Webjet Takes Off As Hotel Bookings Boom

By Glenn Dyer | More Articles by Glenn Dyer

Webjet shares surged sharply higher yesterday after it produced another solid earnings result and a small lift in the dividend.

The shares ended the day up 30% at $14.85 after hitting a high of $15.20.

Webjet announced a fully franked dividend of 8.5 cents a share payable on April 18, up from the 8 cents it paid in the first half of 2017-18.

The company delivered a record first-half performance with a 42% increase in EBITDA (earnings before interest, tax, depreciation, and amortisation) to $58.0 million.

Revenue jumped 33% to $175.3 million and net profit after tax (NPAT) was up 61% to $38.3 million before acquisition amortisation (AA).

It confirmed its guidance, forecasting at least $120 million in earnings before interest, taxation, depreciation, and amortisation (EBITDA), excluding one-off acquisition costs for the full financial year.

That was under analysts’ consensus expectations of $124 million in earnings for the full year, and yet the shares surged when normally a fall might have been expected for missing market forecasts.

For the first time, the online travel agency’s room booking arm WebBeds has contributed more than half of the group’s EBITDA.

The business was started in 2013, buys beds from hotels and resells them to other travel businesses, like tour providers.

Despite being a relatively new player, WebBeds is the second largest business-to-business provider of hotel beds in the world.

WebBeds’s EBITDA more than doubled year-on-year, from $12.8 million in the December half of 2017 to $30.1 million in the December 2018 six months.

Directors said this was driven by strong growth in the key European and Middle East markets, with meaningful EBITDA delivered from the Americas.

Commenting on the result, CEO John Guscic said in a statement: “This was another outstanding result for our business. Our WebBeds business continues to consolidate its position as the #2 global B2B player and is now delivering significant EBITDA growth.”

“Following the acquisitions of JacTravel and more recently Destinations of the World (DOTW), our increased global size and scale means we have been able to shift our focus from growing market share to pursuing more profitable growth. As a result, we saw increased TTV and EBITDA margins in all regions.

“The Webjet OTA continues to gain share despite a slowing domestic flights market and our strategy to focus on profitable bookings in Online Republic saw improved TTV and EBITDA margins.”

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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