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- After a couple of turbulent years due to COVID-19, online travel agent Webjet (WEB) is preparing for business to take off in the new year as booking volumes increase
- Webjet delivered a cash surplus of $3.5 million per month in the first half of FY22, compared to a $5.5 million average monthly cash burn in FY21
- Additionally, shareholders will be receive a deferred FY20 interim dividend of 9 cents per share
- Based on reduced costs, enhanced technology, strong customer service, and product innovation, Webjet is confident in its position to take advantage of the industry’s recovery
- On the market this afternoon, Webjet is up 0.81 per cent and is trading at $5.64 per share
After a couple of turbulent years due to COVID-19, online travel agent Webjet (WEB) is preparing for business to take off in the new year.
As we enter the tail end of the severity of COVID-19, global travel markets are starting to reopen thus creating a business turn around for the travel industry.
Webjet is an example of this with reporting a rapid return to high booking volumes as borders reopen.
During H1 FY22, it delivered a cash surplus of $3.5 million per month, compared to a $5.5 million average monthly cash burn in FY21.
Over the first half, the company increased its cash position to $446 million, up from $431 million as of March 31, 2021. This strong cash position provides significant liquidity and runway, as well as the ability to pursue attractive growth opportunities.
Shareholders will also be receiving a deferred FY20 interim dividend of 9 cents per share which will be paid just before Christmas.
The company attributed the first half results to its WebBeds accommodation business producing positive cash since July. The division also reduced costs by 31 per cent compared to pre-COVID and is on track to be 20 per cent more cost efficient at scale.
Webjet Managing Director John Guscic commented on the half-year performance.
“Our decision to target new domestic opportunities while international markets were closed and expand WebBeds’ presence in the large North American business-to-business market has returned that business to profitability,” he said.
“The half year results have demonstrated the power of Webjet’s geographic diversification and ability to sharply focus resources on those markets and customer segments that exhibit the earliest recovery patterns.”
“The opportunities are significant with pent up demand evident globally as we see travel snapping back as markets open. Our reduced cost base, enhanced technology and strong customer service ethos, in conjunction with a culture of constant product innovation, places us in a powerful position to capture bookings as the recovery continues.”
However, there is still a risk of uncertainty with pockets of new outbreaks around the world but the company remains confident.
“We believe ongoing vaccinations, boosters and anti-viral treatments will stabilise the impact of Covid within the next six to 12 months,” Mr Guscic said.
Notably, Webjet is expecting to be back to pre-COVID booking volumes by the second half of FY23.
On the market this afternoon, Webjet was up 0.81 per cent and is trading at $5.64 per share at 2:23 pm AEDT.
