry networks operating under a 15-year contract.
Meanwhile, three significant bus contracts were also renewed in July 2020 in Adelaide, as well as an expansion to the Outer North bus service.
A joint venture to operate a newly franchised Adelaide tram contract has also commenced, with all deals running for eight years plus the option for a further two.
“We also welcomed two new vessels to the marine business, Parrabah, which was built in Tasmania and now services Bruny Island and Coolgaree Cat, a $7.3 million vessel that services Palm Island locals and visitors,” says Feuerherdt.
Overseas, the company has retained its Singapore Bulim bus contract and secured another in the city-state with Sembawang-Yishun. Both are on five-year contracts, with the option of extending it for a further two.
SeaLink received a total of $11.9 million in government support under JobKeeper payments in the period. In addition, the company has been provided with similar employee-focused schemes in Singapore and London.
The market has also recognised the company’s growth, as share prices have doubled in the last 12 months.
“We are looking forward to another successful year ahead, and I thank our entire team for their continued hard work and commitment during some of the most challenging times we have faced as a team, a community and an industry,” says Feuerherdt.
Shares in SLK are down 4.39 per cent to $9.59 per share at 11.50am AEST.
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