Cairns will come good eventually. It has something that no other location on the planet can offer. and this business has an exclusive 'licence' (or sorts) to leverage it.
Skydiving business is effectively a monopoly. It will periodically get hit with bad weather events. it is what it is. This will always happen - so what, earnings are earnings, they will fluctuate, but over time this business will produce a hell of a lot of them (as it did this half, amongst the midst of the worst possible hit to tourism?).
Prior management operated these assets exceptionally poorly & burned a lot of (prior holders) equity. current management have been hit with terrible external factors outside of their control. But not a thing has changed re the long term earnings power of these core quality assets. And their balance sheet is strong enough to survive years of prolonged downturn (which I don't think will occur, but there's a margin of safety).
In the interim, the consolidated entity is still producing sound free cashflows.
Short term focus by the credulous = long term gains for the sound thinker.
This one may well hit its peak capitulation, and I look forward to gobbling up as many of these bargains as I can.
EXP Price at posting:
20.5¢ Sentiment: Buy Disclosure: Held
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