Webjet Limited

An Update on Voluntary Escrow Arrangements: Webjet Limited (ASX: WEB) has recently announced that escrow shares (796,772) which were issued in relation to the acquisition of JAC Travel Group (Holdings) Limited will be lifted on 13 March 2019 and subjected to be voluntary escrow arrangement. This is a positive development for the company. The company reported a healthy set of 1H FY19 numbers where in underlying revenue stood at $168.4 Mn in 1HFY19 and this translates to a growth of 28 percent as compared to 1HFY18 while underlying EBITDA grew by 37% coming in at $56.0 Mn. The EBITDA margin during the same period improved by 221 bps. This shows that the company has been able to grow its revenue without compromising its EBITDA margin. However, on the balance sheet front, the company has increased its borrowing from $122.7 Mn as on June 18 to $212.9 Mn as on December 18. The Cash flow from operations came in at -$26.1 Mn in 1HFY19 vs. -$14.5 Mn in 1HFY18.

The company’s business units have individually performed well in 1HFY19 Vs. 1HFY18, WebBeds revenue grew by 72% and EBITDA grew by 136%, WebJet OTA revenue grew by 12% and EBITDA grew by 11%, Online Republic revenue grew by 8% and EBITDA grew by 14%. The company increased its interim dividend from 8 cents to 8.5 cents. And, it will be payable on 18 April 2019 with the record date of 21 March 2019. The management reconfirms its FY19 guidance and remains on track to deliver $120 million EBITDA.

 

1HFY19 Financial Highlights (Source: Company Reports)

On the valuation front, the company is trading at an EV/EBITDA multiple of 19.4x vs. Industry EV/EBITDA of 8.5x, PE ratio of WEB is 29.3x vs. Industry PE of 21.9x, Price/Book of WEB is 3.3x vs. Industry Price/Book of 3.0x. These valuation parameters appear overvalued at the current juncture. The stock price has appreciated by 30.52% in the past three months and 24.84% in the past 1 month (as at 27 February 2019). On the technical analysis front, the RSI is at 75 and it is suggesting an overbought situation. Based on the above-mentioned conditions and the stock outperformance in the past 3 months, we consider the stock to be “Expensive” at this price point of $15.650 per share (down 0.824% on 28 February 2019).
 

Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.