Qantas-backed travel group Helloworld turns a corner

Qantas-backed travel group Helloworld declared a dividend yesterday for the first time in three years.

Helloworld CEO Andrew Burn. Picture: James Croucher

Qantas-backed travel group Helloworld has turned a corner, declaring a dividend yesterday for the first time in three years.

Under the stewardship of Andrew Burnes, who together with wife Cinzia owns 40 per cent of the company, Helloworld produced a before-tax profit of $3.5 million for the fiscal year, up on last year’s significant loss of $198.4m.

Since taking over as chief executive following the merger of AOT with Helloworld in February, Mr Burnes has cut executive costs, revamped advertising and online strategies and improved relations with agency networks. The group is an amalgamation of brands including Jetset Travel and Harvey World Travel.

Helloworld achieved earnings before interest, tax, depreciation and amortisation of $25.3m for the year to June 30, up 5 per cent on the previous year, while total transaction values jumped 8.3 per cent to $5.1 billion. However, revenues across Helloworld’s retail divisions dropped nearly 3 per cent to $147.5m compared with $152m the previous year.

A fully franked dividend of 2c per share will be paid on September 16.

Select Equities director Danny Goldberg said Helloworld finally had “a hard-nosed, astute CEO with significant skin in the game and shareholder alignment. An aggressive cost-out strategy is on track with more savings to come. The guidance that they’ve provided seems conservative and they’ll most likely beat it.”

One-off costs for the year included $1.8m associated with redundancies and $3.8m costs due to the merger of the Burnes’s AOT group with Helloworld.

Meanwhile, Corporate Travel Management, which has about 1000 Australian corporate clients, reported a 35 per cent increase in TTV, contributing to a net after-tax profit of $48.6m, up 58 per cent on the previous corresponding period.

CTM managing director Jamie Pherous said there had been declines in the number of corporate clients from mining-related states, but they had steadied.

Australian corporate activity was pretty flat but business was booming in some of CTM’s overseas markets.

“There’s no doubt some of those clients in Brisbane and Perth were declining but they are now steadying,” Mr Pherous said. He foreshadowed the company would perform well in the US this year.