Kelsian Group Simplifies Its Way Into Reliable Government Contracts

Explosive US bus division growth drove an earnings upgrade, and now Kelsian Group is divesting tourism assets to focus on reliable government transport income.

4 Sep 2026 · 2 min read

Kelsian Group delivered a stronger than expected first-half result driven by explosive growth in its US bus division, then simplified its business model by divesting Marine and Tourism assets to focus on reliable government transport contracts, strengthening the balance sheet for further US and UK acquisitions.

Strong US-driven growth upgrades earnings guidance

Yarra Capital Management, overweight, said the bus and tourism provider had a stronger than expected first-half FY26 result, leading to an upgrade in FY26 earnings guidance, underpinned by the US bus division, which drove international reported revenue growth of 21 percent year on year and EBITDA growth of 47 percent, remaining positive as it believes the bus businesses in Australia and the US will continue generating earnings growth.

The stronger than expected 1H26 result was underpinned by the US bus division which led to international reported revenue growth of +21% y/y and EBITDA growth of +47% y/y. We remain positive on KLS as we believe the bus businesses in Australia and the US will continue to generate earnings growth.

— Yarra Capital Management, Monthly Report, February 2026

A simplified business focused on reliable government contracts

Medallion Financial held at hold, describing a business much more simplified than it used to be, having essentially got rid of its tourism-linked assets and now focusing primarily on large government contracts that provide pretty reliable income, arguing even the oil price exposure is overblown given many government contracts factor in these kinds of costs, with actual expenses recovered when the reset comes at the end of each half year. Wilson Asset Management described Kelsian as a global bus and ferry transportation business, noting that following the divestment of its Marine and Tourism business, expected to settle in coming months, Kelsian will have a stronger balance sheet and increased capacity to pursue acquisition opportunities in growth markets such as the United States and United Kingdom, believing the company has the potential to deliver double-digit earnings per share growth.

Following the divestment of its Marine and Tourism business, which is expected to settle in the coming months, Kelsian Group will have a stronger balance sheet and increased capacity to pursue acquisition opportunities in growth markets such as the United States and United Kingdom. We believe the company has the potential to deliver double-digit earnings per share growth.

— Wilson Asset Management, Annual Report, June 2026

A well-managed transition draws fresh buying

Fundamental Investment Management said it bought Kelsian Group, a specialist transport and logistics company, after the company reported a very solid result, showing it was managing rising fuel costs well and confirming it was close to finalising the sale of non-core tourism assets.

What fund managers say they are watching next is completion of the Marine and Tourism business divestment, delivery of double-digit earnings per share growth once the balance sheet strengthens, further US and UK acquisition opportunities, and continued management of fuel cost pass-through mechanisms in government transport contracts.