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Highlights
- WEB shares declined by 44.86% over the past three months, driven by disappointing 1HFY25 results.
- In 1HFY25, WebBeds' total transaction value (TTV) increased by 26% YoY, but revenue was impacted by event cancellations.
- WEB remains committed to its AUD 10 billion TTV target by FY30 and a 50% EBITDA margin, with FY26 EBITDA expected to align with this goal.Top of Form Bottom of Form
WEB Travel Group Limited (ASX:WEB) is an international business to business travel distribution firm that establishes a connection between travel sellers with buyers across major international markets. Last month, the company spun off Webjet Group (ASX:WJL), an online travel agency business. WJL began trading as an independent company on ASX from 23 September 2024. With this development, WEB concentrated its focus to WebBeds which is engaged in connecting hotels and other travel service providers to travellers globally.
In the past three months, WEB shares recorded a decline of almost 44.86%, with decline of over 35% recorded on 14 October 2024, when the company released trading updates for 1HFY25.
During the six months ended 30 September 2024, WebBeds’ TTV increased by 26% YoY and booking jumped 22% YoY. The company highlighted that the revenue and TTV of WebBed were affected by events like Paris Olympics, and the European Football Championship and the collapse of FTI group
In 1HFY25, preliminary TTV/revenue margins are anticipated to be around 6.4%, down from the previously indicated 7% at the AGM.
WebBeds' preliminary underlying EBITDA margins for 1HFY25 are expected to be approximately 44%, compared to 52% in 1HFY24, reflecting lower revenue and a 15% increase in operating expenses compared to 1HFY24. Expenses for the second half of FY25 are expected to remain consistent with 1HFY25.
Despite these challenges, WebBeds remains committed to achieving its target of AUD 10 billion in TTV by FY30 and maintaining an EBITDA margin of around 50%. With the evolving geographic and business mix, TTV/revenue margins are expected to stabilise at approximately 6.5%, and FY26 EBITDA margins are projected to align with the 50% target.
Growth prospects for travel and tourism stocks
According to the data published by the Australian Bureau of Statistics (ABS) on 15 October 2024, short-term visitor arrivals in Australia increased by 9.2% annually in August 2024, while short-term resident returns surged by 6.8% YoY. The data suggested that total arrivals to Australia increased by 7.2% YoY in August 2024 and total departures increased by 11.7% YoY.
The increase in short-term arrivals and visitors bode well for travel and tourism stocks.
Share performance of WEB
WEB shares closed 1.79% lower at AUD 4.38 apiece on 17 October 2024. In the past one year, WEB’s share price has dropped by almost 23.34% and in the last six months, it has decreased by 39.57%.
52-week high of WEB is AUD 8.57, recorded on 22 May 2024, and 52-week low is AUD 4.45, recorded on 16 October 2024.
WEB Daily Technical Chart, Source: EODHD/Others
Note 1: Past performance is neither an Indicator nor a guarantee of future performance.
Note 2: The reference date for all price data, and currency, is 17 October 2024. The reference data in this report has been partly sourced from EODHD/Others.
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