SLOW SALES CAUSE WOTIF PROFIT DROP

Written on the 26 March 2013

SLOW SALES CAUSE WOTIF PROFIT DROP

The Wotif Group (WTF) this morning announced a half-year profit of $27.5 million to December 31, down 4.6 per cent on the corresponding period last year.

Australia’s leading online travel company today announced its EBITDA (earnings before interest, tax, depreciation and amortisation) was down 6 per cent.

Modest gains in Australia and New Zealand accommodation and solid gains in Australian flights were offset by 19 per cent falls in accommodation revenue in Asia and the rest of the world.

Transaction values were flat compared with the prior corresponding period, but were up 5 per cent on the immediately preceding six months to 30 June 2012.

Recently appointed WTF CEO Scott Blume said the results reflected mixed performance by the individual lines of business.

“This was a positive performance considering the continuing strength of the Australian dollar and the lacklustre domestic retail environment, which continues to stimulate international travel,” said Blume.

Blume said a 6 per cent increase in marketing, web maintenance and headcount costs also impacted the overall profit result.

However, he considers these pivotal in positioning the company for future growth.

The company will focus on ways to leverage its internal intellectual property in the online space to benefit stakeholders over the coming months.

“Our next stage of growth is continuing to ensure our customers have an outstanding onsite and support experience with our teams.”

WTF, which currently sells 10 per cent of all Australian accommodation, also expects that increasing its commission from hotel suppliers to 11 per cent will be a profitable move.

The initiative became effective 1 January 2013 and will continue to be phased in as existing supplier contacts expire.

Blume assures WTF will continue to be the lowest online distributer to hotel suppliers compared to comparable online players.

An 11.5 cent interim dividend per share was announced by the company on releasing its results.

The share price fell following the announcement, down 5 per cent on the previous day’s close to $5.49 this afternoon.


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