The Experience Co Ltd (ASX: EXP) share price is flying higher in morning trade, up 17.24% at the time of writing to 17 cents.

Experience Co is a provider of adventure tourism and leisure experiences in Australia and New Zealand. These experiences include skydiving, island day trips, and reef tours. The company’s operations are located predominantly on the eastern seaboard of Australia from the Great Ocean Road in Victoria to Queensland’s Port Douglas. It also has skydiving operations in Queenstown, New Zealand.

Despite getting off to an impressive start after listing in 2017, Experience Co shares haven’t had the best run on the ASX to date – falling from around 88 cents in December 2017 on the back of weak tourism conditions, poor weather events, and the resignation of its CEO.

Why has the Experience Co share price bounced today?

This morning, Experience Co released a market update in regard to the impact of COVID-19 on its operations. The company had previously announced the indefinite suspension of all operations on 23 March.

According to today’s release, operations have resumed at Experience Co’s Queenstown skydiving drop zone. The company is also aiming to resume operations at a number of Australian-based drop zones during June.

On the whole, experiences will be activated on a breakeven basis, staged over the coming months in line with the relevant jurisdictional lifting of restrictions.

In terms of financial stability, the company believes it is well-positioned to sustain an extended period of hibernation with $10 million cash on its books as at 30 April 2020. It also has an additional $15 million undrawn capacity on its debt facility with National Bank of Australia Ltd (ASX: NAB) and facility agreement waivers in place in relation to covenant testing for the 30 June 2020 testing period.

Assuming operations are suspended and there are no material changes in market conditions, Experience Co is anticipating its minimum monthly net cash outflow to average approximately $1 million per month to 30 September 2020.

As for wages, the company has triggered job subsidy programs in both Australia and New Zealand. The respective programs have been implemented for 360 eligible employees in Australia and 78 employees in New Zealand. Meanwhile, senior executives and board members have taken a 30% reduction in remuneration until 30 June 2020.

Experience Co has also been supported by lease cost relief with the co-operation of its landlords. As a result, monthly lease expenses through a combination of waivers and deferrals have been reduced. This includes 100% rent relief for Ports North and fees and charges in its Great Barrier Reef business until 31 December 2020.

Looking forward, Experience Co noted the continuation of its strategy for business simplification. It described the divestment of its Hunter Valley and Byron Bay Ballooning businesses as “well progressed” and cited other surplus asset sales processes are ongoing.

Additionally, Experience Co highlighted that good headway has been made on business process projects. This includes implementing a new reservations system for the skydiving business and process improvements across corporate functions.

Management commentary

Commenting on today’s update, CEO John O’Sullivan said:

“The EXP team has been working extremely hard to design and implement COVID-19 operational processes and procedures since the Australian and New Zealand Government regulations came into effect. We are cautiously excited about recommencing our operations all the while recognising that the emergence is likely to be protracted and will require a sustained level of resilience across the business. Our goal remains to maintain a viable business and balance sheet, positioning EXP for when conditions improve.”

“At the time of suspending operations we noted that we were not in a position to forecast with any level of certainty the duration nor recovery profile from this pandemic. This remains the case and our continued strategy is to minimise short-term cash outflows,” he added.

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Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of EXPERNCECO FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Telstra Corporation Ltd (ASX: TLS) share price has slumped lower in 2020 but where is it headed in the next year?

What’s been happening with Telstra in 2020?

It’s been a bit of a rollercoaster for Telstra shareholders in recent years.

In fact, the Aussie telco’s share price has shed over 48% in the last 5 years including nearly 10% this year. However, the S&P/ASX 200 Index (ASX: XJO) is down 11.58%, at the time of writing. This means Telstra is actually outperforming right now.

Notwithstanding, the recent share price falls are largely as a result of increased competition from NBN Co which has hit Telstra’s earnings hard.

Telstra has also changed its dividend policy in recent periods. This comes after having famously paid out close to 100% of profits throughout the 2000s.

This change, along with the coronavirus pandemic, has spooked investors and sent the Telstra share price tumbling. That means the Aussie telco could be in the buy zone at $3.22 per share.

I think the current climate could accelerate Telstra’s transformation plans. The Telstra 2022 strategy was designed to slash costs and make Telstra into a more focused, efficient telco.

While COVID-19 has thrown a spanner in the works for those plans, Telstra services are still in high demand. More workers at home is increasing the need for mobile infrastructure and stronger networks. 

That’s good news for Telstra and could help maintain earnings when August rolls around.

Will the Telstra share price climb higher?

The Telstra share price is sitting at $3.22 per share which is a far cry from its 52-week high of $4.01. Things are clearly different compared to the start of the year but Telstra is still a strong ASX dividend share with a current yield of 3.15%.

No one knows exactly where the telco’s share price will be in the next 12 months. I think the 5G network is the key to the telco’s success over the medium to long-term.

If Telstra can corner the market with this, its share price could be on the rise by May 2021. However, there’s still strong competition and a challenging market which means there’s plenty of uncertainty ahead this year.

Foolish takeaway

I think the Telstra share price could outperform the S&P/ASX 200 Index in 2020 and continue to be a strong dividend share next year.

More reading

• Why you shouldn’t fear an ASX share market crash
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Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Blackmores Limited (ASX: BKL) share price has returned from its trading halt and is pushing higher.

At the time of writing the health supplements company’s shares are up 2% to $80.50.

Why was Blackmores in a trading halt?

Blackmores requested a trading halt on Wednesday while it undertook a capital raising which aimed to raise up to $117 million.

These funds were being raised to strengthen its balance sheet and liquidity position, support its activities in the Asia market, and invest in its efficiency program.

This morning the company revealed that it has successfully completed the $92 million fully underwritten institutional placement component of the capital raising.

Blackmores has issued approximately 1.3 million new shares to institutional investors at a price of $72.50 per share. This represented an 8% discount to its last close price.

The company revealed that the placement generated significant interest from existing institutional shareholders and other institutional investors.

Blackmores Chief Executive Officer, Alastair Symington, commented: “We are pleased with the demonstration of support shown by our institutional shareholders and other institutional investors for the Placement. We believe our capital management initiatives put us in a position of strength to focus on our strategic priorities and help us achieve our objective of returning Blackmores to sustainable, profitable growth.”

The company will now push on with its share purchase plan. This aims to raise a further $25 million. Eligible shareholders can apply for up to $30,000 of new shares.

Trading update.

In case you missed it, on Wednesday the company also provided the market with an update on its performance during the pandemic.

While Blackmores has experienced a material increase in demand for its immunity products, this has been offset by weakness in other areas of the business.

Nevertheless, the company remains on track to achieve its guidance for FY 2020. It expects underlying net profit after tax to be $17 million to $21 million this year.

Although this will be a massive year on year decline, management appears optimistic that better days are coming thanks to this capital raising.

More reading

• 5 things to watch on the ASX 200 on Thursday
• ASX 200 edges down, bank share prices fly
• Why the Blackmores share price is in a trading halt
• 2 quality ASX shares to buy for long-term growth
• ASX shares and investing trends that could boom post COVID-19

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Blackmores Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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