Wotif’s profit has fallen 12% to $51 million. Primary factors for the poor performance, which had been flagged in June, include flat turnover and revenue, $9.1 million in extra costs, continued revenue declines in Asia and rest of the world combined with a “problematic” Australian domestic market. The only bright spot for the Online Travel Agent was the growth in its airfare sales with flight booking revenue increasing 11% to $15 million.
Wotif Results commentary
• Record TTV and Revenue for the year were offset by cost increases of $9.1 million, including one-off items of $2.3 million
• ANZ accommodation revenues were up by $4.1 million, primarily from commission increase to 11% implemented from January 2013
• Australia and New Zealand (ANZ) accommodation room night volumes flat with Asia and Rest of World (ROW) room nights continuing to fall. Asia and ROW revenue down $3.3 million year-on-year
• Record flight performance with flight TTV increasing by 17.5%. Flights and Other revenue growth up $1.6 million year-on-year
• Increased marketing investment saw marketing costs up by $2.3 million year-on-year
• One-off items from write-off of domain names and accelerated IT Development Costs year-on-year impact of $2.3 million
It’s been a tough initiation for CEO Scott Blume, who started with Wotif in January.
“It has been a challenging year for the Group,” he said.
“Some positive momentum has been achieved, with accommodation revenue increases and the growth of the flights business.
“The flights business has been the standout performer for the Group and we are optimistic that this trend will continue into FY14.
“However, these revenue gains have been offset by a continued deterioration in Asia and ROWbusiness volumes, which are being addressed separately as part of the previously announced strategy projects.
“In a period of flat TTV and revenue growth our costs grew by $9.1 million year-on-year, including one-off write-offs of $2.3 million.
“In particular, we made a deliberate decision to continue to invest in marketing and technology to give us a solid base for the future.”
Mr Blume did not make any forecasts in his announcement but said: “We are working very hard on implementing the outcomes of the strategies released to the market in June 2013.
“Whilst it will take some time to see the effects of this work flow though to TTV and revenue growth, we have solid plans in place and work has already commenced on a number of key initiatives.
“We also have a number of key projects underway around packaging, mobile and customer reviews as well as the previously announced commission increase to 12% to be implemented progressively from January 2014.
“Although the Australian retail environment continues to be problematic I am confident that we have the right plan in place to improve the overall business and financial performance for the Group in the coming year.”