By Steve Jones
By the time you read this issue of travelBulletin, Helloworld Limited will have publicly opened its books and reported its 2015 full year financial results.
At the time of penning this column, the results were some days away, but we already know what the top line figures were going to be, courtesy of an update to the market in early August.
In disclosing details of a $205m non-cash impairment charge, Helloworld revealed it was reporting an adjusted pre-tax profit of $7m, with earnings before interest and tax of $27m to $28m.
But if outgoing chief executive Elizabeth Gaines can rightly leave the business pretty satisfied having steadied the listing ship and presided over a pre-tax profit, she will have been less pleased with the news that another high profile agency, Axis Travel, has quit the group.
The charismatic Max Najar, whose agency has been part of the fabric of Travelscene American Express for more than 30 years, blamed too many management changes, poor transparency and a lack of focus on the Amex blue box as his reasons for calling it a day.
Helloworld may have reported an improvement in its financial performance but it can ill afford to lose agents of Najar’s experience and profile. And if he is concerned about those issues, you wonder how many more agents are asking questions.
While the business has unquestionably settled after the initial upheaval of Helloworld’s launch and the management issues surrounding Rob Gurney, there is still much work to be done, notwithstanding its impressive showing at the AFTA awards.
The Helloworld board uses earnings as its key metric of assessing the financial performance of the group and that being the case you have to assume the $27m-$28m it achieved in 2015 would be viewed with some concern, given it was more than $40m last year.
This year’s figure has been impacted by a number of factors, namely increased investment in marketing, improved incentive payments and a smaller agency network. But there is no question the board will want a marked improvement as it moves through this current financial year.
Then, of course, there is the small matter of the share price, currently languishing at around 31c. Over the past 12 months, the share price peaked in May at 41c, but it has generally hovered just above 30c, half what it was in early 2012. And it is a far cry from the relatively heady days of early 2011 which investors must view with misty-eyed wonder. Then, the share price was a dizzying $1.
But even that is nothing compared to 2007 and 2008 when JTG was reporting record profits and the share price hit a now unthinkable $3.24.
That was in the days before JTG and Stella Travel Services struck their uneasy merger which ultimately morphed into Helloworld.
The JTG back then and the Helloworld of today are, of course, unrecognisable and there have been any number of twists and turns that have impacted the various agency networks.
Let’s not forget that Travelscene American Express and Harvey World Travel also traded through the MFS debacle.
With all that in mind, you have to conclude that it’s little wonder Max Najar has called it a day.