Experience (ASX:EXP) reported first-half FY26 results that management said were largely in line with the prior corresponding period (PCP) despite a “challenging” operating backdrop, citing mixed tourism trends, weather disruption and industrial action affecting parts of the group.
First-half results and balance sheet
CEO John O’Sullivan said revenue from continuing operations rose 5% to AUD 67.5 million, while underlying EBITDA (post AASB 16) increased 1% to AUD 10.5 million. Net profit after tax improved to AUD 2.6 million, and cash at 30 December 2025 was AUD 8.5 million.
On the balance sheet, Yates said Experience Co maintained a prudent approach to gearing and had AUD 14 million of undrawn funds available across facilities at 31 December. He added the maturity of the market rate loan facility was extended by one year to December 2027.
Segment performance: Reef Unlimited strength offsets softer areas
Management described variability across business units. Yates said stronger performance in Reef Unlimited and Skydive New Zealand offset softer performance in Skydive Australia and parts of Treetops Adventure.
In the Adventure Experiences segment, Yates said Reef Unlimited delivered 11% revenue growth versus PCP, driven by 7% volume growth and higher average revenue per customer. He attributed improved volumes particularly to Fitzroy Island and Port Douglas, and said the ramp-up and integration of the new vessel Aquarius II supported results, including the introduction of new Cairns-based experiences using the enhanced fleet.
However, he noted the key Christmas-to-New Year period was impacted by poor weather and was followed by Tropical Cyclone Koji in January. He also said Reef Unlimited’s average revenue per customer rose 4% due to targeted price increases, partially offset by a higher proportion of lower-priced products reflecting customer price sensitivity.
Treetops Adventure reported revenue in line with PCP, supported by an increase in average revenue per customer that offset lower volumes. Yates said volumes fell 4% due to mixed site performance, weather impacts and the loss of Newcastle volumes; excluding Newcastle, total volumes were down 1% across remaining sites. He pointed to ancillary initiatives, including a new zip line at the Canberra site and enhanced food and beverage sales, as contributors to a 3% increase in average revenue per customer.
O’Sullivan said the company was advised late in the half that renewal of the Newcastle lease was unsuccessful, describing the earnings impact as immaterial but noting it contributed to the year-on-year volume decline. He said the Newcastle outcome was an anomaly, with leases at Nowra, Canberra and Hollybank (Tasmania) renewed during the period.
Skydiving: New Zealand growth, Australia under pressure and under review
The skydiving segment saw a divergence between geographies. O’Sullivan said underlying EBITDA for the skydiving segment increased 10%, “predominantly driven” by New Zealand assets.
Yates said Skydive Australia tandem PACs volumes decreased 7%, citing inconsistent recovery of international visitors, cost-of-living pressures on domestic customers, weather disruption, and protected industrial action in December. He highlighted that the December volume shortfall accounted for 68% of Skydive Australia’s total first-half volume shortfall versus prior year, coinciding with protected industrial action and negative media commentary by the Australian Workers’ Union raising safety concerns during the peak Christmas sales window.
Skydive New Zealand tandem PACs volumes increased 11% on strong booking growth at both drop zones, despite weather impacts on processing during key periods including Golden Week in October. O’Sullivan told analysts that the Queenstown asset had “pretty much” returned to pre-pandemic volumes, with weather affecting the ability to process customers, while the Wanaka site was around “50% to 60%” recovered and was a focus for continued volume growth.
Both Australia and New Zealand saw slight improvement in average revenue per customer for core tandem experiences, which Yates said was supported by strong photo and video uptake. Operating margins in the skydiving segment improved, driven by fixed-cost leverage in New Zealand as volumes rose.
Management also announced an operational on-site review of Skydive Australia. O’Sullivan said the leadership team was “not happy” with the unit’s performance, pointing to changes in labor availability, employment legislation, customer mix and preferences, and inflationary pressures, alongside a tougher macro environment. He said the review would be completed internally, consider all options for the board, and the outcome would be provided to the market ahead of the FY26 results in August.
Portfolio changes, costs, capital management and outlook
During the half, the company announced the sale of Wild Bush Luxury to Intrepid Travel for AUD 5.1 million, which O’Sullivan said would simplify the portfolio and free management to focus on remaining verticals. He said completion was expected in late March and April, subject to ACCC approval. Yates clarified that, under a cash-and-debt-free structure, the cash paid at completion would be reduced by debt and debt-like items assumed (with a key item being bookings in advance historically ranging AUD 1 million to AUD 2 million depending on the month), and that cash received for bookings in advance at completion would be retained by Experience Co. He said a portion of net proceeds was intended to repay part of CBA debt, with discussions ongoing.
On costs, O’Sullivan said corporate efforts continued under a “cost out” program targeting more than AUD 2 million in operational savings expected to start flowing through in FY27. Yates said around 50% of the greater-than-AUD-2-million annualized cost-out target for FY26 had been implemented, with benefits expected to ramp over the balance of the year.
The company also continued capital management initiatives. O’Sullivan referenced the first dividend since FY18, paid in September, and the ongoing on-market buyback. Yates said the company paid a AUD 0.0025 per share fully franked dividend and, since the buyback began in June 2025, had repurchased 2.79 million shares (about 0.37% of issued capital).
Looking to trading, O’Sullivan said January was “extremely disappointing” due to Cyclone Koji, poor weather on New Zealand’s South Island, lower arrivals into Cairns (with domestic flight arrivals down 8% and international volumes down 12% for the month), and lingering impacts from December industrial action and AWU messaging on Skydive Australia sales. He said February showed better forward demand versus PCP due to Lunar New Year across Reef Unlimited, Skydive New Zealand and Skydive Australia, although Skydive New Zealand was affected by poor weather and Skydive Australia lost a further six days of protected industrial action over Valentine’s Day and Lunar New Year, impacting about 1,700 bookings.
O’Sullivan said the company’s longer-term outlook remained positive but had been “adversely affected” by slower domestic consumption and inbound tourism growth. He said management and the board now believed earnings recovery would take longer than previously anticipated, with further updates expected at the FY26 results briefing after full-year trading and completion of the Skydive Australia review.
About Experience (ASX:EXP)
Experience Co Limited engages in adventure tourism and leisure business in Australia and New Zealand. The company operates through Skydiving and Adventure Experiences segments. It provides tandem skydive and related products; and reef-based dive and snorkel experiences, as well as rainforest tours. The company also offers island day trips, reef tours, multi-days experiences, and tree ropes and ziplining experiences. In addition, it provides aircraft maintenance services. The company operates 14 skydiving drop zones in Australia and 3 in New Zealand.
