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Highlights
- Revenue increased by 9.1% to $1,071.8 million for H1 FY25
- Secured multiple long-term contracts across Australia, the U.S., and the Channel Islands
- CEO transition announced, with Graeme Legh set to take over leadership
Kelsian Group (ASX:KLS) has released its financial results for the first half of FY25, demonstrating steady growth and strategic progress. Revenue climbed by 9.1% to $1,071.8 million, reflecting continued expansion across domestic and international markets. Underlying EBITDA recorded a marginal increase of 1.3% to $132.2 million, while underlying NPATA saw a 7.9% dip to $39.7 million. Earnings per Share before Amortisation declined by 12.6% to 14.7 cents. The company maintained a fully franked interim dividend of 8.0 cents per share.
Operational Milestones and Contract Wins
Kelsian has achieved several operational milestones, strengthening its position in the transport and mobility services sector. The successful launch of the Bankstown Rail Replacement service, featuring 60 new buses and 140 drivers, highlights the company’s operational efficiency.
Additionally, the renewal of the Bunbury & Busselton bus services contract ensures a steady revenue stream of $100 million over ten years. In the U.S., the Bustang contract with the Colorado Department of Transportation was extended, bringing in up to US$26.5 million in its first year. Another significant achievement was securing the Jersey contract in the Channel Islands, estimated at A$260 million over a decade, along with the extension of Darwin ferry services for another five years.
Capital Management and Strategic Adjustments
A refined capital management and allocation strategy was introduced, focusing on strengthening financial stability. The company is targeting a leverage reduction to a range of 2.0x to 2.5x by June 2026, ensuring a disciplined approach to financial growth. Sustaining capital expenditure is expected to be maintained at approximately $85 million from July 2025 onwards. Furthermore, the sale of three Western Australian bus depots is set to generate $20.3 million in proceeds.
Leadership Transition and Future Outlook
With a leadership transition on the horizon, Clint Feuerherdt will step down as Managing Director and Group CEO on 1 April 2025, assuming a part-time Strategic Adviser role. Graeme Legh, currently CEO of AAAHI, will step in as the new Group CEO.
Looking ahead, Kelsian maintains its FY25 Underlying EBITDA forecast between $283 million and $295 million. Growth in rail replacement contracts and industrial construction projects is expected to drive momentum in the second half of the fiscal year, reinforcing the company’s strategic direction.
