Less than a month after delivering its 2018-19 results and a rather subdued outlook for 2019-20, Helloworld Travel now expects a better performance in the coming year than previously expected.
Earnings growth will be slower than that experienced in 2018-19, but from what shareholders heard yesterday, the outcome will be better than a month ago.
The company’s annual meeting was told yesterday that the company now expects earnings before interest, tax, depreciation, and amortisation (EBITDA) to be up to 12.5% higher in 2019-20 at between $83 million and $87 million, thanks to new commercial agreements and global distribution system (GDS) contracts.
It reported EBITDA of $77.3 million for the previous year, a rise of 21%.
“We are confident that given a continuation of current trading conditions we will again have a strong year in 2019-20,” chief executive Andrew Burnes told shareholders.
“Our acquisitions are performing well, our retail networks are either holding their own or growing, our supplier relations are very good, our corporate business is doing very well and across the Tasman, our New Zealand teams are going from strength to strength.
“We are in a very strong position to continue the businesses momentum and achieve our targets in the year ahead,’’ he said.
In the 2018-19 results, announcement directors gave a more subdued outlook, saying that the company “continued to grow strongly during the past year in all segments in which the Group operates, however, the growth rate slowed in the final quarter of FY19.
“Economic growth both domestically and globally, is expected to continue but at more moderate rates and this may flow through to the travel markets in which Helloworld Travel operate.
“Lower growth and inflation estimates have resulted in a reduction in interest rates, which may provide a stimulus to the economy and increase household incomes.”
Investors certainly took the message from the AGM to be more upbeat than a month ago and the shares ended up more than 6%, or 28 cents at $4.57.
That was 20 cents above the close on the August day when the 2018-19 results were released.
