Kelsian Group Limited - FY24 Full Year Results and FY25 Guidance
KLS (KLS) Share Update August 2024 Tuesday 27th
Kelsian Group Reports Record FY24 Results and Positive FY25 Outlook
Kelsian Group Limited (ASX: KLS) has reported record financial results for the fiscal year ending 30 June 2024, driven by strong revenue growth, strategic acquisitions, and new contracts. The company also provided a positive outlook for FY25.
Instant Summary:
- Revenue up 42.2% to $2,016.8 million.
- Underlying EBITDA up 63.9% to $265.4 million.
- Statutory NPAT up 176.2% to $58.0 million.
- Fully franked final dividend of 9.5 cents per share.
- New Sydney bus contracts successfully transitioned.
- Major rail replacement projects secured in Perth and Sydney.
- Successful refinancing of corporate banking facilities.
Financial Performance
Kelsian Group Limited (ASX: KLS) has reported a record financial performance for the fiscal year ending 30 June 2024. The company achieved a 42.2% increase in revenue, reaching $2,016.8 million. This growth was primarily driven by the full-year contribution of All Aboard America! Holdings, Inc. (AAAHI) and new bus contracts in Sydney.
Underlying EBITDA rose by 63.9% to $265.4 million, with the underlying EBITDA margin improving by 180 basis points to 13.2%. Underlying EBIT increased by 44.5% to $122.1 million, while underlying NPATA grew by 32.3% to $92.6 million. Earnings per share before amortization (EPSA) increased by 13.3% to 34 cents per share.
Operational Highlights
Kelsian successfully transitioned new bus regions in Sydney on time and on budget, making Transit Systems the largest operator in Sydney. The company also secured major rail replacement projects in Perth and Sydney, with the latter set to begin in FY25.
Labour availability issues were resolved through extensive recruitment and training programs. AAAHI retained and extended several major contracts, expanded into Austin, Texas, and added new clients in various sectors. Despite inclement weather affecting the Marine and Tourism business, demand remained strong.
Balance Sheet and Cashflow
In July 2023, Kelsian established a $40 million financing facility for the purchase of 49 Battery-Electric buses. Additional financing facilities totaling $74.8 million were set up in February 2024 for new bus assets in Sydney. As of 30 June 2024, Kelsian had government-backed contracted assets with a vehicle termination payment obligation of $153.3 million.
The company achieved a record gross operating cash flow of $215.5 million, an 8.3% increase. Cash conversion in the second half was 98.5%, bringing the overall cash conversion for the full year to 92.3%. Kelsian invested $148.5 million in new and replacement assets during FY24.
FY25 Outlook
Kelsian's Board has approved investments in several strategic initiatives to support continued growth. Capital expenditure for FY25 is expected to be between $180 million and $190 million. The Board anticipates FY25 underlying EBITDA to be between $283 million and $295 million, with a skew to the second half due to rail replacement contracts and growth in AAAHI.
The record financial performance and positive outlook for FY25 are likely to boost investor confidence in Kelsian Group. The company's strategic acquisitions and new contracts have significantly contributed to its growth, and the successful refinancing of corporate banking facilities provides financial stability. The anticipated increase in capital expenditure for FY25 indicates a commitment to long-term growth.
Investor Reaction:
Analysts are likely to react positively to Kelsian's record financial results and optimistic outlook for FY25. The company's strong revenue growth, improved margins, and successful execution of new contracts are expected to enhance investor sentiment.
Conclusion:
Investors should consider Kelsian Group's strong financial performance and strategic growth initiatives when making investment decisions. The company's positive outlook for FY25 and commitment to long-term growth make it an attractive option for stock market investors.