Earnings call transcript: Kelsian posts record FY2026 result as shares rise 4.6%

Kelsian Group reported a record FY2026 financial performance, with full-year profit and cash generation reaching new highs. The company's revenue increased by 8.8% to AUD 2.403 billion, while underlying EBITDA rose 10.8% to AUD 315.8 million, and underlying NPATA grew 17.2% to AUD 111.1 million. Shares in Kelsian climbed 4.6% to $5 following the announcement.

The company attributed its strong financial results to robust performance across its bus, marine, and international transport operations. International bus division revenue grew by 17.4% and underlying EBITDA increased 28.1%. Stronger contracts and faster growth in U.S. industrial employee shuttle contracts also contributed to the positive trend.

However, some segments faced softer demand, such as tourism operations, which were impacted by fuel costs and weaker consumer sentiment. Despite these challenges, over 90% of Kelsian's revenue came from contracted or non-discretionary sources, providing a buffer against inflation and oil-price fluctuations.

The company's cash generation remained solid, with a 91% cash conversion ratio. Net leverage fell to 2.46 times EBITDA, within the company's target range. The board declared a final dividend of AUD 0.10 per share, resulting in a full-year payout of AUD 0.18 per share, fully franked.

Looking ahead, Kelsian guided FY2027 underlying EBITDA to between AUD 320 million and AUD 335 million, reflecting continued growth. The company expects Bankstown Rail Replacement to wind down in the first half of FY2027 and slower U.S. industrial contract ramp-up, but sees opportunities in marine and tourism operations despite ongoing challenges.