Helloworld half-yearly results: Value up, revenue down

Helloworld has released its half-yearly results, and we’re still making sense of the figures.

However, we’re going to attempt to break it down for you, so please bear with us as we work through this report on a Monday morning.

First and foremost, Helloworld’s (HLO) Total Transaction Value (TTV) grew by a solid 2.7 per cent.

According to the release, this growth was “underpinned by strong ticket volume growth, partially offset by lower airfare prices caused by airline discounting in Australia and New Zealand”.

While TTV saw growth, however, HLO’s revenue was $164.9 million, a decrease of 3.7 per cent.

The company has said this was “mainly due to the prior comparative period including revenue from the disposed air representation business, disposed company-owned stores and the restructured Insider Journeys business”.

“Revenue decreased by $1.6 million or 1.0% reflecting the continued lower airfare prices and mix change across business units and products,” the company said.

“Operating costs are significantly below the prior comparative period across all segments, mainly reflecting the continued focus on cost reductions initiatives to right size the cost base and reduced costs from disposed operations,” it added.

HLO’s earnings before interest expense, tax, depreciation and amortisation (EBITDA) $35.5m, an increase of $5.5m from the prior comparative period.

There was another growth in the company as well, with The Helloworld Travel retail network, which is comprised of 2,065 members across Australia and New Zealand as at 31 December 2017, increasing by 50 members since 30 June 2017.

According to the release, the wholesale and inbound businesses are also continuing to deliver on key customer and supplier initiatives.

During the current half year, Helloworld Travel has expanded the in-house product range for our retailers to sell including new brochures covering the Maldives, Disney Magic, UK & Europe, Weddings & Honeymoons and Unique Rail Journeys.

The Inbound business is experiencing strong demand from overseas partners for the improved product offerings into the Australia, New Zealand, and Fiji markets.

Australian HLO results

The Australia segment generated TTV of $2,500.5 million in 1H18, representing an increase of 2.1% compared with the prior comparative period.

Revenue decreased by 1.9% or $2.5 million to $127.5 million mainly due to the disposal of operations including the air representation business in January 2017 and the remaining seven company-owned stores in Australia in August 2017.

New Zealand results

The New Zealand segment generated TTV of $417.0 million in 1H18, representing an increase of 8.7% compared with the prior comparative period.

Revenue decreased by 7.1% or $2.1 million to $27.7 million impacted by business and product mix change, the disposal of unprofitable company-owned stores and six-month impact of lost corporate accounts in the prior year.

Operating costs decreased by 6.8% or $1.9 million mainly reflecting the lower cost base from cost reduction initiatives and the removal of costs associated with the disposed company-owned stores.

Rest of World results

The Rest of World segment generated TTV of $50.4 million in 1H18, representing a decrease of 12.7% compared with the prior comparative period.

Revenue decreased by 15.3% or $1.8 million to $9.7 million reflecting the restructure of the Insider Journeys brand and aggressive competitor pricing, with the refocus to more profitable distribution channels.

Operating costs decreased by 20.7% reflecting the re-sized cost base of the Insider Journeys business.

Acquisitions

Helloworld Travel recently announced the acquisition of the Magellan Travel Group, expected to be completed by the end of February 2018 for $32.5 million, to be funded with a mixture of cash and shares.

Email the Travel Weekly team at traveldesk@travelweekly.com.au

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