The Webjet Limited (ASX: WEB) share price is in focus after the ASX travel share announced its FY24 first half result.
Webjet is a large online travel agency (OTA) business in Australia, and it also has a large business to business (B2B) called WebBeds, as well as a cars and campervans rental business called GoSee.
FY24 half-year result
These are some of the highlights for the six months to 30 September 2023:
- Total transaction value (TTV) rose 35% to $2.9 billion
- Revenue rose 39% to $244.5 million
- Underlying EBITDA (EBITDA explained) soared 41% to $102.1 million
- Underlying net profit after tax (NPAT) jumped 120% to $70.7 million
- Statutory NPAT grew 1,082% to $47.3 million
- Cash balance improved $120 million to $634 million
The ASX travel share boasted that WebBeds was significantly ahead of both HY23 and pre-COVID levels for all key metrics, with booking volumes up 50% on pre-pandemic levels, and EBITDA up 41% year on year (and up 23% compared to pre-COVID).
Webjet OTA saw a “material” increase in its international market share, with “strong growth” year on year – TTV is back to pre-COVID levels and HY24 EBITDA was up 24% year on year.
GoSee saw an improvement in profit too, with EBITDA rising 83% to $1.1 million.
Outlook for the Webjet share price
Webjet revealed that it’s expecting its FY24 EBITDA to be between $180 million and $190 million. The company said that global travel demand is resilient.
WebBeds is expected to see continued record performance in terms of the second half EBITDA. The Webjet OTA segment’s EBITDA is expected to be consistent with the first half of FY24. GoSee EBITDA is also expected to be consistent with the first half of FY24.
The company is planning to release its FY24 result on 22 May 2024.
Webjet shares aren’t paying a dividend with this result, but a decision on the dividend outlook will follow at the FY24 result in May 2023.
The Webjet share price has fallen more than 15% since July 2023. It’s good to see that profit is increasing, but profitability seems to have largely recovered on a monthly basis following COVID-19. Hopefully increases in airline international capacity can deliver more growth.
If WebBeds can keep growing earnings then it may be cheap, but I wouldn’t buy at this stage. I think travel demand may reduce in the short-term if people decide to close their wallets amid the cost of living changes.