Travel retailer Helloworld (HLO) is edging toward profitability while still adjusting to the reality of having fewer stores than it did before (mostly) transitioning to a single new brand.
HLO recorded a post-tax loss of -$700,000 for the six months to Dec 31 compared with -$4.7m the previous year.
Store numbers dropped -8% to 1695 compared with the end of 2013, when then CEO Rob Gurney set out to re-brand all retail outlets Helloworld.
They had previously been trading under the Jetstet, Travelworld, Harvey World Travel and Travelscene brands.
It was a difficult process and toward the end HLO management decided that rather than lose even more stores, it would allow around 70 die-hards to retain their existing brands while remaining part of the group.
Even so, total transaction value for the company fell -9% while revenue slumped -8%.
CEO Elizabeth Gaines said same-store profit increased 1%, “a good achievement given that market conditions in the leisure market during the last quarter of the 2014 calendar year were subdued.”
She said the performance of HLO’s corporate travel management improved, recording a pre-tax profit of $1.8m, largely due to cost cutting. TTV in this area remained stable.
Wholesale also improved with Ms Gaines nominating Insider Journeys (formerly Travel Indochina) as a star performer.
Looking ahead, Ms Gaines said: “The remainder of FY15 will see HLO focused on maintaining the momentum of Hellworld’s growing brand presence, continued top line growth in Helloworld.com.au and building on the increased profitability of the wholesale and travel management segments.
“HLO remains committed to ongoing investment to grow Helloworld.com.au, a critical part of our omni-channel strategy. The level of investment required in the second half is expected to be lower than the first half as TTV continues to grow.
“This continued investment in HLO’s digital offering, along with the subdued consumer sentiment in Australia, means that the Group is currrently tracking to deliver an Adjusted EBITDA in the range of $25m – $30m and remains on track to deliver a profit before tax in FY15.”