The Webjet Group (ASX: WJL) share price is in focus after the ASX travel share reported its FY25 first-half result.
Webjet is best known for its online travel agency (OTA) services in Australia which allows people to book flights and hotels.
Webjet FY25 first-half result
Webjet reported its result for the six months to 30 September 2024.
In this result, the business is reporting how it performed now that it has split from WebBeds, which used to be part of the Webjet business.
Here are some of the highlights comparing its underlying operations, enabling comparability to the last period, to show the performance of the remaining business compared to FY24:
- Bookings declined 8% to 783,712
- Total transaction value (TTV) dropped 8% to $752 million
- Revenue declined 1% to $72 million
- EBITDA rose 1% to $19.4 million
- Net profit up 2.2% to $9.2 million
- No dividend (yet)
Webjet explained that bookings, TTV and revenue declined due to the challenging macroeconomic conditions impacting domestic flight bookings.
However, within those numbers, the Webjet OTA first half revenue and EBITDA were up thanks to higher margin products helping offset the subdued domestic bookings environment.
Webjet OTA revenue per booking is now higher than it was before the pandemic thanks to higher margin ancillary (extra) products now being 35% of revenue, and international being 20% of total flight bookings.
GoSee, which provides car and campervan rentals, continues to be “challenged”, with car bookings down in line with subdued domestic flights and motorhomes impacted by reduced long-haul inbound tourism.
GoSee has identified $4 million of annual operating expenses in a strategic review that could be cut. A ‘restructuring’ is underway, with around $1 million of savings expected in the second half of FY25.
Webjet also said that the Trip Ninja software product “continues to deliver value for Webjet OTA and explores its international opportunities.”
The ASX travel share warned that the Australasian economy “remains slow”, and the ongoing cost of living pressures continue to subdue demand for travel, particularly for domestic travel. The REX administration has also impacted bookings.
Dividends to start in FY26
The company said that its strong balance sheet means the company is well placed to pursue growth, with net cash of $100.7 million in net cash.
Management also revealed that dividends are expected to start from FY26. The dividend policy will be announced at the FY25 result in May 2025.
Outlook for the Webjet share price
The Webjet Managing Director Katrina Barry said:
Looking forward, the macro-economic environment continues to be challenging and given our brands are consumer facing, Webjet Group will not be immune. However, we remain optimistic on the broader medium-term outlook. As outlined in our demerger investor presentation, we have clear and robust strategic priorities to deliver growth and enhance our leadership positions in online travel marketplaces.
Our planned initiatives are progressing well with several showing exciting potential and we are accelerating investment in technology platforms and other key growth drivers. With the demerger now behind us, Webjet Group is solely focused on growth, and we look forward to sharing more about our plans to take the company to the next horizon at our strategy day in March 2025.
This company seems like it’s exposed to cyclical economic forces, so it could be good to invest during times of weakness, such as this period.
If there’s a good time to buy, I think it is now or within the next few months, so I’ll be considering it following its double-digit decline of the share price over the last month or two.
Webjet shares could be one of the leading ASX growth shares to consider today.