Based on unaudited trading results for the year ended 30 June 2015 (FY15), the Company confirms that it expects Adjusted EBITDAI1 to be in the range of $27 million to $28 million and to deliver an Adjusted Profit before tax2 of approximately $7 million, a result that is within the range of previously stated market guidance.
HLO is scheduled to release the audited financial accounts for FY15 on 28 August 2015. The Company’s balance sheet includes a number of intangible assets such as goodwill, which arose from a number of legacy transactions including the 2010 merger of Stella Travel Services Pty Ltd and Jetset Travelworld Limited. The preparation of the full year results includes an assessment of the carrying value of intangible assets to ensure that the balances are appropriately supported based on a number of factors. These include cashflows from ongoing operations with reference to market growth assumptions as well as HLO’s market capitalisation having regard to recent trades of large parcels of shares in HLO. Based on these factors, the Board have determined that it is prudent for the Company to write down the goodwill balance and incur a non-cash impairment charge of $205 million.
At 30 June 2015, the Company held a cash balance of $176.1 million comprised of general cash of $27.4 million and client cash of $148.7 million. HLO had a positive net cash position and headroom in its debt facilities of $60.8 million. The goodwill write down is a non-cash charge which will be recognised in the statutory results with no impact on HLO’s cashflows or ongoing operations. The Company has a strong balance sheet and is positioned for long-term sustainable growth.
In December 2014, HLO announced that its wholly-owned subsidiary QBT Pty Ltd (QBT) was appointed as the sole provider of travel management services to the Whole of Australian Government. The contract appointing QBT commenced immediately and all Australian Government agencies were to transition their existing arrangements to the new structure by 1 July 2015. We are pleased to confirm that QBT successfully completed the transition as at 30 June 2015. This has been one of the largest transitions in Australian travel management history and involved 142 entities, uploading of more than 120,000 traveller profiles and the migration to a single online booking tool.
In February 2014, the helloworld brand was launched to the Australian consumer. Since that time helloworld’s prompted branded awareness has continued to grow amongst travelling Australians with the latest research confirming a significant increase to 34% which is up from the November 2014 result of 26% and the April 2014 result of 10%. The research is conducted with 1,200 pre-qualified respondents who intend to travel within the next 12 months, who are key decision makers in the travel process and who are 25 years or older. The significant increase in awareness amongst consumers looking to travel is strong validation of our approach and strategy to build the helloworld brand.
helloworld franchisees and members have dominated the agent and agency awards at the prestigious 2015 National Travel and Industry Awards, winning an impressive 75% of the agent awards and 3 of the 4 agency awards. This recognition is further validation of helloworld’s network of high calibre agencies including many of the industry’s leading corporate and retail travel agents and is a key differentiator that sets helloworld apart from its competitors. The network across Australia and New Zealand remains stable at just under 1,700 agencies.