ASX listed travel and tourism giant SeaLink Travel Group Limited (ASX: SLK) jumped 3.21% to trade at $4.180 on the day of its 2018 Annual General Meeting, 22 October 2018.
Fiscal year 2018 did not prove to be a healthy year for the company as its underlying EBIT downsized $3.9 million to $33.6 million on the back of $1.0 million trading loss from three months performance of newly acquired Fraser Island.
The results disappointed the investors with lower earnings and profits. As reported net profit after tax of the company has fallen from $23.8 million in FY17 to $19.6 million in FY18. It led to 1.8 cents decline in earnings per share accounting to 21.8 cents per share in Fiscal 2018.
This comes after the SeaLink Travel Group took over Fraser Island of Kingfisher Bay Resort Group in March 2018 along with its Kingfisher Bay Resort, Eurong Beach Resort and Fraser Explorer Tours. But as expected, driven by the non-peak travel season the company had to face $1.0 million plunge in its EBIT from Fraser Island operations, however the company chooses to remain positive for Fraser’s full year performance in FY19 expected to contribute $7.9 million to group’s FY19EBIT. [optin-monster-shortcode id=”swikrbu1d9j9aq0o4cko”]
The impact of three months loss from Fraser Island was not the only factor to turn the company’s financial upside down, rather higher fuel costs, rise in number of employee and increase in R&M by $0.5 million have heavily impacted the company’s profit.
But notwithstanding the company’s lower profit, SeaLink Board declared 3.6% greater dividend from 14.0 cents per share in FY17. That takes total FY18 dividend to 14.5 cents per share, franked 100%.
SeaLink presents a strong organic growth perspective for fiscal year 2019. It has been expected that FY19 profit would shoot straight up underpinned by anticipated reversal of trading losses from new ferry routes of ~$1.8 million and from Western Australia ~$0.7 million organic. Full year contribution from Fraser Island acquisition, expected to $7.9 million in group’s EBIT, and contribution from ferry service to Bruny Island in Tasmania are anticipated to be the other important factors in profit improvement of the company in FY19. However, the estimated capital expenditure in FY19 is expected to range between ~$18 million -$19 million.
During last financial year the company has launched Manly to Barangaroo service in NSW and Rottnest Island Service in WA. The company further expects to deliver two new Tubby Class ferries for inner harbor opportunities in November 2018.
Further, long-standing CEO Jeff Ellison announced his intention to retire from SeaLink on or before the Annual General Meeting in October 2019. But it has been announced that after some time he may return as a non-executive Director to the Board.
The stock of SeaLink Travel Group last traded at $4.170 on 22 October 2018 with PE of 20.980 x with market capitalization of $409.98 million. Whereas, SLK stock has fallen by 4.93% over the past one year.
The Income available from dividends remains attractive for many investors.
We take a look at the best yields on the market and assess what they say about a company’s prospect.
One Thing is certain, though, Australia interest rates are still low, making income difficult to come by and keeping the focus for many investors on high yielding stocks. Kalkine’s team of analysts bought you handpicked report for “Top 25 Dividend Stocks For 2018.”
ASX-relevant Special Reports are published year-round to provide a detailed analysis into an investing opportunity or a potential risk to your portfolio.
Click here to get your free report.
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkinemedia.com and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.