However, keen investors can find opportunities in these smaller companies for better returns than blue-chip regulars like BHP (ASX: BHP) and Commonwealth Bank (ASX: CBA).
Helloworld Travel Ltd (ASX: HLO)
Helloworld Travel is a leading Australian & New Zealand travel distribution company, comprising retail travel networks, corporate travel management services, destination management services (inbound), air ticket consolidation, wholesale travel services, and online operations.
The company released 1H23 results on Monday, detailing three times more transaction volume than the prior comparable period (pcp).
Here are the highlights from the company’s results:
- $1.2 billion of total transaction volume (TTV) – up 209% on the pcp
- $73 million total revenue from continuing operations – a 151% leap on pcp
- $13 million of operating earnings (EBITDA) – rebound from a close to $8 million loss
- Net profit after tax (NPAT) of $1.6 million – a flip from a $15.2 million loss from pcp
- A strong balance sheet with $83.8 million of cash and no debt.
- 2 cent per share fully franked interim dividend declared
Travel is back
The demand is surging across Helloworld Travel’s international operations too, with $178 million of TTV from New Zealanders – up 359% while Fijian operations also saw over 22 times more TTV last half.
The company said demand for the services of its network agents has continued to outstrip agent availability.
Helloworld chair Garry Hounsell commented on the results and outlook, writing:
“[TTV growth] reflects the strong demand from the travelling public, domestic and international borders returning to normal, Helloworld’s strong product offering, and the incredible efforts of our agency networks to service their customer base.
Booking volumes are expected to continue to increase as prices normalise and capacity returns with airlines and tour operators continuing to onboard further resources to meet demand.”
PeopleIn (ASX: PPE)
The company released 1H23 results on 17 February, highlight by record __ and a strong outlook.
Here are the key takeaways:
- $597.3 million in revenue, up 89% on the pcp
- $13.8 million of net income, a 223% jump from pcp
- Profit margin up to 2.3%, bettering the pcp margin by a further 1%
- Earnings per share (EPS) of $0.14, up from $0.045 in 1H22
PeopleIn is in the business of sourcing staff for its clientele, primarily temp staffing through the use of contractors. These include appointing supplementary nurses, labour hire, IT contractors and some niche areas including a focus on the PALM scheme and indigenous placement programs.
The company stands to benefit from positive operating conditions including, continued acute shortage of labour and strong market opportunity. PeopleIn’s share price fell just over 30% in 2022 and has seen choppy trading in 2023 despite the positive results and outlook.
This has led management to conduct a strategic review with the following rationale:
“The PeopleIN Board considers that the recent share price performance does not reflect the record financial results for FY22 or the fundamental strength of the business and has therefore decided to undertake a strategic review to evaluate options available to maximise shareholder value.”
Additionally, CEO Ross Thompson said:
“We are pleased to announce a record result, which was driven by strong organic growth across our core businesses and favourable industry tailwinds, including record low unemployment.
Based on the operating results for the first half and the mid-range forecast for economic conditions to continue, PeopleIN expects this strong momentum to continue into the second half of the financial year.”
