Helloworld joins the travel sector in upgrading guidance
Helloworld, one of the country’s largest travel agencies, says it is operating profitably again across all of its markets after upgrading guidance as spending on tourism rises.
The company said it expects underlying earnings before interest, tax, depreciation and amortisation to be between $42 million and $45 million in the 12 months to June 30 from total sales of more than $2.5 billion. Last year it reported a loss at the EBITDA level of $10.6 million.
Helloworld had originally told investors to expect earnings between $28 million and $32 million before increasing that forecast in April to between $38 million and $42 million.
Shareholders voted on Wednesday to approve the $70 million acquisition of Express Travel Group, which Helloworld said would add underlying EBITDA of $11 million to $12 million in financial year 2024.
In a statement to shareholders, Helloworld said it had no debt and that the Express acquisition would be fully funded from existing cash reserves.
“Leisure travel demand continues to hold up strongly on both sides of the Tasman,” it said.
“Inbound arrivals to Australia and New Zealand continue to improve from western markets while demand across traditional Asian markets remains slow. We expect to see this improve significantly in 2024.”
Helloworld joins Flight Centre, Ardent Leisure and Corporate Travel Management in upgrading earnings, as demand for leisure travel defies the rising interest rate environment.
Shaw and Partners senior analyst Philip Pepe said the sector should remain more resilient than some expect despite the potential for a slowing global economy.
“We therefore maintain our positive view on Helloworld Travel, which appears attractively priced versus its peers and has no debt,” Mr Pepe
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