Helloworld Travel Limited has announced a full end of year result for FY19 with a profit of $54.5m – a 21% increase on last year.
In what is another year of profitable growth, TTV (total transaction value) grew by 9.1% to $6.5 billion helped along by the full-year impact of business acquisitions undertaken last year including the Magellan Travel Group, Flight Systems and Asia Escape Holidays and the addition of Show Group acquired in December 2018.
Total revenue was $357.6 million, an increase of $31.9 million or 9.8% versus last year.
As a final 30 June 2019 result – Profit before tax was $54.5 million, an increase of 21.0% or $9.5 million compared with the prior year.
For shareholders, earnings per share grew by 20.7% to 31.5 cents, which enabled the declaration of a final dividend of 12.5 cents per share. This brings the total dividends declared to 20.5 cents per share, an increase of 2.5 cents per share or 13.9% from the prior year.
The company says costs (excluding acquisitions) were successfully lowered from the prior year as the business “continued its focus on key strategic marketing initiatives and other initiatives to deliver efficiencies and cost control.”
At the time of writing this article, shares were up 2.5% today, trading at $4.49.
Here’s the breakdown of highlights and the outlook ahead.
What were the FY19 Highlights?
- The Helloworld Travel retail network expanded to 2,447 members as at 30 June 2019 included the opening of 30 new Helloworld Travel branded agencies across Australia and New Zealand.
- Helloworld New Zealand network alone grew by 207 members led by the additions of large associate members Gilpin Travel, Barlow Travel, Atlas Corporate Travel and the NZ Travel Brokers group.
- Acquisitions of the Show Group business in Australia and Williment Travel Group in New Zealand complemented the existing Helloworld Travel portfolio.
- Relaunch of wholesale agent platform ReadyRooms and new cruise platform well received by agents with sales increasing significantly compared with the prior year.
- Magellan Travel Group and MTA continue to perform and contribute strongly to the Group’s results.
- QBT secured a two-year extension for providing travel management services to the Whole of Australian Government as well as over $50 million TTV secured in new corporate account wins including the South Australian Government and Australia Post.
- The company built on Helloworld Travel’s brand presence in Australia and New Zealand via increased investment in consumer advertising and strategic partnerships including the launch of the Helloworld TV show and platinum media partnership with News Corporation.
- Helloworld Travel sold its Insider Journeys business on 30 June 2019 for $2.4 million as Insider Journeys was not considered core to Helloworld Travel’s operations, nor future business direction.
What’s the FY20 outlook?
- Helloworld says that travel industry continued to grow strongly during the past year in all segments in which the Group operates, however, the growth rate slowed in the final quarter of FY19.
- Economic growth both domestically and globally, is expected to continue but at more moderate rates and this may flow through to the travel markets in which Helloworld Travel operate. Lower growth and inflation estimates have resulted in a reduction in interest rates, which may provide a stimulus to the economy and increase household incomes.
- Helloworld TV and enhanced marketing are proving successful with significant increases in Helloworld Travel’s brand recognition and awareness. Over the past two years, prompted awareness has increased from 60% to 71% and unprompted awareness increased from 22% to 31% in Australia while in New Zealand, prompted awareness increased from 25% to 68% and unprompted awareness increased from 9% to 26% over the past three years.
- The Group focus in FY20 will be on continuing to grow our TTV, revenue margin and EBITDA margin. The Group expects to benefit in FY20 from its current investments in technology developments, enhanced travel platforms, expanded product offerings and increased brand recognition.
For the full annual report and more financial information on HLO, click here.
Find out more: www.helloworldlimited.com.au
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