JTG sees TTV tumble as review continues

JTG sees TTV tumble as review continues
By admin

Jetset Travelworld has reported a decline in pre-tax profits of 9.5% to $14.9 million amid a sharp fall in total transaction value (TTV) and revenue.

Retail TTV in the six months to December 31 dropped 9.3% to $1.8 billion while the wholesale sector tumbled more than 14% to $337.3 million.

The Travel Management division fared even worse with TTV down 18.6% to $305.8m and an EBITDAI loss of $1.8m, significantly up on the $732,000 deficit in the previous corresponding period.

Profit after tax attributable to members fell almost 23% to $8.6m.

The result came as the company said the development of "long term strategic options" was well advanced. A "

Chief executive Rob Gurney insisted that a detailed review of the business over the past six months has proved that it "has a key role to play in the growing and dynamic travel industry".

"We remain focused on transforming the business to build new capabilities and better leverage the existing assets to establish a platform for long term success," he said.

Franchisees, members and suppliers will be consulted via a "clear plan for engagement" between March and June.

Gurney said the financial results were in line with expectations and reflected a continuing decline in average selling prices and a cut in Government spending in the Travel Management sector.

Overall TTV fell 11% to $2.5b despite the number of domestic and international air transactions rising 5% and 6% respectively. Revenue slipped 8.8% to $171m.

But Gurney said cost cutting measures, including the loss of 110 jobs, 60% in the Travel Management division, have helped streamline operations.

"The restructure has been accelerated and further cost reduction initiatives have been implemented in the retail segment in the first half of FY13," he said. "The outcome of these initiatives is that operating costs have decreased by over 10% in the first half."

Turning to the future, Gurney said "substantial progress" has been made in its "business transformation" review.

Many initiatives "are still in their infancy" and the full cost and timing of implementation remains unknown.

Among the key objectives outlined by Jetset Travelworld are to better leverage the group's scale, develop deep consumer insight, build a digital and multi-channel capability and provide a compelling offer for franchisees and suppliers.

"The assessment of the strategic options available to JET has been thorough and comprehensive," Gurney said. "We will continue to thoroughly test the strategic options and initiatives with key stakeholders through personal engagement with franchisees and major suppliers.

"The extent of the transformation envisaged is expected to deliver long term benefits in the dynamic and growing travel market."

Adjusted EBITDAI in the retail sector fell 2.6% to $32.4m while revenue margin climbed from 5.1% to 5.4%. Costs reduced by 5.8%.

Wholesale adjusted EBITDAI declined 4.5% to $5.5m with revenue margin up from 13.2% to 13.7%.

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