Wotif flags first-half profit drop

Shares in group plummet almost 30% on profit warning, dim outlook.

Wotif.com Holdings (WTF) has flagged a lower first-half profit, warning the outlook for the second half of fiscal 2014 remains volatile with retail conditions in the group's key Australian and New Zealand retail market continuing to be soft.

Wotif.com shares plummeted in early trade. At 1030 AEDT, Wotif shares were 27.99% lower at $3.01, against a benchmark index lift of 0.16%. In earlier trade, Wotif shares dropped as low as $2.82 after closing the previous session at $4.18.

In a statement to the Australian Securities Exchange, Wotif.com said it was expecting a first-half net profit after tax (NPAT) in the range of $21.9 million to $22.6 million, a slight drop on the $27.5 million recorded in the previous corresponding period. 

Wotif.com also said it expects the total group TTV (total transaction value) to be flat, with a decline in Australian and New Zealand hotel accommodation of around 5%, likely to be offset by strong growth in flights and gains from the launch of dynamic packaging.

Given the volatility, Wotif.com said it was unable to provide guidance for the full year.

Wotif managing director Scott Blume said the group had made "considerable progress" in the implementation of the strategic initiatives outlined in June 2013.

"Many of those initiatives will result in improvement to the business in the medium term and, to some extent, the current fiscal year is a year of transition," he said.

"That said, we need to continue to work hard to sustain and grow our core ANZ accommodation business as we build out new business initiatives.

"The increase in our marketing and information technology costs in the first half is to support the strategic initiatives, invest in new market segments and respond to rapidly changing market conditions."

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