The Helloworld Travel Ltd (ASX: HLO) share price has surged higher this morning following the release of its first quarter update.
At the time of writing the travel company's shares are up 5.5% to $4.72.
What happened in the first quarter?
During the three months ended September 30, Helloworld's total transaction value (TTV) grew 10.4% on the prior corresponding period to $1.878 billion.
Unaudited EBITDA for the quarter came in at $24.7 million, up 7.7% on the previous corresponding period. Helloworld also saw an improvement in its EBITDA to revenue margin. It lifted to 24.6% compared to 24.4% for the same period last year. Both periods exclude the impact of the new lease accounting standard.
What were the drivers of the strong start to FY 2020?
Helloworld reported Australian retail network growth of 7% on a ticketed basis. Its Flights Systems B2C business grew 92% and its Australian wholesale businesses grew by 5.7% during the quarter. This offset a 9.7% decline by its Australian Inbound business due to a decline in UK and Asian OTA.
Elsewhere, Australian corporate travel management TTV grew 14.3% and New Zealand TTV was up 31.1%.
Andrew Burnes, Helloworld's CEO and managing director, said: "We are very pleased with the results for Q1 FY20 and are tracking according to our forecasts. While there has been some softening in inbound demand, our businesses in retail, wholesale and corporate have continued to attract both repeat and new customers and the professional travel services provided by our 2400+ retail network members on both sides of the Tasman is helping drive growth."
Outlook.
Pleasingly, there has been no impact from the Thomas Cook collapse. As a result, management continues to expect solid growth in FY 2020.
In fact, it has upgraded its EBITDA guidance from between $83 million and $87 million to between $86 million and $90 million. This is subject to no material change in trading conditions over the remainder of the financial year. It also excludes the impact of the new lease accounting standard.
It isn't just Helloworld on the rise today. The Webjet Limited (ASX: WEB) share price is rising following a presentation at the Goldman Sachs 3rd Annual Tech Day. Elsewhere, the Corporate Travel Management Ltd (ASX: CTD) share price is also pushing higher today.
