)
Helloworld Travel (ASX: HLO), capitalising on an upswing in holidaymakers putting their travel plans in the hands of professionals, has posted an emphatic return to underlying profit in FY23 as travel volumes more than doubled.
The global travel agency group’s underlying EBITDA of $44.1 million is up from a $10.6 million loss in FY22.
While the bottom-line net profit after tax is sharply lower at $17.36 million, compared to $89.8 million in FY22, the previous result was supported by a $117 million gain from the $175 million sale of its corporate travel division to Corporate Travel Management (ASX: CTD).
Helloworld has reported another strong year of growth in total transaction value which rose 138 per cent to $2.56 billion. That led to an increase in revenue of 139.5 per cent to $165.9 million, which was bolstered by higher commission margins.
The Melbourne-based company says agencies and brokers across the Helloworld networks have reported the demand for their services was ‘extremely strong’ across FY23, with the momentum continuing into FY24.
“The post-pandemic recovery has seen more travellers than ever benefiting from using their local travel professional, with most agents across our networks reporting FY23 as a very busy year,” says the company.
“We entered FY23 with several international borders still closed, but with their reopening we have seen continued growth, subject to normal seasonality, throughout the year.
“As travel recommenced, travellers visiting friends and relatives was the predominant reason for travel; however, over time the prominence of leisure-based travel has steadily increased.”
Helloworld is forecasting continued improvement in booking volumes this financial year as capacity returns to normal and Asia fully reopens.
Despite the sale of its corporate travel business, Helloworld’s FY23 profit was supported, to some extent, by a raft of new acquisitions including a further 15 per cent stake in the Entertainment Logistix business, bringing the company’s interest 85 per cent.
Helloworld recorded strong revenue growth in the transport, logistics and warehousing division in FY23 following a resumption of international concert tours to Australia.
In April this year, Helloworld wrapped up its acquisition of a 34 per cent of Australiareiser Group, the largest specialist travel wholesaler from Scandinavia to Australia, New Zealand and the South Pacific.
The current year is set to benefit from the buyout of Express Travel Group, which was completed in August. Express Travel Group operates an air ticket consolidation business, retail travel networks and cruise and package wholesaling in Australia and New Zealand.
Also in August, Helloworld completed the acquisition of 40 per cent of South Australian-based travel agency group Phil Hoffmann Travel.
Helloworld notes that the wholesale and inbound destination management businesses experienced a solid rebound in FY23, with revenue up more than 130 per cent.
“Growth is expected to continue in the wholesale business across Australia and New Zealand in FY24 as we have our first full year without border restrictions,” the company says.
Helloworld is banking on further growth in FY24 driving underlying EBITDA to between $64 million and $72 million, aided by the new acquisitions.
If airline capacity recovers, the group is forecasting travel volumes will return to at least FY19 levels by FY25.
“Following the most challenging time in the travel industry, Helloworld has gone from strength to strength, delivering multiple profit upgrades and continuing to support our network members and customers,” says CEO Andrew Burnes, adding that he is looking forward to the year ahead.
“Throughout the pandemic Helloworld invested in technology and is continuing to invest to support our stakeholders and drive process improvement.
“This investment, together with our dedicated Helloworld team, network members, suppliers, and partners, will enable ongoing improvement to Helloworld’s profitability.”
)
)
)
)
)
