Coronavirus Covid-19's latest tourism industry victim is ASX-listed Helloworld (ASX: HLO), with the company announcing it expects minimal if any growth in the second half.
The travel distribution group says its retail leisure, wholesale leisure and corporate business will be impacted by the virus which has forced airlines to bin flight paths, countries to close borders and quarantines to be enforced.
Specifically, Helloworld expects a negative impact on cruise sales, its Australian inbound business and air ticket sales to and via Asia.
"We anticipate the net outcome to the business will be minimal TTV growth on a like for like basis for the remainder of FY20, with a further trading update to be provided in April," says Helloworld.
The company notes its inbound business makes up 3 per cent of total transaction value (TTV) while its China inbound business is worth 3 per cent of the total inbound business.
"On the basis of cost reduction strategies already being implemented and assuming there is no further material change in trading conditions over the remainder of the financial year, the company expects to deliver underlying EBIDA at the bottom end of the earnings guidance previously provided (being in the range of $86 million to $90 million)," says Helloworld.
The Covid-19 update formed part of Helloworld's 1H20 results announcement in which the company posted record TTV for the half.
TTV was up 12.9 per cent to $3.6 billion, with business expansion lifting revenue by 9.8 per cent to $200 million.
During the half the company grew by acquiring travel management solutions company TravelEdge for $28 million and completed the integration of prior year acquisitions Show Group and Williment Travel.
Its retail network grew by 49 members since 30 June 2019, including nine new Helloworld Travel branded stores.
This network expansion allowed the group to record a profit result of $32.9 million before tax, up by 4.9 per cent on the prior corresponding period.
"During the half year, Helloworld Travel benefitted from business expansion and greater operational efficiencies to again deliver growth in TTV, revenue, underlying EBITDA and net profit after tax compared with the prior corresponding period," says Helloworld CEO and managing director Andrew Burnes.
"The business continues to expand both organically and through business acquisitions, including TravelEdge, Show Group, and Williment Travel, while increasing both the scale and efficiencies in our existing business with strong investment in marketing initiatives and enhanced technology solutions."
Shares in Helloworld are down 2.36 per cent to $4.14 per share at 11.30am AEDT.
Business News Australia
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