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On 21 February 2019, Webjet Limited (ASX:WEB), a company from the Consumer Discretionary sector offering a full range of online travel booking services for flights, hotels, car hire, cruises, and tours, announced its half-yearly results for FY19.
During the period, the statutory total transactional value (TTV) was up by 29% to $1.9 billion as compared to the previous corresponding period. The revenue during the period was up by 33% to $175.3 million. EBITDA went up by 42% to $58 million (excluding one-offs) and the EBITDA margin was up by 201 bps. The company reported an NPAT of $38.3 million, up by 59% for continuing operations. As a result, the EPS also went up by 48% to 31.5 cents. Based on this, Webjet declared an enhanced interim dividend of 8.5 cents.Â
Given the 1H FY2019 results of Webjet Limited, John Guscic who is the Managing Director of Webjet Limited stated that the WebBeds business of the company was the driving factor of the EBITDA growth. The company recently acquired Destinations of the World (DOTW) after the acquisition of JacTravel, which increased the global size and scale of the company. The companyâs focus now got shifted from growing market share to pursuing more profitable growth which resulted in increased TTV and EBITDA margin in all regions. Despite the sluggishness in the domestic flight market, Webjet OTA continued to gain share. The strategy to focus on profitable bookings in the Online Republic helped in improving the TTV and EBITDA margins during the period.
Under the WebBeds business, B2B Hotels business witnessed a rise in the bookings by 50% to 1.579 million. The total transactional value increased by 65% to $1.036 million. The revenue increased by 72% to $85.1 million, EBITDA increased by 136%, TTV / Revenue Margin increased to 8.2%, EBITDA margin increased to 35.4%. Based on the results of the WebBeds business, Mr John Guscic stated that the business has significant growth opportunities, especially in the Asia-Pacific region. Even though the business is not yet scaled in all markets, but the company was able to reach close to the â8/5/3â target, i.e. 8% revenue/TTV margin, 5% costs/TTV to drive 3% EBITDA/TTV. He also stated that by FY2022, the WebBeds business would be able to deliver an â8/4/4â target.
In the Webjet OTA business, the flight bookings increased approximately three times the market during the period. The total transactional value increased by 7% to $684 million, revenue by 12% to $74.1 million and EBITDA by 11% to $28.5 million. The TTV / Revenue margin went up by 52 bps and EBITDA margin was down by 36 bps.
For Online Republic, the improved results showed the strategy of the business unit to focus on profitability unit. The bookings were down by 1%. The total transactional value was down by 5% to 147 million. The revenue increased by 8% to $16.2 million and EBITDA by 14% to $6.9 million. The TTV / Revenue margin was up by 134 bps and EBITDA margin by 197 bps.
During the period, the company reported an improvement in the working capital as the underlying cash conversion was 95%. The company expects the cash conversion to be in the range of 95% to 110%. The CAPEX increased by 8% for the half year as compared to the previous corresponding period. The company stated that the guidance for FY2019 remains on track and they expect to deliver an EBITDA of at least $120 million.
In the last six months, the stock generated a negative return of 18.99%. By the end of trading session on 21 February 2019, the closing price of the share was A$14.850, up by 30.607% against the previous trading dayâs closing price. The stock has a market capitalization of A$1.54 billion with PE ratio of 31.57x.
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