Travel Agents

Helloworld hits $21.5m profit, up 1,116% on FY16

Hannah Edensor

Helloworld Travel Limited’s end of financial year results are in, and the group landed itself with a net profit after tax of $21.5 million.

This figure is a huge increase on last year’s net profits of $1.7 million, with the profits leaping by 1,116 per cent – or $19.8 million.

The NTIA Agency of the Year has hit a number of targets in 2017 that have contributed to its positive results, including the implementation of $18.6 million merger synergies and annual cost savings by June 30, outperforming their previous annual savings target of $17.1 million.

It also grew its Total Transactional Value (TTV) to $5.9 billion, achieved solid revenue growth of 8.6 per cent to $326.4 million via TTV growth and margin improvement through the full year impact of the AOT businesses, as well as better supplier and partner contracting.

The company rebranded this year to go back to its roots, changing to ‘Helloworld Travel’, with the addition of ‘’The Travel Professionals’ to their image, and investments into Hunter Travel and QLD-based agencies.

“Helloworld Travel Limited has successfully implemented a significant business turnaround,” CEO and Managing Director, Andrew Burnes, said.

“We have continued to focus on implementing key technology initiatives to further align our bricks and mortar franchise network with online distribution platforms, creating an integrated ‘clicks and mortar’ travel solution.

“We have strengthened the relationship with our member networks, invested in new consumer marketing, advertising and sponsorships, and through our successful rebrand to Helloworld Travel – The Travel Professionals with a new tagline, jingle and in-store branding.

“Our recent rebrand was very well received by members, gaining immediate traction with eight stores converting to fully branded Helloworld Travel outlets in July 2017.”

In December 2016, Helloworld acquired 50 per cent of Mobile Travel Agents (MTA) for cash consideration of $13.9 million, allowing for home-based travel consulting services throughout Australia.

The investment provides Helloworld with a significant footprint in a sector that’s experiencing solid growth right now, especially after Flight Centre’s acquisition of Sydney-based Travel Partners, and a NZ mobile agency network.

From an Australia perspective, results reflect strong improvement in margins, productivity and right sizing of cost base, while NZ has delivered strong revenue growth from its wholesaler brands and larger retail member network.

The retail network has increased to over 2,000 members across ANZ segments, which factors in the addition of MTA in Australia and WTG in New Zealand.

For 2018, Helloworld expects preliminary earnings to sit in the range of $63 to $67 million, following this year’s EBITDA of $55.2 million.

The group said, “The outlook for Helloworld Travel is positive.

“Business fundamentals are heading in the right direction in all our key segments with demand for our integrated service offering continuing to develop and grow.”

In corporate business, QBT in Australia secured new account wins in the NT Government and PwC during the 2017 financial year, while in August, AOT Hotels successfully re-tendered the whole of Australia contract for accommodation program management.

Segment Performance

The TTV in Australia sat at almost $5 million in FY17, while revenue increased by nearly nine per cent to $243.6 million, reflecting the inclusion of AOT business, including Sunlover Holidays, AOT Inbound and AOT Hotels.

Helloworld acknowledged this revenue was “partially offset by the exit of our previous unprofitable relationship with Orbitz involving our online channel”.

NZ’s TTV was up 3.4 per cent to $849 million, while revenue was up 15 per cent.

Looking at Helloworld’s segments in the rest of the world, and the TTV declined just under nine per cent to $114.5 million. Revenue was also down by six per cent, reflecting the refocus of distribution methods used in the Insider Journey’s business.

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