ASX Earnings Wrap: AI stock Appen plunges, Helloworld says local travel agents making a comeback

It’s earnings season again as the ASX market announcements page becomes increasingly flooded with earnings lodgements.

To save you the trouble of trudging through it all, we’ve wrapped up the highlights from some of the reports that caught our eye.

Helloworld Travel (ASX:HLO)

Highlights:

For the full year, underlying EBITDA was $44.1m; vs $10.6m loss in the pcp
Final dividend of 6 cents, fully franked, following a 2 cents interim dividend paid in March
Underlying EBITDA guidance of $64-$72 million for FY24

Helloworld says strong demand from travellers, the removal of border restrictions, and increasing supply and capacity have underpinned its strong result in FY23.

The post pandemic recovery has seen more travellers than ever benefiting from using their local travel professional, with most agents across Helloworld’s networks reporting FY23 as a very busy year.

“Consumers have realised, because of the pandemic, the importance of having a trusted professional to support them with their travel experiences, a benefit that doesn’t always come with online or high churn travel retailers,” noted the company.

As travel recommenced, travellers visiting friends and relatives was the predominant reason for travel; however, over time the prominence of leisure-based travel has also steadily increased.

“There has never been a better time to be in a travel related business as demand continues to outstrip supply,” said the travel agency network company.

In FY24, Helloworld says further reopening of the Asian markets will present ongoing growth opportunities for its inbound division.

Neuren Pharma (ASX:NEU)

Highlights:

For the half year, total income of $64.4 million, including $62.9m from DAYBUE
Profit after tax of $47.8 million
Cash and equivalents at 30 June was $85.7m

Neuren said during the first half, progress across the three elements of its business has been transformational.

Firstly, the approval and exceptional launch of DAYBUE by Acadia in the US has driven H1 profit after tax to $48 million, including the first ongoing royalties.

Under this partnership, Neuren is also set to receive additional potential milestone payments of up to US$427 million, plus royalties on net sales ex-North America.

Secondly, Neuren announced the expansion of its partnership with Acadia, with Acadia’s exclusive licence for trofinetide (the underlying drug for DAYBUE) in North America expanded to a worldwide exclusive licence.

And thirdly, as DAYBUE revenues grow, the company is also on track to reach a key value inflection point in December with the first results from treatment of Phelan-McDermid syndrome with NNZ-2591.

Maggie Beer (ASX:MBH)

Highlights:

For the full year, net sales of $88.7m, down 1.4% on the pcp
Gross margin down 1.4% to 50.3%, impacted by higher costs and consumer shift from online to in-store
Net cash of $9.2 million at 30 June

Maggie Beer says its operating results for FY23 reflect the continued effect of rising interest rates and inflation impacting consumer spending, and shifting consumer habits in online shopping.

Higher freight and labour costs also impacted cost of doing business during the period.

MBH has recorded a non-cash impairment charge of $12.5 million against the goodwill of Hampers & Gifts Australia (HGA), a company it acquired in May 2021 for an upfront consideration of $40 million.

For FY24, Maggie Beer says priorities include investing in marketing, analytics and e-commerce capability to set a strong foundation for FY25.

“Our 5-year strategy supports our aspiration to create a $300 million net sales revenue business with strong margins and return on assets,” said CEO, Kinda Grange.

Appen (ASX:APN)

Highlights:

For the half year, group revenue was $138.9m, down 24% on pcp
Statutory net loss after tax of $43.3m, compared to loss of $9.4m on pcp
No dividend declared to ensure appropriate allocation of capital

Appen’s CEO and president, Armughan Ahmad, says the first half result reflected a challenging external environment.

The plunge in revenue was primarily due to a much lower contribution from Global Services segment, which recorded a revenue reduction of 27.4% to $100.1m.

Within its New Markets segment, revenue declined 43% to $6.1 million as customers reduced work performed on the company’s platform.

Looking forward, Appen says it continues to face headwinds from the broader technology market slowdown and as customers evaluate their AI strategies.

“Due to the ongoing uncertainty across all customers, we now expect 2H FY23 revenue to be closer to 1H FY23 revenue,” the company said.

“We now expect to exit FY23 with an annualised run-rate operating cost base lower than $113 million.”

Appen also said it will simplify its business and deliver incremental costs savings, but that may have a negative impact on 2024 revenue.

Restaurant Brands NZ (ASX:RBD)

Highlights:

For the half, total group sales of NZ$640.2m, up 9.4% on pcp
Group NPAT of $2.2m, down -85.6% on pcp
Total stores increased from 488 to 493 for the six months ended 30 June

The operator of KFC, Pizza Hut, Taco Bell in Australia and NZ says the inflationary environment has continued to evolve, and performance continues to be impacted significantly due to continued input cost increases, particularly in New Zealand.

“While the business has implemented a strategic programme of price increases and cost control measures to relieve margin pressures, we were not able to raise prices to fully offset the input cost increases during the period without significantly impacting transaction volumes,” said the company.

In NZ, sales grew across all brands during the half, primarily driven by price increases and the easing of pandemic-related trading constraints.

In Australia, total sales increased on last year, primarily due to post Covid recovery, marketing strategies, and the effect of additional store openings.

RBD has guided the market to a H2 NPAT in the range of $12 million to $16 million.