Helloworld gaines a profit
Helloworld has wrapped up the financial year an adjusted profit before tax of $6.9 million, a solid jump up from the FY14 loss of $1.7 million.
The Group’s Loss before tax sat at $198.4 million, and includes a non-cash goodwill impairment charge of $205.3 million.
Helloworld’s balance sheet had included a number of intangible assets which arose from a number of legacy transactions including the 2010 merger of Stella Travel Services Pty Ltd and Jetset Travelworld Limited.
“We’ve turned our operating loss from last year into an operating profit which we’re very pleased with,” helloworld ceo Elizabeth Gaines told Travel Weekly.
“We’ve maintained revenue margins, had an operating cost inflow as opposed to an operating cost outflow last year, and our brand awareness has tripled.”
“And while TTV was down 3%, if you look at the second half of FY15 compared to FY14 it was up2%, so we’re generating a positive momentum.”
The Board determined and announced in early August 2015 that based on a number of factors it was prudent to write down the goodwill balance and incur a non-cash impairment charge of $205.3 million.
The Group achieved an Adjusted EBITDAI of $27.5 million, including the ongoing investment in building the helloworld brand and the investment in helloworld.com.au.
“We always want to stay abreast of the industry,” Gaines told TW.
“We’re very focused on cost and technology and delivering online, and we provide strong B2B tools for agents.”
Gaines also told Travel Weekly that more store rollouts and refreshes will continue for the next financial year as a way of improving on this year’s results.
HLO’s operating expenses for the financial year sat at $251.8 million, almost unchanging from the previous year, which reflects its continued focus on cost containment and growth opportunities.
“Our research shows travellers are five times more likely to use an agent for more complex bookings,” Gaines said in the media release.
When asked about how much of this market helloworld can capture, Gaines told Travel Weekly it comes down to handpicking the best agents, adding market share wasn’t something the company discloses.
“For us it’s about having the best agents and if we continue to deliver strong value propositions we will continue to grow,” she said.
“When a helloworld agent gets a customer they generally get a customer for life.”
The key business achievements from the previous year included the bricks and mortar network of high calibre agents, which on a like for like basis generated a Total Transaction Value in line with the prior year, which Gaines says is a pleasing result given market conditions.
Helloworld was also appointed by QBT as sole provider of travel management services for Whole of Australian Government, with the appointment the key driver of the Travel Management segment’s Revenue increase of 10% from the prior year.
Brand awareness is on the up compared to previous years, and the National Travel Industry Awards seemed to reflect a strong brand, with 75% of both agent and agency award winners coming from helloworld.
There was also strong growth in helloworld.com.au as it continues with Hotel and Air TTV, up 245% and 95% respectively in the second half of the year.
The wholesale segment sagged slightly with a TTV of $667.1 million, down 6% from the previous year, however a continued focus on cost management, primarily through employee cost savings, and ongoing investment in technology to boost productivity are integral to its strategy, according to Gaines.
Quizzed about whether anything could have been done differently to improve on the year’s results, Gaines told Travel Weekly that “costs have been contained” and they were pleased with the outcomes.
“We delivered a profit, turning around from a loss and this was a critical goal for us,” Gaines said.
“We’ve seen a very positive momentum and this indicates a strong future for the brand.”
“What we find is that if you deliver a strong product and market a strong product, customers will be asking for it,” Gaines said.
“We have continued to make strong progress in our strategy to future-proof our business to drive results for our shareholders, agents and customers.”
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