What’s with the Helloworld (ASX:HLO) share price?

The Helloworld (ASX: HLO) share price is flat despite a government contract extension and a positive corporate travel update.

| More on:
A traveller dressed in colourful shirt and panama hat looking puzzled, indicating uncertainty regarding the Webjet share price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Helloworld Travel Ltd (ASX: HLO) share price is back where it started today after the company made two positive announcements this morning. They include a contract extension with the Australian Government and a trading update for the March quarter. 

After opening 1.47% higher at $1.73, the Helloworld share price has retreated back to yesterday’s closing price of $1.705.

What did Helloworld announce?

Government contract extension

Helloworld advised that the Government’s Department of Finance has exercised its option to extend its travel management services with QBT Pty Ltd, a wholly-owned subsidiary of Helloworld.

The company will continue to provide its services for the Australian government for the one-year period from 1 July 2021 to 30 June 2022.

Business update 

Helloworld also advised today that its business was experiencing a strong recovery across all its corporate businesses. These include QBT, TravelEdge, Show Travel and APX in New Zealand. 

The update highlighted a 580% increase in April corporate total transaction values (TTV) on the previous year, but still down around 45% on 2019. The uptick in volume was underpinned by consistently open borders across both sides of the Tasman. 

This represents a significant improvement from what was previously reported in its February half-year results. The results indicated that its corporate Australian operations were running at 42% of prior year TTV, while New Zealand TTV was running at 29% prior year levels. 

Helloworld also highlighted that its New Zealand-based retail and wholesale businesses are experiencing a surge in bookings following the announcement of the Cook Islands bubble. 

Despite the significant rebound in New Zealand operations, this segment reflects approximately 13% of group TTV based off FY20 figures. The Australian segment accounts for a majority, or 85% of the group’s $5 billion FY20 TTV. 

Why is the Helloworld share price down to 7-month lows? 

The Helloworld share price has shed almost half its value from a high of $3.20 in late November 2020 to $1.705 today. 

Depressed ASX travel shares surged in late November last year following COVID-19 vaccine trial updates from Pfizer. The positive updates and implications for the travel industry sent the Helloworld share price surging 75% from $1.88 to $3.20 between 9 November and 25 November. 

However, this situation might reflect too much optimism before any positive financial or operational benefits materialise. With domestic travel only recently picking up, but still down on 2019 figures, and international travel at a standstill, the Helloworld share price has possibly drifted lower without any new catalysts.

Helloworld peers including Flight Centre Travel Group Ltd (ASX: FLT) and airlines such as Qantas Airways Limited (ASX: QAN) are also trading at similar price levels compared to November last year. 

Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Helloworld Limited. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and Helloworld Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Rival hands reaching upward for a company trophy or prize.
Share Market News

Here are the top 10 ASX 200 shares today

These ASX 200 shares outperformed all their peers on Friday.

Read more »

a woman holds her hands to her temples as she sits in front of a computer screen with a concerned look on her face.
Bank Shares

What’s moving the CBA share price this week?

CommBank shares traded ex-dividend on Wednesday this week.

Read more »

A woman stands on the roof of a city building as papers fly in the sky around her.
Share Market News

Here are the 3 most heavily traded ASX 200 shares on Friday

We take a look at the most traded ASX 200 shares today...

Read more »

Two men in suits face off against each other in a boing ring.

The Aussie-born crypto platform taking on Ethereum

A new platform is being launched by a 25-year-old Aussie millionaire.

Read more »

A woman shouts through a megaphone.
Share Market News

Earnings preview: Here’s which ASX shares are reporting today

Wondering which ASX companies are releasing results on Friday?

Read more »

A happy male investor turns around on his chair to look at a friend while a laptop runs on his desk showing share price movements
Share Market News

5 things to watch on the ASX 200 on Friday

The ASX 200 looks likely to have a decent finish to the week...

Read more »

A group of happy office workers throw papers in the air and cheer after seeing the Latrobe Magnesium price skyrocket 38%
Share Market News

Here are the top 10 ASX 200 shares today

These ASX 200 shares outperformed all others on Thursday.

Read more »

Three male athletes sprint on an athletics track with the sun low on the horizon behind them representing the race between ASX lithium shares to outperform
Share Market News

Here are the 3 most heavily traded ASX 200 shares on Thursday

Our most traded ASX 200 share today is down by more than 5%.

Read more »