The company has announced a 41% increase in TTV for the second half of FY 2015 with strong growth across all its businesses and guidance has been reaffirmed. The Total Transaction Value for the six months to 30 June 2015 came to $ 646 million which is a 41% increase over the previous period. Strong growth was reported in all businesses including the core Webjet business, the various ZUJI operations and the B2B division Lot of Hotels (LOH) and SunHotels. The result continues to be an improvement on the results for the first half of FY 2015 which showed a 22% increase compared to the corresponding previous period. The core Webjet business witnessed record TTV each month in continuation of the performance in the first half. Domestic bookings were up 18% and international bookings by 33% compared to the previous year.The ZUJI businesses all performed well with the Asian businesses returning to 22% TTV growth after the downturn in the first half. TTV for the B2B division reflects the lower seasonal impact in both businesses. The second half of 2015 included SunHotels for the first time after its acquisition and performance was in line with expectations. LOH grew by 55% compared to the previous period.
Revenue margins were maintained during the half year and the company has reaffirmed its guidance of $ 27 million in EBITDA after accounting for $ 1 million in costs associated with the SunHotels acquisition. The result takes into account increased costs on account of expansion of sales teams, incentive payments as well as a one-off charge of $ 2 million on account of foreign exchange depreciation affecting SunHotels in some European markets. This charge is not expected to recur because of hedging arrangements and changes in supplier agreements.
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Growth Highlights (Source - company Reports)
The company has also announced that with effect from 25 February 2015, the ordinary shares started to trade on the OTCQX marketplace in the United States. This enables them to provide new and existing US investors with immediate access to the trading of their shares during US market hours while maintaining a commitment to providing disclosures in line with the requirements of the Australian Securities Exchange which regulates its primary market. The OTCQX market is reserved for established investor focused companies in the US and non-US companies listed on a qualified stock exchange in their home countries. R Cromwell Coulson, president and CEO of the OTC Markets Group, welcomed the company to the exchange and said that the move will expose the company to more investors in the US through transparent trading and convenient access. John Guscic, managing director of Webjet said that the company is excited about the opportunity to increase liquidity and to access a broader base of shareholders.
Interim report for the six month period to 31 December 2014
During the six-month period, the company completed the acquisition of SunHotels for € 19 million financed by a hedged Euro loan facility and the associated legal and due diligence costs came to $ 1 million. During this period, the Total Transaction Value increased by $ 113 million to $ 620 million which was an increase of 22% over the previous period. The net effect of the SunHotels transaction and the divestments of a controlling interest in Webjet Marketing North America LLC was a positive contribution of $ 46 million to the Total Transaction Value.
During this period, revenues increased by $ 6 million to $58.2 million a growth of 11.5 % compared to the previous period. The revenue margin of 9.4% (10.3% for FY 2014) was affected by the growth of the B2B business segment and the lower contribution from the Asian business of Zuji. Excluding the one-off charge of approximately $ 1 million associated with the SunHotels transaction, operating costs increased by $ 2.9 million to $ 42.7 million. EBITDA increased by $ 2.1 million to $ 14.4 million representing a growth of 17.3% compared to the previous year. The B2C business segment (consisting of the Webjet segment and Zuji) accounted for the $A 11.1 million and the B2B business segment for $ 3.3 million (including a loss of $ 0.4 million associated with the start-up of Webjet Exclusives and the loss of $ 0.6 million associated with the Hong Kong and Singapore operations of Zuji. Profit before tax increase by $ 0.8 million to $12.1 million representing an increase of 6.8%. Excluding the one off acquisition charge of around $ 1 million and the contribution of $ 0.7 million from Webjet USA in the previous year, the profit from ongoing operations was up by 23%.
Cash and cash equivalents stood at $ 57.5 million as at 31 December 2014 compared to $45.4 million as at the end of the previous year and this included client funds of $ 15 million (previous year $ 9.5 million). Operating cash flow after tax was $ 8.1 million an increase of $ 19.3 million over the previous year's outflow of $ 11.2 million. An interim dividend of 6.25 cents per share fully franked totalling $ 4 million has been declared which is the same as the previous year.
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Financial Highlights (Source: Company Reports)
Growth
Bookings were up by a five-year CAGR of 20% whereas organic growth was a five-year CAGR of 13% for Webjet, LOH and Exclusives. Webjet was up 17% year-on-year while Zuji was down 12% year-on-year.
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Double digit bookings growth (Source Company Reports)
The company has shown robust growth in its core business with record TTV for each month and this number, along with revenue and underlying EBITDA, are all up by more than 10%. Webjet bookings are up by 17% year on year and, despite the depreciation of 13% of the AUD against the USD, international bookings have grown by 38%. The performance has been driven by a number of factors such as a broader range of offerings, targeted tactical and brand marketing communication and improvements in conversions and quality.
Webjet Daily Chart (Source - Thomson Reuters)
We believe that the performance of the company shows its potential and that the growth prospects and the upside in the share price promise rewards for investors.. Accordingly, we are rating the stock as a Buy at the current prive of $4.13.
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