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One-off items turn helloworld profit into a loss

August 28, 2014 Corporate, Headline News No Comments Email Email

egtmedia59Helloworld has reported a full-year loss of AUD 61.2 million, reflecting the costs of  implementing the group’s transformation plan, the sale of its inbound business and GST court case penalties.

“This outcome is in line with expectations during a period when the group has been engaged in implementing the transformation plan,” chief executive Elizabeth Gaines said.

Following the successful implementation of the helloworld brand and digital offering, helloworld expected to fully participate in the forecast growth in travel in Australia, she said.

“Growth will be achieved through targeted consumer marketing and campaigns aimed at driving increased customer traffic to our network of franchisees and members supported by a strong digital offering.”

The size of the group’s retail network, measured by number of locations in Australia and New Zealand, compared to the number as at December 2013 fell by about 7%.

While it was difficult to predict the outcome of the trading conditions for the next financial year, the decrease in network numbers combined with the enhanced agent incentive structure and a commitment to growing the helloworld brand through an increased investment in marketing should help, she said.

“The focused, consolidated helloworld network will provide a strong platform for future growth in a multichannel environment. In addition, with the implementation of helloworld largely complete and subject to trading conditions, profit before tax is expected to improve significantly in FY15, reflecting a reduction in implementation costs, impairment charges and other non-recurring items,” Gaines said.

The group’s disposal of it inbound business delivered a AUD 5.5 million loss and the  transformation plan carried costs of AUD 15.8 million. There was also a non-cash goodwill impairment of AUD 59.5 million and GST case penalties of AUD 2.7 million as imposed by the Federal Court.

But for those one-off items, helloworld would have recorded a profit before tax of AUD 22.4 million.

Written by : William Sykes

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