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Why Helloworld Travel Ltd shares have taken off today

The Helloworld Travel Ltd (ASX: HLO) share price has had a positive start to the week thanks to the release of a solid half-year result.

In afternoon trade the travel company’s shares are up almost 4.5% to $4.81.

How did Helloworld perform in the first-half?

According to the release, for the six months ended December 31 total transaction value (TTV) grew 2.7% to $2,968 million, resulting in revenue of $164.9 million and EBITDA of $35.5 million.

This was a decline of 3.7% and an increase of 18.2%, respectively, compared to prior comparative period.

The decline in revenue reflects the impact of disposed operations and the restructure of its Insider Journeys business. Excluding this impact, revenue would have decreased by 1%, reflecting lower airfare prices and mix change.

But thanks to a focus on profitable revenue streams, cost reductions, productivity initiatives, and the benefit of merger synergies, the decline in revenue could not stop it from delivering strong growth in its EBITDA.

Pleasingly, management believes the company is well placed to continue the positive momentum into the second half of FY 2018 and is focused on growing TTV and improving revenue margins.

As a result, it has reaffirmed its previous EBITDA guidance of $63 million to $67 million for the year ending June 30 2018.

Later this week travel industry peers Corporate Travel Management Ltd (ASX: CTD), Flight Centre Travel Group Ltd (ASX: FLT), and Webjet Limited (ASX: WEB) are all scheduled to report their own earnings.

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Motley Fool contributor Motley Fool Staff has no position in any stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Flight Centre Travel Group Limited. The Motley Fool Australia owns shares of Helloworld Limited. The Motley Fool Australia has recommended Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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