Helloworld Travel Limited – 2025 Interim Results Summary

Website: helloworldlimited.com.au

Overall Report Tone

Helloworld Travel Limited reported a decline in revenue and profitability for the half-year ended 31 December 2024, primarily due to lower transaction volumes and shifting travel preferences. While operational efficiency helped control expenses, EBITDA and net profit fell significantly compared to the previous period. However, the company increased its interim dividend, indicating confidence in future prospects.

Financial Summary (Per Share Where Applicable)

Metric	1H FY25	1H FY24	Change
Total Revenue	$103.8M	$112.3M	-7.6%
Underlying EBITDA	$27.2M	$34.0M	-20.2%
Operating Cash Flow	-$42.1M	$12.3M	Negative swing
Profit Before Tax	$17.2M	$23.6M	-27.1%
Normalised EPS	7.1c	10.1c	-29.7%
Interim Dividend	8.0c	5.0c	+60%

Positive Surprises / Strengths

✅ Stable revenue margin: Despite a drop in revenue, the revenue margin remained at 4.9%, indicating steady pricing and commissions.

✅ Cost discipline: Expenses declined 1.7%, demonstrating efficient cost control despite rising salary expenses.

✅ Dividend growth: A 60% increase in interim dividend to 8.0c per share reflects management’s confidence in cash flows.

✅ Increased equity profits: Investments in MTA, Phil Hoffmann Travel, and Australiareiser Group saw a 13.6% rise in profits.

Potential Concerns

⚠️ Revenue and transaction volume decline: TTV fell 6.9% to $2.05B, reflecting lower airfares and shifts in travel trends.

⚠️ Weaker profitability: Underlying EBITDA dropped 20.2%, and net profit fell 32.4%, indicating reduced earnings efficiency.

⚠️ Negative operating cash flow: -$42.1M vs. $12.3M positive in 1H24, due to timing of supplier payments and customer receipts.

⚠️ Impairments and restructuring: A $2.95M impairment was recorded due to the planned sale of Entertainment Logistix, a non-core asset.

Outlook & Guidance

📌 Travel Demand Stabilisation: Management anticipates a return to growth in TTV, with ongoing demand for mid-haul destinations like Japan, Bali, and Thailand.

📌 Cost Management Continues: Expect expense controls and selective investments, particularly in digital and network expansion.

📌 Strategic Portfolio Adjustments: Sale of Entertainment Logistix is progressing to streamline operations and focus on core travel businesses.

📌 Continued Dividend Payments: Given the dividend hike, further strong returns to shareholders are anticipated.

Market Positioning

The share price has been in a holding pattern so far in 2025 in the lead-up to these results.

Analyst Positioning

Revenue Forecasts:

• • Analysts project $234.24M for FY25 and $246.09M for FY26.
  • 1H FY25 revenue was $103.78M, meaning to reach the FY25 forecast, HLO would need to generate at least $130.46M in 2H FY25.
  • Given the 1H YoY decline (-7.6%), unless significant growth occurs in 2H (e.g., seasonal recovery, stronger bookings), the FY25 revenue forecast appears too optimistic. A downward revision may be warranted.
  • If revenue continues declining YoY at a similar rate, FY26 estimates might also need a downward revision.

EBITDA Forecasts:

• • • Analysts forecast $44.12M for FY25 and $67.46M for FY26.
    • 1H FY25 EBITDA is $27.17M, meaning HLO would need $16.95M in 2H FY25 to meet the forecast.
    • Given a 20.2% YoY EBITDA decline, this suggests challenges in maintaining margin levels.
    • FY25 EBITDA may need to be revised downwards unless cost efficiencies significantly improve.
    • FY26’s $67.46M EBITDA projection seems highly optimistic, as it implies a major turnaround. A 15-20% downward adjustment may be needed.

Disclaimer: This information is provided purely for educational purposes. It takes no account of an individual’s personal financial circumstances and hence can in no way constitute financial advice. The above data may be subject to errors or inconsistencies for which the author takes no liability. It is imperative that all investors do their own research or if they need advice, seek it from a qualified financial adviser.

Quick Take: H1FY25 ASX:HLO