Image source: © Joasouza | Megapixl.com

Highlights

  • Webjet offers a range of travel products like hotel rooms and flights through its online platform.
  • In FY23, the company registered EBITDA of AUD 134.8 million.
  • The company witnessed a positive start to FY24 as TTV increased across WebBeds and webjet.com.au division.

Webjet Limited (ASX: WEB) is an ASX-listed consumer services firm which offers travel products such as flights and hotel rooms through online mode. The company operates in a business-to-business wholesale division and retail business-to-consumer division.

In the financial year 2023, the company delivered EBITDA of AUD 134.8 million, and a total transaction value of AUD 4.35 billion, compared to AUD 1.64 billion in FY22.

As of March 2023, the company held AUD 514 million in cash after repaying AUD 86 million in bank debt.

Growth prospects

On 25 September 2023, the Australian Government recommenced the processing for Approved Destination Status (ADS) scheme travel for Chinese group tours. In 2019, Chinese visitors spent nearly AUD 581 million on group tours in Australia, representing nearly one-third of the total spent in the nation by the Chinese holiday makers. In July 2023, the short-term visitor arrival by China appreciated by almost 6.4x over the previous corresponding period. The three leading visitor source countries during the period were China, the USA and New Zealand.

In the June 2023 quarter, in the accommodation and food services segment, the private capital expenditure increased by 44.2% pcp and 26.4% QoQ.

In the March 2023 quarter, international tourist spending in Australia increased to 100% of the March 2020 level and stood at AUD 7.5 billion. The total arrivals during the reported period reached 1,743,390, up by 661,790 annually.

Key challenges

In July 2023, the retail trade growth through the year dropped to 2.1%, compared to 16.3% in July 2022.

Recent business update

Through an ASX update dated 4 September 2023, the company shared its intent to undertake a capital management initiative concerning AUD 250 million convertible notes, which matures in 2026. The initiative comprises a potential buy-back of notes and entering into an equity derivative arrangement up to exposure of AUD 150 million to get economic exposure to the dividend and price of the ordinary shares.

Outlook

The company witnessed a positive start to FY24 as TTV increased by over 30% on pcp (previous corresponding period), and bookings surged by over 30% on pcp in the WebBeds segment as of 27 August 2023. The webjet.com.au business segment reported an over 20% pcp surge in TTV and an over 5% pcp increase in bookings.    

The company is committed to differentiating product offerings with ROOMDEX and serving new markets.

Share performance of WEB

WEB shares closed 0.3% up at AUD 6.73 apiece on 25 September 2023. In the last 12 months, the share price has increased by 32.22% and dropped by 2.46% in the last six months.

The 52-week high is AUD 7.99 apiece, recorded on 31 July 2023, and the 52-week low is AUD 4.62 apiece, recorded on 3 October 2022. Noteworthy here is that today’s closing price is nearly 45.67% higher than its 52-week low.

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 25 September 2023. The reference data in this report has been partly sourced from REFINITIV.