Travelex posts steep rise in revenues in Q1 2023
Travelex today posted a set of solid results for the first quarter of 2023.
The New Travelex Group generated revenues of £117.4m in Q1 2023, £48.6m (71%) greater than 2022.
The Group produced an underlying EBITDA result of £4.2m in the quarter, £10.9m ahead of 2022.
The strong revenue recovery from 2022 has continued throughout Q1 2023 as key regions in Asia, including China, Hong Kong and Japan, have eased all border restrictions. Continuing passenger growth and increased Wholesale transactions across the UK & Africa, ME&T, Europe and ANZ have also driven significantly improved revenues when compared to the same period in 2022.
Costs in 2023 were £37.7m higher than Q1 2022 reflecting higher variable trading costs in line with the improved revenue performance and further investment in staff costs to support growth.
Q1 is traditionally a loss making quarter for the Group, the turnaround in financial performance demonstrates the significant success in sustainably rationalising the cost base.
Capex of £2.9m consisted of store investments along with upgrades to IT infrastructure.
Free cash of £17.0m was £13.3m lower than 2022 as the business has invested in cash in tills and vaults across the Retail and Wholesale networks to meet increased demand as international travel continues to recover. Q1 2022 also benefited from £35m of tap funding proceeds.
Following the previous win at Chongqing Airport in China, Travelex have secured two further locations at Pudong airport in Shanghai. The rapid reopening of China in early 2023 has led to a number of new opportunities in this market, leaving the Group well placed to capture market share in this key growth market.
The Group has also secured a further eight locations across Dubai, Abu Dhabi and Sharjah airports in the UAE to capitalise further on the continuing passenger growth of these key UAE airport hubs.
Across the UK, the Group has secured a new location at Paddington station, which will focus on the key entry corridor into London Heathrow Airport. Additionally, we have successfully implemented our Dynamic Rate Engine (DRE) technology across further of our partner’s estates, helping to drive pricing optimisations for our key partners.
Wholesale banknotes trading performed strongly over the quarter particularly across Africa, driven by the on-boarding of new customers and strong underlying volumes from commercial banks. In Asia, the recovery of international travel has resulted in increased volumes in Japan and across South Asia.
With the positive momentum continuing in Q1 2023, the published forward guidance of £60m to £70m of underlying EBITDA remains unchanged.