LA Private

WEB strength confirms the return of the jet set

Everybody’s travelling and making money, or so it seems.

Qantas confirmed it on Tuesday with a forecast of a record profit for the year to June, and on Wednesday online travel services group Webjet added its big turnaround in the year to March 31.

Webjet’s performance was probably more stunning than what we saw from Qantas – a $150 million turnaround in its underlying EBITDA to $134.8 million for Webjet from the underlying loss of $15 million in 2021-22.

That helped investors push the shares up 3.8% to $7.58, a good performance when the wider market fell 0.63% yesterday.

While the online operator has been in the black now for more than a year, the difference with the previous year is that the past 12 months has been a steady rise in revenues and earnings thanks to the sharp improvement in customer activity, bookings and travel.

The year to March saw Webjet’s Bookings, Total Transaction Value (TTV), revenue, and earnings before interest tax depreciation and amortisation (EBITDA) “all up significantly compared to the same period last year,” the company told the market on Wednesday.

The company said that Group Bookings and TTV were ahead of pre-pandemic levels. “In the second half of FY23, Group Bookings, TTV, Revenue and EBITDA all exceeded the same period pre pandemic.”

WebBeds performed ahead of pre-pandemic levels on all key measures for 2022-23, with momentum accelerating in the second half. Its 2022-23 EBITDA of $117.1 million was 22% ahead of pre-pandemic levels and its March half EBITDA was 130% ahead of pre pandemic levels, according to Webjet’s Wednesday release.

Webjet said its online travel agency business “saw (a) strong rebound in international travel and continued to gain market share although high prices and capacity constraints subdued overall bookings. Webjet OTA reported an 2022-23 EBITDA of $43.4 million – which was 71% of pre pandemic levels.

The company’s GoSee’s business saw profitability increase with a financial year EBITDA of $1.6 million, up $4.6 million over 2021-22.” This continues to be impacted by lack of inbound tourism and supply chain issues in its largest markets.”

Guscic “This reflects all the efforts we took to make sure we would not only recapture demand when travel returned, but also further accelerate our growth profile,” Guscic said.

“The key driver of these results has been the outstanding performance of the WebBeds business. Executing against our transformation strategy is paying off – we have retooled that business, streamlined the technology platform, eliminated inefficiencies and found ways to service markets that had not previously been open to us.

“By continuing to find ways to get closer to our supply partners and better understand client preferences, in the longer term we believe WebBeds can deliver $10 Billion TTV while continuing to deliver best-in-class EBITDA margins.”

And the new financial year, Guscic was confident with a string start. “For the first seven weeks of trading, WebBeds Bookings and TTV are more than 35% and 40% higher respectively than for the same period last year. Webjet OTA is also delivering a solid performance with Bookings and TTV up more than 10% and 30% on the prior year. GoSee’s Bookings and TTV are up more than 15% and 5%.”

But he cautioned that there “is still widespread uncertainty in the global economy but we have never been more excited for our future. Momentum in the WebBeds business is accelerating, Webjet OTA has significant international potential, and GoSee is laying the foundations to pursue growth in the global motorhome and car rental markets.”

Webjet shares rose 4.5% to $7.63.