Top Travel & Leisure stocks to watch out for - EXP, ATL, IDZ

Highlights

  • With an increase in the vaccination rate and the gradual reopening of the borders, many ASX-listed players from the travel and tourism space started coming up with offers.
  • However, the new COVID variant Omicron has raised the alarm within the country.
  • Australian states and territories are imposing border restrictions to prevent the spread of the new variant.

COVID-19 period was a roller-coaster for many travel and leisure stocks due to the frequent restrictions imposed by the government to prevent Aussies from COVID-19. In a media release on 22 November 2021, the Australian government announced to gradually reopen the international borders and secure economic recovery by opening borders to skilled and student visa holders. Also, these changes will protect the health of Australians and reunite people during the festive period.

ALSO READ: ASX 200 to fall as Omicron threatens economic recovery

However, there is an alert because of the recent variant of COVID-19, Omicron in Africa. As a result, Australian states and territories are imposing border restrictions. On Saturday, Australia tightened its restriction on travellers from nine African countries where the new cases of a new variant of COVID-19 were found.

RELATED READ: How is Omicron affecting financial markets?

On Sunday, 28 November 2021, Australia confirmed two cases of this new COVID-19 variant in travellers from Africa.

DO WATCH: ASX opens lower amid Omicron fears | Top Movers at Opening Trades

In this backdrop, let us look at three travel and leisure stocks and see how they are positioned currently.

Experience Co Limited (ASX:EXP)

Experience Co Limited is an adventure tourism firm that aims to provide superior and memorable adventure tourism experiences like tandem skydiving, exclusive wilderness multi-day adventures, walks, indigenous experiences and tours to the Great Barrier Reef.

In FY2021, the Company noted an improvement in financial numbers. Statutory net loss after tax which was a loss of AU$51.4 million in FY2020. The balance sheet remains healthy with a cash and cash equivalent of AU$13.3 million and net debt of AU$2.8 million as on 30 June 2021.

It noted an increase in domestic demand. The Company expects the demand to accelerate further when the market reopens. Other than this, the Company completed the acquisition of Wild Bush Luxury in July 2021. The integration is in progress with a strong pipeline for bookings for 2022 and 2023.

On 25 October 2021, EXP announced the completion of a fully underwritten 1 for 3.33 accelerated non-renounceable entitlement offer. It raised ~AU$4 million via Retail Entitlement Offer and AU$51.0 million via Institutional Entitlement Offer. The funds would be used for funding the acquisition of Trees Adventure.

The stock closed at AU$0.330 per share today.

RELATED READ: Experience Co (ASX:EXP) announces acquisition and equity raising

EXP completed capital raise to support acquisition of Trees Adventure

Apollo Tourism & Leisure Ltd (ASX:ATL)

Apollo Tourism & Leisure Ltd provides unforgettable road travel experiences to its guests. It is a multi-national, vertically integrated manufacturer, rental fleet operator, wholesaler and retailer of several recreational vehicles, such as motorhomes, campervans and caravans.

During FY2021, the Company, like many other companies from the same space, experienced disruption due to COVID-19 restrictions. It noted a drop in revenue from AU$366.7 million to AU$293.3 million in FY2021. However, there was an improvement in the net loss during the year. Net loss after tax declined from AU$61.2 million in FY2020 to AU$17.9 million. Despite snap lockdowns and border closures, the Company noted record RV sales demand generated strong gross margins.

It partnered with Qantas Frequent Flyer program. Group debt also declined during the period.

Currently, the Company seems to be well-positioned to offer a fantastic tourism experience to its customers. It announced 22 Queensland experiences for 2022 on its website. The Company also has something to offer its customers travelling this Christmas.

The stock closed 4.033% lower at AU$0.595 per share today.

Indoor Skydive Australia Group Limited (ASX:IDZ)

Indoor Skydive Australia Group is an innovative business building immersive XR products and experiences. In FY2021, the Company reported a 45% jump in its revenue to AU$7.3 million and a 28% growth in sales to AU$8 million. It made a profit of AU$4.062 in FY2021 which was a loss of AU$5.440 million in FY2020.

In September 2021, the Company completed multiple activities. These include:

  • The acquisition and conclusion of Virtual Reality Production Studio, Red Cartel.
  • It launched ISA Group’s military training company, Operator Tactical Solutions.
  • It started work and purchase of equipment for FREAK Macquarie Centre.

the stock IDZ closed 9.722% strong at AU$0.079 per share today.

ALSO READ: A look at how ASX-listed stocks VR1 and IDZ are faring as virtual reality space heats up

What Next?

It seems that the above players are well positioned to offer exciting travelling experiences to their customers. However, the newfound COVID-19 variant could disrupt the upcoming, anticipated harmony.

As on 29 November 2021, 86.7% of the Australian population above 16 years are fully vaccinated. Hence, it would be interesting to see if the vaccine is effective in case of this new variant or not and as to  how it would impact the country, its policies and people.

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