Bushfires on Kangaroo Island hindered the performance of the $209 million Lennox Australian Small Companies fund during January as a result of lower tourism numbers.
Writing in a monthly update, managers James Dougherty and Liam Donohue said the fund’s largest detractor from performance came from an overweight position to tourism company SeaLink Travel Group.
Shares in the ferry company, which offers travel to South Australia’s Kangaroo Island as well as other destinations, fell 10.6% during January.
“Shares in SeaLink fell 10.6% during the month on the back of fears that the bushfires around Australia (particularly Kangaroo Island) and the decrease in tourist numbers due to the coronavirus would negatively impact earnings. Since SeaLink acquired [public transport firm] Transit Systems, it has reduced its exposure to tourism.”
The company was also a smaller detractor for Lennox’s $13 million Australian Microcap fund.
The dual impact of the bushfires and the coronavirus was expected to weigh on companies’ performance this reporting season, although the managers acknowledged many companies had already been downgraded.
“We expect many companies will report an in-...