JTG merger synergies set profits soaring

JTG merger synergies set profits soaring
By admin

Jetset Travelworld Limited has recorded pre-tax profits of $16.5 million for the half year to December 31, climbing 157% over the period which saw the completion of its merger of
Jetset Travelworld and Stella Travel Services.

Chief executive Peter Lacaze described the result as “pleasing” in the face of obstacles such as lower airfares, a volatile Australian dollar and disruptions caused by industrialaction against Qantas. He attributed the strong result to synergies afforded by the “complex” merger, with expenses $7.8 million lower than the period prior, down 5%.

“The merged group has created a solid foundation for future growth with a lower operating cost base which is key to navigating through changeable industry conditions,” he said.

The continuing trend for outbound travel on the back of the strong dollar saw the retail arm of the business increase Total Transaction Value (TTV) by 18% to $2 billion, with online trading subsidiary Best Flights conducting 20% more transactions year on year, while cruise arm Best Cruises saw transactions increase 17%.

Meanwhile, its wholesale segmentrecorded growth of 55% to $439.5 million for the period, despite a short term reduction in sales volumes for the Qantas Holidays brand due to Qantas Airways’ disruptions.

“This impact is contained to the first half results and is not expected to have an ongoing impact on Qantas Holidays volumes,” a group statement said.

Its travel management TTV climbed 61% to $375.5 million for the six months, during which time subsidiary QBT underwent a “significant transition” of its transacting system Amadeus. QBT also experienced some effects of the Qantas saga, resulting in some short term costs being incurred.

Uncertain economic conditions made it difficult to predict the outlook for 2012, Lacaze claimed, but he anticipated strong results for the full year to June 30, 2012 as outbound and domestic travel continued to grow. 

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