The Helloworld Travel Ltd (ASX: HLO) share price has been a positive performer on Tuesday.
In morning trade the travel company’s shares are up 3% to $4.75.
Why is the Helloworld share price on the rise?
Investors have been buying the company’s shares following the release of a positive announcement this morning.
According to the release, the Department of Finance has exercised its option to extend the deed between the Department and Helloworld’s QBT business in relation to Travel Management Services for the whole of the Australian Government for a two‐year period from July 1 to June 30 2021.
The release explains that this extension was made pursuant to the contract extension arrangements put in place when QBT was appointed travel management service provider for a four‐year initial period commencing back in July 2015.
It also advises that there is a further one‐year extension available at the option of the Department beyond June 2021.
The company’s Group General Manager Corporate, Nick Sutherland, appeared to be pleased with the new agreement.
He said: “The extension was the result of the hard work and dedication by QBT’s team in delivering excellent service and capability over the initial deed period.”
This news will have come as a relief to shareholders as there had been concerns that a potential conflict of interest could have put its government contracts at risk.
Earlier this year the company’s CEO and the Honorary Federal Treasurer of the Liberal Party, Andrew Burnes, issued a statement refuting claims that he organised meetings between former Helloworld executive Russell Carstensen and U.S. ambassador Joe Hockey. The latter is one of the company’s largest shareholders.
He added: “I emphatically deny ever having told Mr Carstensen that Mr Hockey “owes me” or any words to that effect. Joe Hockey and I have been close friends for 20 years and it would be ridiculous to suggest I would say or imply he owes me anything.”
Elsewhere in the industry today, the Corporate Travel Management Ltd (ASX: CTD) share price has pushed higher as well, but the Flight Centre Travel Group Ltd (ASX: FLT) share price has edged lower again.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Helloworld Limited. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Flight Centre Travel Group Limited. The Motley Fool Australia has recommended Helloworld Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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