Kelsian Group shares rally as CEO defends capex guidance
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The news: Shares in Kelsian Group rallied in morning trade after the ferry and bus operator defended its higher-than-expected FY25 capital expenditure guidance that triggered a sell-off on Monday.
The numbers: Kelsian shares were up 6.7% to $4.24 by 11:10am AEST, having plunged 23.5% on Monday after the group revealed higher-than-expected capital expenditure in FY25.
Kelsian, formerly SeaLink Travel Group, declared a final dividend of 9.5 cents per share, above average estimates of 8 cents per share. It also released FY25 EBITDA guidance of $283 million to $295 million, in line with consensus expectations of $289 million.
The context: On Monday, Kelsian reported full-year earnings that largely met average analysts' estimates. However, its FY25 capex guidance of $180 million to $190 million far exceeded consensus forecasts of $97 million.
In its latest announcement, the group defended its capex plans, which Morningstar analysts had referred to as an "unexpected blowout" as they placed their ratings on the stock under review.
What they said: “The growth momentum across all areas of our business, in particular in the Australian bus and AAAHI businesses, supports this investment to underpin multiple years of growth in the medium and longer term,” said Kelsian's managing director and group CEO Clint Feuerherdt.
“The board and management recognise the solid foundation for growth and are investing accordingly to capitalise on it,” he said.
The sources: ASX announcement, RBC Capital Markets research
