This December will be the first summer holiday without any travel restrictions for Aussies. Be it chasing the sun on a cruise or going on a ski trip on the other side of the earth, vacation planning has been happening months ahead. Nevertheless, the upcoming holiday season brought good business for travel agency Helloworld (ASX: HLO) as they have just announced a strong September quarter result delivered across its wholesale, inbound, and retail businesses, as well as its newest venture in event logistics. 

In FY22, Helloworld reported net profit after tax of $90m, which is a drastic improvement from the $35.8m loss in FY21. Helloworld gained a Total Transaction Value (TTV) of $551 million in the September quarter, which is an increase of 352% from the same quarter last year. With revenue of $29.3m for the quarter, it equates to approximately 5.2% commission from the TTV for the travel agent. This was partially attributed to lifting the ban on international cruise ships back in April 2022. The ban lift brought Helloworld back to the surface as cruise sales made up roughly a third of Helloworld network agents’ leisure sales and also contributed significantly to their air and land sales. Australians and New Zealanders taking advantage of the first northern hemisphere summer without border restrictions. It is expected that cruises will return strongly as more capacity arrives in Australian waters over the coming months.

Similarly, Helloworld’s event logistics business Entertainment Logistix has seen significant improvement as more concerts and events are happening across the country due to the removal of restrictions on large group gatherings. Helloworld purchased the business from Avis back in 2018, expanding its brand portfolio to the freight and logistic industries. Gross revenues of the business have increased 38% in the prior corresponding period. Helloworld predicted that strong forward bookings and the return of major stadium tours to Australia will see this growth continue. 

“Since the announcement of border re-openings in Australia and New Zealand late last year, booking numbers have increased steadily to be at approximately 50- 80% of pre-COVID-19 levels in terms of new bookings. This has really warmed our spirits and renewed our enthusiasm as the demand for travel is still very present”, said CEO and Managing Director of Helloworld Andrew Burnes.  

“With the re-opening of the New Zealand borders, we have seen bookings for trans-Tasman travel pick up significantly and we expect this coming summer period will be extremely busy in both directions”, he continued.

When the pandemic struck, Helloworld had an approximate of $100m external bank debt. However, they have successfully managed to repay $30m from surplus cash during the pandemic, and the remaining $70m was repaid from the sale proceeds of its corporate travel management business that was sold to Corporate Travel Management Limited (ASX: CTD) for $184.8m (comprises of $100.0 million in cash and $84.8 million in CTD shares). As of the end of September quarter, Helloworld has no other external borrowings. 

Despite the economic downturn, travel continues to be regarded as a non-discretionary component of the family budget. Therefore, HLO is re-affirming its guidance to achieve an underlying EBITDA of $22m-$26m for the FY23 year, subject to no material adverse change in operating conditions and assuming that the business will continue to grow to pre-pandemic levels. 

Helloworld is proud of being one of the few Australian travel businesses that is able to issue dividends to shareholders at the end of FY22, with 0.10 dividend per share.