"The Group believes that it has put in place vital strategies and corporate action plan that would best enhance shareholders' value."
Asiatravel.com Holdings Limited and its subsidiaries’ (collectively the “Group”) resilient online business model had weathered intense competitions and has recorded an online business revenue growth of 5.0% amounting to the S$3.7 million. However the online revenue growth was offset by the decrease in the Group’s wholesale business of 33.8% amounting to S$5.5 million. On the whole, the Group recorded a decrease in revenue of 2.0% (S$1.8 million) to S$88.2 million for financial year 2015 as compared to S$90.0 million in the previous financial year 2014.
The Group has managed to grow its online revenue despite aggressively cutting back on its A&P spending. The Group has achieved this against a back drop of aggressive A&P spending by its online competitors to capture market share in the Group’s core S.E Asia and Middle East markets and destinations.
The Group spent S$3.7 million on A&P activities in FY2015 which represents 4% of its revenue where our competitors are spending an average of 25% of their revenue.
The Group’s gross profit decreased as the Group reduced mark up to maintain market share. The Group net profit continues to take a hit, as the Group is incurring start-up expenses to set up and expand its China-centric business unit to position the Group as a fully integrated China online domestic, outbound and inbound player.
The Group has a network of ground operation and 17 offices in Asia, Middle East and Europe operate and provide 24 X 7 customer services. Each office has the necessary travel licenses, knowledge and experience in handling the full spectrum of travel related products for domestic, inbound and outbound travelers.
Customers have a selection of over 8 million tour packages products including all-inclusive flight, hotel, airport transfer and tour/activity/attraction package departing from airports throughout Asia. We believe we are the first mover, if not the only online travel agency that is able to offer the all-inclusive flight, hotel, airport transfer and tour/activity/attraction package bookable on instant confirmation basis.
The Group has signed a Placement Agreement with ZhongHong New World International Limited, a wholly owned subsidiary of ZhongHong Holding Co., Ltd (“ZhongHong”) a real estate and tourism property developer listed on Shenzhen Stock Exchange to raise S$100 million by way of issuance of new shares and additional S$126 million by way of issuance of convertible warrants. The Group is now seeking approval from the relevant authorities for the Proposed Placement and the Proposed Placement is subjected to the Shareholders’ approval. Even without the Proceeds from the issuance of the new Warrants, the Proposed Placement of new shares could prove to a game changer for the Group.
The Group is in the 1st phase of its China expansion plan, the Group will focus on outbound travel into its core S.E.Asian destinations namely Singapore, Malaysia, Philippines, Thailand, Indonesia and Hong Kong where the Group has substantial supplies network and ground service operations. The Group believes its all-inclusive fully integrated flight, hotels, transfer and tours/attraction package product bookable on instant confirmation basis will be very attractive to the independent free and easy outbound travelers from China. The Group has a head start in this product segment compared to other online agencies.
The Group has soft launched its China-centric online platform cn.asiatravel.com and is ready to embark on an intensive marketing campaign in China to create awareness in order to expand its China business and revenue in a substantial way.
To conclude, the Group believes that it has put in place vital strategies and corporate action plan that would best enhance shareholders’ value.
Finally, I am pleased to report that we have again won the prestigious “Best Online Travel Agency 2015” awarded at the 26th Annual TTG Travel Awards 2015. This marks three consecutive years of Asiatravel being awarded this title: 2013, 2014 and 2015.
We would also like to take this opportunity to thank our customers, suppliers and vendors, business partners and associates, employees and key stakeholders for supporting us to maintain our position as one of the leading independent Pan-Asia online travel groups.
Boh Tuang Poh