How SeaLink Travel Group CFO Navigated into the ASX200

It’s been a case of sink or swim for tourism operators amid the pandemic. Quick pivots proved to be a lifeline for SeaLink.

No-one could have predicted that the pandemic would hit tourism operators with such force. But one look at the balance sheet and you can see that ASX-listed SeaLink Travel Group (ASX: SLK) has prospered, with more than 85 per cent of its revenue now sourced from government contracts in a transformative pivot away from tourism in a bid to shore up the company into the future.

At the helm is CFO Andrew Muir, who has navigated company through choppy waters and into unchartered territory as it grows into an organisation with more than 9,000 staff but was rewarded this month as the company secured a place in the S&P Dow Jones/ASX200 index (ASX200).

Muir admits he’s been ‘managing all things corona’ for the past 18 months. Given that restrictions, government support and border closures have been a continually moving beast, it’s been anything but straightforward.

While SeaLink initially relied on JobKeeper at the start of the pandemic, that lifeline has fallen away, and the company has been on its own for many months now. “The banks have been very supportive, and our share price has ticked along nicely,” he says.

About SeaLink

SeaLink is a global business with operations in London and Singapore. CEO Clint Feuerherdt has publicly admitted being a global player was challenging amid a pandemic.

Some quick thinking has saved SeaLink. Its core operations are principally contracted in non-discretionary essential transport services, providing strong financial results despite the hit to tourism during the pandemic.

“We have anticipated, navigated and repositioned to finish with a strong balance sheet that supports our growth and ultimate purpose: to become a world leading in delivering essential journeys through safe and intelligent solutions while creating brilliant customer experiences,” Feuerherdt declared recently.

There’s nothing more certain than tenders in the world of business, and SeaLink has secured those in spades, with a suite of new Australian contracts secured across Queensland, Northern Territory and South Australia. There’s more and internationally, including a large contract that will double the size of operations in Singapore.

Indeed, Muir admits that future-proofing the business has been crucial. SeaLink now counts some of the biggest corporate giants on the landscape among its clients- BHP, Rio Tinto and Fortescue Metals Group. It also has a large organic pipeline of tenders, with Muir awaiting the outcome of a handful of tenders to be announced. 

When the borders are open, demand is strong. But a pandemic, rolling border closures and a distinct lack of tourists has been challenging.

Muir, for one, is banking on the nation’s vaccination target of 70 per cent heralding a return to a more normal existence, bringing with it new business and a return to tourism. That, along with having fingers in many pies.

Radical transition

A big part of the success has been the strong M&A activity. Muir confirmed that M&As is firmly on the agenda.

Early last year, prior to Covid, SeaLink acquired transport company Transit Systems, which paved the way for financially secure transport sectors while tourism was hit by the pandemic. 

Then there was the acquisition of Go West Tours for $AU84.7 million plus an earn-out component of up to $AU25 million, completed in July this year. The buy-out included the purchase of three properties and diversified the company’s portfolio to provide a platform into the resources sector.

Established over 35 years ago, Go West is one of the largest specialist bus operators serving the resources sector in Western Australia, with around 287 buses across nine depots and around 180 employees.

Go West has enjoyed strong growth in recent years, winning multi-contracts with leading mining companies and other regional services such as school bus transfers. The company generated approximately $AU46.2 million of revenue in the 12 months to 30 September 2020, with an attractive tender pipeline of new contract opportunities in WA.

Muir admits that London operations have been hardest hit. Looking for solutions to major problems has filled a lot of his time. “It’s been challenging, but we’re performing very well. The problem is that we can’t get our boots on the ground there due to border closures, which hasn’t been great.”

But SeaLink has been able to achieve strong results regardless of this. The company’s financials reveal that it achieved a statutory Net Profit after Tax (NPAT) of $37.8 million for the 12-month period ended 30 June, 2021.

“We’ve gone through some massive challenges and we’re in pretty good shape.” 

Who is Muir?

Muir, who began his tenure with Sealink Travel Group in 2017, is a chartered accountant and holds a Master of Business Administration with substantial experience across ASX-listed and non-listed companies in a range of industry sectors.

Prior to SeaLink, he was a consultant to investment company E&A Limited, having re-joined that company in 2015. Prior to this he held various financial and commercial senior management positions, including ASX-listed Hills Limited as group general manager of Business Development between 2003-2008, and then CFO and company secretary between 2008-2011 after his role as a director of E&A Limited between 1998 and 2003.

When starting with the travel company, Muir also bought extensive experience in strategy and planning, debt and equity markets, mergers and acquisitions and leadership of cost reduction programs. He replaced long-serving CFO Trevor Waller, who retired.

Further growth is on the cards, which means Muir is keeping an eye out for new finance talent to join his team. SeaLink is actively hiring for a number of roles in the finance team, with different skillsets and capabilities.

“I need to have a good finance team underneath me, and that takes time. It’s a tight labour market, so talent is snapped up pretty quickly,” he says.

Meanwhile, SeaLink has is sights set on greener travel in the future. It placed the nation’s largest ever order for electric buses, rolling out 37 new electric double decker buses to support key routes around London.

It has also ordered Australia’s first two hydrogen fuel cell buses. By the end of FY22, SeaLink expects to be operating at least 55 zero emission buses in its Australian fleet.