SCOTTSDALE, Ariz. - Viad Corp (NYSE: NYSE:VVI) has announced an agreement to purchase the Jasper SkyTram, a popular tourist attraction in Jasper National Park, for CA$25 million (approximately US$18 million). The deal, awaiting Parks Canada's approval, is expected to finalize in July. The acquisition will add to Viad's Pursuit collection of experiences in iconic destinations.
The Jasper SkyTram, celebrating its 60th year, is a unique aerial tramway offering panoramic views of the national park. In 2023, it attracted over 130,000 visitors and features amenities like an interpretive boardwalk and hiking trails. Viad anticipates the attraction to contribute around $4 million in revenue in 2024, with an EBITDA margin that will be accretive to Pursuit's overall margin.
Steve Moster, Viad's CEO, expressed enthusiasm for the strategic addition to their Banff Jasper Collection, citing the SkyTram's competitive edge and consistent demand. David Barry, President of Pursuit, highlighted the SkyTram's potential and the company's plans to revitalize the attraction in collaboration with the local community and Parks Canada.
The transaction also includes a renewable long-term lease with Parks Canada, with nearly 30 years remaining. Viad's business strategy focuses on delivering extraordinary experiences and sustainable growth, with the Jasper SkyTram expected to enhance its portfolio of global attractions and hospitality services.
In other recent news, Viad Corp has reported a positive start to the year, with a 4.9% increase in first-quarter revenue, amounting to an additional $12.7 million compared to the same period last year. The company's subsidiary, Pursuit, contributed significantly with a 14% increase in revenue and the successful launch of FlyOver Chicago.
Viad Corp is projecting a substantial growth in adjusted EBITDA of 16% to 30% for the full year. The company's liquidity remains strong at $137.2 million, and they have reduced annual interest costs by over $2.5 million through a successful repricing of their Term Loan B. Viad's full-year guidance remains firm, with consolidated adjusted EBITDA expected to be between $171 million and $191 million. Despite the slow recovery of Chinese tourism, Viad Corp is optimistic about its ability to attract visitors from other markets. The company is also looking at a strong pipeline of investment opportunities for future growth.
InvestingPro Insights
Viad Corp's recent move to acquire the Jasper SkyTram aligns with its strategy to expand its Pursuit collection of experiences. As they prepare to integrate this new asset, it's insightful to consider Viad's financial health and market performance to understand the potential impact of this acquisition.
InvestingPro data highlights that Viad's market capitalization currently stands at $717.3 million, indicating a solid company size within its sector. Despite a high Price/Earnings (P/E) ratio of 361.81, which suggests a premium market valuation, analysts are optimistic about the company's income prospects. An adjusted P/E ratio for the last twelve months as of Q1 2024 shows a slightly lower but still elevated figure of 244.81, possibly reflecting these positive expectations.
Moreover, Viad's revenue growth over the last twelve months as of Q1 2024 was a moderate 3.36%, with a quarterly increase of 4.87% in Q1 2024. This steady growth trajectory may be further bolstered by the new revenue streams from the Jasper SkyTram. However, the company's gross profit margin stands at 8.44%, which is relatively low and aligns with an InvestingPro Tip indicating weak gross profit margins.
InvestingPro Tips also reveal that analysts have recently revised their earnings upwards for the upcoming period, suggesting confidence in the company's financial future, particularly in light of the new acquisition. Additionally, while Viad does not pay dividends, its focus seems to be on growth and profitability, with the company being profitable over the last twelve months and analysts predicting continued profitability this year.
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