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WWPKG 2017/2018 First Quarter achieved profit turnaround with more than 50% increase in Revenue

August 16, 2017 Financial No Comments Email Email

WWPKG Holdings Company Limited (“WWPKG”, together with its subsidiaries, the “Group”; HKSE: 8069), a leading travel agent in Hong Kong, announced its results for the 3 months ended 30 June 2017. 

http://www.tourismlegal.com.au/During the period, WWPKG achieved profit turnaround to HK$1.04 million, compared to the loss of HK$7.77 million in the corresponding period in 2016. 

During the same period, WWPKG recorded total revenue of approximately HK$123.89 million, representing a y-o-y increase of 50.4%, and drove a turnaround from loss to profit. This was mainly due to (1) sales of package tours for the three months ended 30 June 2017 improved significantly, when the number of tour participants increased by 51.8% and that the Group was able to adjust the selling prices of certain package tours upwards, especially during the Easter holidays’ period coupled with the cherry blossom season in Japan in April 2017, as compared to the corresponding period in 2016; (2) sales of package tours bound for Japan during the three months ended 30 June 2016 was negatively impacted by the Kumamoto Earthquake that occurred in April 2016, when the Group’s package tours bound for Kyushu during the period between 15 April 2016 to 27 June 2016 were completely suspended; and (3) no listing expenses were charged. 

 Cost of sales and gross profit 

Package tours 

The Group’s revenue from package tours increased by 50.9% from approximately HK$80.3 million for the three months ended 30 June 2016 to approximately HK$121.2 million for the three months ended 30 June 2017. The increase in revenue was mainly due to increases in both the number of tour participants and the selling prices of the Group’s certain package tours. With the major components of the package tours’ cost of sales, being land costs and air fare costs, held relatively constant, gross profit margin improved from 10.8% for the three months ended 30 June 2016 to 11.7% for the three months ended 30 June 2017. 

FIT products 

FIT products generally include air tickets, hotel accommodations and combination of both. The Group’s revenue from the sales of FIT products decreased from  approximately HK$0.8 million for the three months ended 30 June 2016 to approximately HK$0.6 million for the three months ended 30 June 2017 mainly due to continuous keen competition from online agencies, booking platforms of hotels and budget airlines, as well as the fact that the Group’s new online sales platform, one of the key purposes for which is to cater for the increasing trend of booking air tickets and hotel accommodations online, was subject to further major enhancements to be completed by the end of 2017. 

Ancillary travel related products and services 

Ancillary travel related products and services mainly include travel insurance, admission tickets to attractions such as theme parks and shows, local transportation such as airport transportation, railway tickets and transportation passes. The Group’s revenue from the sales of ancillary travel related products and services increased from approximately HK$1.3 million for the three months ended 30 June 2016 to approximately HK$2.1 million for the three months ended 30 June 2017 mainly due to (i) the increase in sales of Japan rail passes; (ii) the Group’s appointment as the exclusive ticketing agency for Legoland Japan in Hong Kong with admission ticket sales commenced in February 2017; and (iii) the increase in margin income from insurance companies for the sales of travel insurance to customers. 

 

Future Prospects

Going forward, the Group intends to continue (i) to promote its brand recognition and awareness; (ii) to strengthen and enhance its sales channels; (iii) to improve its operational efficiency; and (iv) for general corporate and working capital purposes. With its long-established brand name, well-maintained business relationship with suppliers, ability to respond to adversities, and healthy net assets position, the Group will continue to execute its business strategy to expand both revenue streams and customer base by:

  1. introducing new routes (including collaboration with airline suppliers to develop charter flights and/or charter routes), itineraries, activities and hotel accommodations from time to time in order to offer new and/or better travel experience to its customers;

  1. enhancing its integrated online sales platform through a number of further major enhancements so that such platform will eventually satisfy most of the travel needs of the Group’s customers as a user-friendly and informative one-stop shop;

  1. boosting its marketing efforts (i) on digital marketing, including advertising on social media and search engine marketing, so as to increase online channel presence and online traffic and drive online inquiry to the Group’s product offerings; and (ii) through collaboration with its spokesperson to raise the awareness of the Group’s brand and enhance the popularity of its products through travel television programme, social media and other conventional media advertisements such as newspapers and television commercials; and

  1. exploring investment opportunities that could create operating synergies.

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