HelloWorld Travel

A Look at HelloWorld Travel Limited’s performance: In FY 2018, Helloworld Limited’s (ASX: HLO) total transaction value or TTV stood at $6.1 billion which reflects the YoY increase of 3.5%. This robust growth was achieved on the back of positive momentum in the volume related to the air ticket sales. However, the company managed to maintain revenues at a decent level amid lesser airfares.

The company ended FY 2018 with profit after tax or PAT amounting to $32 million which implies the YoY growth of 48.1%. Between the same periods, the company’s EBITDA or earnings before interest, tax, depreciation, and amortization stood at $65.2 million reflecting the YoY growth of 18.2%.

  Full year results (Source: Company’s presentation)
What Helloworld Expects Moving Forward: The management of HelloWorld is having a favorable outlook moving forward on the back of expected positive momentum in the overall industry. According to the management, the economic growth would be witnessing an upward trend favorably impacting the travel markets which are currently being served by the company. The corporate travel is also expected to increase moving forward primarily because of the favorable business confidence as well as robust economic growth.

In FY2019, HelloWorld plans to work towards improving its margins as well as revenues and it also plans to achieve to efficiency with regards to the cost base as well as operations so that the metrics related to the profit margins can witness a positive trend. Meanwhile, the share price has risen 20.04 percent in the past three months and traded at higher level. Hence, we give an “Expensive” recommendation on the stock at the current market price of $5.800.
 

Jumbo Interactive 

Decent Performance in FY18: Jumbo Interactive Limited (ASX: JIN) is in the business of retailing the charitable as well as government lotteries by leveraging the digital platform. With the help of the digital platforms offered by the company, it focuses on streamlining the process of purchasing the tickets. On Australian Securities Exchange or ASX, the company is being traded under the symbol “JIN.” Recently, the company has posted decent performance in FY18 wherein the company recorded total transaction volumes (TTV) growth of 26% on Y-o-Y basis and amounting to $183.1 million in FY 18 against FY17. This growth was witnessed on the back of the positive momentum witnessed with respect to Australia Lotteries division. This momentum was aided by the strong momentum in the jackpot activity as well as in the customer activity.


Performance (Source: Company Reports)

What to Expect Moving Forward: In FY 2019, Jumbo Interactive’s revenue margin would be marginally lower on the YoY basis because of the negative impacts which are expected to be witnessed as a result of the product mix. The company garners lower margin in respect to the Powerball game. This game would be leading FY2019. During the same period, the company is expected to report EBIT or earnings before interest and tax margin in the range of 44-46%. The drivers for this margin can be operating leverage coupled with costs reduction as well as improving efficiency.

On September 24, 2018, Jumbo Interactive ended the day at A$7.25 which implies an intraday increase of 2.113%. On the same day, the company had a market capitalization of $419.25 million. Over the past one month, the stock has delivered a whopping return of 17.55%. The company has an annual dividend yield of 2.61%. Given the levels, the stock looks “Expensive” at the current market price.
 
 

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