Web Travel shares rocket on bookings growth, $150m buyback
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More news: Web Travel Group shares jumped in early trading after the B2B travel company reported double-digit growth in first-half bookings and total transaction value (TTV), and announced a $150 million share buyback.
Web Travel shares were up 10.64% to $4.68 by 10:23am AEDT, having shed more than 25% since the turn of the year.
Meanwhile, shares in Webjet Group, which demerged from Web Travel in September, rose 6.29% to 89 cents, despite the company reporting a downturn in first-half bookings and TTV on Tuesday.
Web Travel profit falls, unveils $150m buyback
The news: Web Travel Group reported a drop in profit but posted double-digit growth in bookings and total transaction value (TTV) at its wholesale bookings business WebBeds during the first half of the financial year. It also unveiled a $150 million share buyback.
The numbers: Group underlying NPAT fell 6.3% to $52.5 million while group underlying EBITDA lowered 8% to $70 million.
WebBeds bookings grew 23% year on year to 4.3 million while TTV climbed 25% to $2.59 billion.
Group revenue edged up 1% on the prior corresponding period to $170.4 million as expenses grew 8%, reflecting planned investment in headcount and technology.
Web Travel said it expects FY25 EBITDA to be between $117 million to $122 million. It also forecasts TTV margins to stabilise at 6.5% and reaffirmed its TTV target of $10 billion in FY30.
Elsewhere, Web Travel plans to conduct a share buy-back of up to $150 million, expected to commence next month. The move aims to reduce potential future dilution from the company's $250 million convertible notes due in 2026. The prices paid for shares purchased under the buyback will be no more than 5% above the five-day volume-weighted average price, it said.
The context: Web Travel said the first two months of trading in the first half of FY25 continued to reflect the previous six-month trading conditions which saw TTV margins decline in Europe. The decline coincided with the collapse of tour operator FTI Group, the Paris Olympics and the European Football Championships.
"We underestimated this decline and the extent of changing market conditions and customer mix, and underlying margins did not recover in August as anticipated," Web Travel's managing director John Guscic said.
Web Travel shares dived last week after the company, which demerged from its B2C spin-off Webjet Group in September, postponed the release of its first-half results. The company said it required additional time to address technical accounting considerations as a result of the "significant complexities" of the demerger.
The sources: ASX announcement, ASX announcement
