Helloworld Travel Limited has solidified its position as a powerhouse in the travel industry, unveiling financial results that underscore its strategic prowess and robust market position. The company’s audited financial outcomes for the fiscal year ending June 30, 2024 (FY24) reveal a resounding success story marked by a significant surge in profitability and a sharp increase in total transactional value (TTV).
A Year of Spectacular Growth: Key Financial Highlights
Helloworld Travel’s FY24 financial performance is nothing short of extraordinary. The Group’s TTV soared to an impressive $4.2 billion, reflecting a 62.5% increase or $1.6 billion gain from the prior year. This remarkable growth trajectory is a testament to the company’s unwavering focus on profitable revenue streams, stringent cost control, and enhanced productivity measures.
Revenue for FY24 reached $228.2 million, a 37.5% increase from the previous year’s $165.9 million. This surge in revenue was supported by a strong underlying EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), which climbed to $67.5 million, marking a 52.9% increase year-on-year. The underlying EBITDA margin also improved, growing from 26.6% in FY23 to 30.0% in FY24. This growth reflects the company’s ability to harness efficiency while expanding its revenue base.
Net profit after tax experienced an equally impressive growth, increasing by 60.2% to $30.7 million, up from $19.2 million in the prior year. Basic earnings per share rose significantly by 54.8%, reaching 19.2 cents, further highlighting the company’s robust financial health and shareholder value creation.
Strategic Investments Fuel Expansion and Profitability
Helloworld’s strategic investments in technology, network expansion, and marketing initiatives were pivotal in driving the company’s enhanced profitability. The acquisition of Express Travel Group (ETG) significantly boosted TTV, particularly in the Australian and New Zealand markets, where growth rates were recorded at 60.6% and 79.4%, respectively. The integration of ETG has expanded Helloworld’s market footprint and provided new avenues for revenue generation.
The company’s commitment to technological innovation was evident in its ongoing investments in proprietary systems. Helloworld’s in-house retail mid-office solution, Resworld, has been a game-changer. It is deployed in over 170 agencies across Australia and New Zealand and has 800 registered users. This number is expected to double in the next 12 to 18 months, further enhancing the network’s functionality and operational efficiency.
Helloworld’s Air Tickets booking system and its wholesale hotel solution, ReadyRooms, continue to gain traction. The SmartSuite of technologies, including SmartNDC and SmartRefunds, has kept the company at the forefront of ticketing and consolidation services. ReadyRooms, with over 300,000 hotels, activities, and transfers, remains a cutting-edge booking portal, providing travel agents with a robust platform to meet the increasing demand for customized travel experiences.
Solid Balance Sheet Supports Future Growth
Helloworld’s financial stability is underscored by its strong balance sheet, with cash reserves totalling $161.9 million as of June 30, 2024. The company boasts zero bank debt, positioning it favourably for future expansion and investment opportunities. Additionally, the Group holds 1.4 million shares in Corporate Travel Management (ASX: CTD), further enhancing its financial strength.
The company’s ability to generate strong cash flows is a key highlight, with $63.5 million in operating cash generated during FY24. This robust cash generation, solid in the fiscal year’s second half, gives Helloworld the flexibility to pursue strategic investments while returning surplus cash to shareholders.
Dividend Reflects Strong Performance and Shareholder Confidence
Reflecting the solid financial performance, Helloworld’s Board declared a fully franked final dividend of 6.0 cents per share, scheduled for payment on September 19, 2024. This brings the total dividends declared for FY24 to 11.0 cents per share, an increase of 37.5% from the prior year. Based on the closing share price of $2.23 on August 24, 2024, the dividend yield stands at an attractive 4.9%, underscoring the company’s commitment to delivering value to its shareholders.
Travel Advisors in High Demand: A Resilient Business Model
The demand for professional travel advisors has never been higher, and Helloworld is uniquely positioned to meet this growing need. With a network of over 2,700 agencies and brokers across Australia and New Zealand, including more than 530 franchisees and 650 members of its broker business networks, Helloworld offers unparalleled reach and expertise.
In a world where international travel has become increasingly complex, the role of a travel advisor is more critical than ever. Australian and New Zealand travellers, in particular, value the expertise of professionals who can navigate the intricacies of multi-destination itineraries and provide support throughout the travel experience. Helloworld’s extensive network ensures customers access high-quality, personalized service in metropolitan areas or remote regional locations.
This vast network of over 10,000 travel advisors, the largest in Australia and New Zealand, positions Helloworld as the go-to provider for travel services. From urban centres to rural communities, Helloworld’s agents and brokers are committed to delivering exceptional service that meets the evolving demands of today’s travellers.
Outlook: A Promising Future Ahead
Looking ahead, Helloworld is poised for continued success. As travel numbers in and out of Australia return to pre-pandemic levels, the company’s outlook remains positive, with New Zealand showing similar trends. Helloworld’s diversified business model, which emphasizes profitable margin growth and stringent cost control, provides a solid foundation for future expansion.
CEO and Managing Director Andrew Burnes, AO, expressed confidence in the company’s trajectory, stating, “The demand and importance of professional travel advisors continue to grow in a market that values expert services to enhance travel arrangements and holiday experiences. Helloworld is committed to the long-term future of travel agents and brokers and can see first-hand that the demand for these services shows no signs of lessening. We are looking forward to continuing the successful journey for the business in the years ahead.”
As Helloworld continues to invest in its brands, technology, and people, it remains well-positioned to capitalize on the resurgence of global travel. With a strong balance sheet, a committed leadership team, and a clear strategic vision, Helloworld is set to navigate the future with confidence, delivering sustained growth and value for its shareholders.
Helloworld Travel’s FY24 results highlight the company’s resilience, strategic foresight, and unwavering commitment to growth. As the travel industry rebounds, Helloworld is not just keeping pace but is setting the standard for excellence in service, innovation, and financial performance. With a robust outlook and a continued focus on profitability, Helloworld Travel is poised to remain a leader in the global travel industry.
Written by: Michelle Warner
