Webjet shares soar on profit jump, demerger plan
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More news: Shares in Webjet soared 11% to $9.37 in early trading on the ASX after the travel bookings provider reported its full-year profit quadrupled and outlined a plan to separate its wholesale WebBeds business from the consumer facing businesses.
UBS analysts called the B2B results "impressive" and noted improving revenue and margins more than offset softening domestic transaction value in the consumer businesses. UBS has a 'buy' rating on the stock with a price target of $10 a share.
Webjet flags demerger after full-year profit jump
The news: Travel bookings provider Webjet has posted a sharp jump in full-year profit and flagged a likely demerger of its WebBeds wholesale bookings business from the consumer facing business.
The numbers: Net profit for the year to 31 March quadrupled to $72.7 million, while revenue jumped 29% to $471.3 million. The group’s underlying earnings were up 40% to $188.1 million, with total transaction value up 29% to $5.59 billion. It will pay no dividend.
The context: Webjet managing director John Gusic said the record earnings were driven mostly by its WebBeds division, which helps hotels sell rooms to travellers. The B2C businesses also continued to see strong growth as capacity returned in the international flights market.
In a separate statement, Webjet said it is exploring a separation of its two arms — WebBeds and Webjet B2C (which includes Webjet online travel agency, GoSee and Trip Ninja) — into two listed ASX entities.
Chair Roger Sharp said the board had carefully weighed up the arguments for and against a demerger. While the B2C businesses will continue to deliver organic growth through the shift to online, the separation will support the WebBeds business in its focus on achieving scale in all markets, he said.
The sources: ASX announcement, ASX announcement
