Helloworld Limited to incur $205 million “non-cash impairment charge”.
Helloworld has just issued an ASX trading update, with the board determining that it is “prudent for the Company to write down the goodwill balance and incur a non-cash impairment charge of $205 million”.
As part of the preparation of the company’s full year results an assessment of the carrying value of intangible assets is undertaken, with these including goodwill arising from “a number of legacy transactiosn including the 2010 merger of Stella Travel Services Pty Ltd and Jetset Travelworld Limited”.
Despite the write-down, the company says it has a strong cash balance of $27.4 million “plus client cash of $148.7 million” as well as $60.8 million in debt facility headroom. “The goodwill write down is a non-cash charge which will be recognised in the statutory results with no impact on HLO’s cashflows or ongoing operations,” the company said.
“The company has a strong balance sheet and is positioned for long-term sustainable growth,” the statement added, with the full year results release on 28 August expected to detail an “adjusted Profit before tax and impairment” of approximately $7 million.
More details in today’s issue of Travel Daily.