Kelsian delivers record half-year as underlying profit surges 32%
Kelsian Group has delivered its strongest first-half performance in company history, with H1 FY26 revenue climbing 10.6% to $1,186.0 million and underlying net profit after tax before amortisation (Underlying NPATA) surging 32% to $52.5 million. The transport and marine services operator reported statutory net profit after tax of $32.4 million, up 62% on the prior corresponding period, underpinned by strong contract indexation mechanisms, US motorcoach ramp-up, and improved tourism trading.
Operating cash flow remained robust at $83.1 million, delivering cash conversion of 94.8%. Leverage improved from 3.2x to 2.7x, reflecting disciplined capital management. The Board maintained its fully franked interim dividend at 8.0 cents per share, with a record date of 20 March 2026 and payment date of 20 April 2026.
| Metric | 1HFY26 ($M) | 1HFY25 ($M) | Change (%) |
|---|---|---|---|
| Revenue | 1,186.0 | 1,071.8 | +10.6% |
| Underlying EBITDA | 153.8 | 132.2 | +16% |
| Underlying EBIT | 75.3 | 59.5 | +27% |
| Underlying NPATA | 52.5 | 39.7 | +32% |
| Statutory NPAT | 32.4 | 20.1 | +62% |
| Operating Cash Flow | 83.1 | 65.9 | +26% |
The result demonstrates the effectiveness of Kelsian’s diversified operating model, with performance contributions across all three operating divisions validating the company’s contract indexation mechanisms as a hedge against inflationary cost pressures.
What does Kelsian Group do?
Kelsian Group operates as a global provider of passenger transport and marine services across three core divisions. The company employs over 12,900 people and operates a fleet comprising more than 6,115 buses and 126 vessels, delivering over 384 million customer journeys annually.
Operating divisions:
- Australian Bus: Metropolitan public bus services in Sydney, Melbourne, Perth, Adelaide, and Stradbroke Islands, plus regional/remote services supporting Western Australia’s resources sector and charter operations in the Northern Territory
- International Bus: Government-contracted metropolitan bus services in the UK, Channel Islands, and Singapore; industrial and corporate motorcoach operations in the USA
- Marine & Tourism: Vehicle and passenger ferry services, tourism cruises, charter operations, packaged holidays, and tourist accommodation throughout Australia
Kelsian’s portfolio is anchored by long-term government contracts featuring built-in inflation protection mechanisms. These contracts provide defensive earnings characteristics while offering growth optionality through new contract wins and market expansion. The company positions itself as a leader in low and zero-emission transport solutions.
Divisional breakdown reveals US motorcoach strength and tourism recovery
Australian Bus: contract indexation offsets cost pressures
Revenue benefited from indexation mechanisms protecting against wage, fuel, and parts inflation, though first-half results were impacted by cost pressures from delayed electric bus fleet transitions requiring higher diesel fleet maintenance. In NSW and SA, where investment to improve service quality has been recognised, a programme of improvements was delivered in September 2025.
Key contract wins and extensions included:
- Queensland Ipswich and Logan contract commenced November 2025
- Bankstown Rail Replacement extended through FY26
- Adelaide tram replacement operated successfully August 2025 to January 2026 (44 buses deployed)
- Region 6 NSW extension negotiations on track for 2-year term from 1 July 2026
International Bus: US ramp-up drives standout performance
The US motorcoach division delivered the strongest divisional performance, driven by industrial sector contract ramp-up. Kelsian invested $23 million in growth capital for new motorcoaches to support expanded service levels. Charter operations remained resilient, with several key corporate and tech employee shuttle contracts renewed and expanded under multi-year terms.
Singapore operations commenced the Sentosa Development Corporation contract in October 2025, providing bus services and vehicle maintenance for over 40 buses. The five-year contract (with a five-year extension option) represents Kelsian’s first Singapore contract outside traditional government route services. The Bulim contract was expanded to include four new services.
UK operations achieved a strategic milestone with the acquisition of South Wales Transport (Neath) Ltd in November 2025 for £1.7 million. The acquisition positions Kelsian to target the approximate 10,000 bus regional UK franchising pipeline, representing a material medium-term growth opportunity.
Marine & Tourism: international visitor rebound lifts results
The Marine & Tourism division delivered a solid first-half result, benefiting from continued international tourism recovery. The two K’gari (formerly Fraser Island) resorts showed improved performance following the appointment of 1834 Hotels as manager of operations, sales, and marketing in August 2025.
Positive contributions came from the re-negotiated Mandorah and Tiwi Islands contract in Northern Territory and new vessel capacity in Redland Bay, South East Queensland. The division incurred $4.7 million in repairs and maintenance across vessels in Sydney, Western Australia, and Tasmania. Mobilisation costs for the new Kangaroo Island ferries of approximately $4 million are expected in 2HFY26.
The divisional breakdown demonstrates Kelsian’s ability to generate growth across geographies while managing operational challenges. US industrial exposure and UK franchising represent material medium-term growth catalysts.
$161 million tourism asset sale to unlock shareholder value
Following the balance date, Kelsian entered into binding agreements with Journey Beyond for the sale of its Tourism Portfolio for an enterprise value of $161 million (cash and debt free basis, subject to working capital adjustments). The transaction includes:
- SeaLink Fraser Island (including KBRV Resort Operations and KBRV Services)
- Captain Cook Cruises
- SeaLink Marina
- SeaLink Tasmania
- SeaLink Northern Territory
- Adelaide Sightseeing
- SeaLink Whitsundays
The transaction is subject to conditions precedent including ACCC approval, Foreign Investment Review Board approval, and change of control consents for key contracts. Completion is expected in the second half of calendar year 2026.
The divestment aligns with Kelsian’s capital management review and strategic focus on core public transport operations. The transaction crystallises value from non-core tourism assets while strengthening the balance sheet for reinvestment into higher-return transport contract opportunities.
Upgraded FY26 guidance signals management confidence
Kelsian upgraded its full-year underlying EBITDA guidance to $303 – $312 million (previously $297 – $310 million), reflecting management confidence in execution following the strong first-half result. The guidance assumes no material changes to operating conditions, economic environment, interest rates, currency movements, or business structure.
Management highlighted a strong pipeline of opportunities in existing Australian and international markets, as well as potential entry into New Zealand. The guidance upgrade mid-cycle provides a floor expectation for earnings, reducing uncertainty for investors.
Key dates for shareholders
- Interim dividend: 8.0 cents per share (fully franked)
- Record date: 20 March 2026
- Payment date: 20 April 2026
- DRP election date: 23 March 2026
The Dividend Reinvestment Plan (DRP) is offered to shareholders in Australia, New Zealand, the United Kingdom, Jersey, Canada, and Qualified Institutional Buyers in the United States. Shares will be issued at the average daily volume weighted average market price during the 10 trading days commencing 25 March 2026 with no discount.
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