Taylor Swift, leisure travel and more boost Helloworld earnings in March quarter

Even though travel itineraries are laid out in TikTok and Instagram videos, people still look to travel agents to plan their trips. Travel distribution company Helloworld (ASX: HLO) saw its network agents continue to experience high demand for leisure and corporate travel in Australia and New Zealand. 

Even though demand for domestic leisure travel has come down from the 2022 peak, demand for international travel, particularly cruise travel, has been growing rapidly. 

Demand for the Company’s inbound services continues to recover, and on a geographical basis, Helloworld’s Australian, New Zealand, and Fijian operations were all profitable in Q3 FY24, including Entertainment Logistix.

After a disappointing first half, Entertainment Logistix (ELX), Helloworld’s concert, theatre and event logistics business, recovered in Q3 thanks to major events, including Taylor Swift’s Eras Tour, Pink, Blink 182 and others. Its YTD sales till the end of March 2024 were $15.2 million, generating a YTD underlying EBITDA of $842,000.

As of March 2024, full-time employee numbers had stabilised at 750, including 480 in Australia, 112 in New Zealand and 137 in Fiji. 

In Q3 FY24, Helloworld reported an underlying EBITDA of $14.6 million, up from $14.2 million in Q3 FY23. Its total transaction value (TTV) was $854.9 million compared with $596.2 million. Helloworld’s total revenue amounted to $55.5 million, while the revenue margin for the quarter was 6.3%, and the underlying EBITDA to revenue margin was 26.3%. 

The YTD underlying EBITDA YTD was $48.6m, up 63.1% on PCP, and the YTD TTV was $3.057 billion, up 69.5% on PCP’s $1.804 billion.

Helloworld’s retail networks in Australia and New Zealand have seen major TTV growth, with travellers taking advantage of airline capacity growth and more competitive airfares. Consumers continue seeking a travel professional to help plan and manage their travel needs.

Network numbers across its key agency businesses have stabilised over the last 12 months, and Helloworld is investing more in supporting agents with commercial outcomes, marketing, training and on-going systems development. 

The Company’s ‘Ready Rooms’ B2C portal now offers over 240,000 hotels, apartments and other accommodation options. Its inbound division in AU, NZ and FJ now has active wholesale clients in 42 countries worldwide, down from 78 countries pre-COVID.

Looking ahead, the Company expects international and domestic travel demand to grow as capacity expands. Travellers are expected to book complex international travel with longer lead times and higher average per person spend. Cruise operations will expand capacity globally and in Australian and New Zealand waters.

The Company has no external borrowings, and all its recent acquisitions have been funded from internal resources. The business continues to invest in its proprietary technologies in ticketing, wholesale and accommodation platforms, like ResWorld, whose mid-office platform is now used by over 760 retail travel consultants in Australia and New Zealand.

Helloworld reaffirmed its guidance to achieve an underlying EBITDA of $64-$72 million for FY24, subject to no material adverse change in operating conditions over the remainder of the period.