Acquisitions and cost-cutting lifts Helloworld to third consecutive year of growth

Written on the 21 August 2018 by Paris Faint

Acquisitions and cost-cutting lifts Helloworld to third consecutive year of growth

A year peppered with acquisitions has put the wind beneath Helloworld's (ASX: HLO) wings as the travel company today revealed a full year profit (NPAT) of $32 million, up 48.1 per cent.

While revenue remained flat, earnings before interest, tax, depreciation and amortisation (EBITDA) and earnings per share (EPS) were up 18.2 per cent and 44.1 per cent respectively as the company significantly reduced its operating costs.

This marks the third year in a row that NPAT, EBITDA and EPS have all increased by a significant margin.

Helloworld's network grew to more than 2,200 members across Australia and New Zealand over the past year, largely due to its acquisition of the Magellan Travel Group in March.

Shortly after acquiring Magellan, Helloworld went on to secure a 100 per cent stake in online flight booking service Flight Systems in April and 60 per cent of Keygate holdings, an outbound travel wholesaler based in Perth, in May.

"Helloworld has made a number of strategic investments during the current year, amounting to $40 million for businesses acquired and $2.2 million for other equity investments," says the company in a statement.

"The acquisitions complement the group's existing businesses, expanding future product offerings to an increased network of agents, suppliers and customers."

According to Helloworld, the travel sector is continuing to grow in all areas where the company has a foothold.

Economic growth is expected to continue both at home and overseas, creating a large incentive for more international tourist arrivals.

"International tourist arrivals to our markets have consistently outplaced global economic growth and all indications are that this trend will continue," says the company.

At the time of writing (11:01am AEST), Helloworld shares are trading up 3.8 per cent at $4.82.

The company has declared a final dividend of 11 cents per share.

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Business News Australia

 
Author: Paris Faint

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