In morning trade the Helloworld Travel Ltd (ASX: HLO) share price has raced higher following the release of a trading update.
At the time of writing the travel distribution company's shares are up 6% to $4.56, but were up as much as 12% to $4.82 at one stage.
What did Helloworld announce?
This morning the company revealed that it has finalised major FY 2020 commercial agreements and is now in a position to provide guidance for the year ahead.
According to the release, subject to no material change in trading conditions, management expects EBITDA to be in the range $83 million to $87 million for the 12 months ending June 30 2020. This will be an increase of approximately 7.5% to 12.5% on the $77.3 million EBITDA Helloworld achieved in FY 2019.
The company's chief executive officer and managing director, Andrew Burnes, advised that it has started the year strongly.
He said "We are confident that given a continuation of current trading conditions we will again have a strong year in FY20. Our acquisitions are performing well, our retail networks are either holding their own or growing, our supplier relations are very good, our corporate business is doing very well and across the Tasman our New Zealand teams are going from strength to strength. We are in a very strong position to continue the businesses momentum and achieve our targets in the year ahead."
Prior to today, the Helloworld share price was down over 29% since the start of the year despite it posting a 20.8% increase in EBITDA in FY 2019.
Concerns over a slowdown in the growth of the travel industry late in the last financial year and a political scandal have weighed on its shares this year. But this positive update appears to have given investor sentiment a boost, judging by the share price reaction this morning.
