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Travel booking platform Webjet (ASX: WEB) has today told shareholders its group bookings for the first half of FY23 are tracking at 95 per cent of pre-pandemic levels and that all three of its businesses are profitable for the financial year to date.
Webjet, which reports its full year results on a period ending 31 March each year and its half year ending 30 September, says cash surplus from operations is expected to be more than $100 million as at 1H23.
It follows a return to profitability during FY22 for Melbourne-based WebJet, which was driven by North American and European market recovery, reduced expenses, and improvements to cost efficiencies.
According to John Guscic, the managing director of Webjet which owns hotel booking platform WebBeds, flight booking site webjet.com.au, and car rentals business Gosee, the company has had an “exceptional” northern hemisphere summer trading period.
This period saw bookings ahead of pre-pandemic levels since May, while August was the record total transaction volume (TTV) month in the history of WebBeds.
“By driving efficiencies and pivoting our focus to target growth wherever we saw opportunities, we’ve seen our market share grow and EBITDA margins are on track to be higher than 50 per cent for the first half of FY23,” Guscic says.
“During the peak seasonal months of July and August, we hit our aspirational “8/3/5” profitability target and we have full confidence that EBITDA margins will expand beyond pre- pandemic levels as the business continues to scale.
“WebBeds has so much opportunity ahead of it. All the things we’ve done to transform the business means we are confident growth will continue for the remainder of FY23, despite all current well documented macro headwinds.”
Guscic adds the company’s strategy to return the business to pre-pandemic levels has been playing out as planned.
“Before Covid hit, Webjet was delivering $157.8 million in EBITDA. When travel stopped, we did the hard work necessary to transform our businesses to ensure they would emerge more efficient, more profitable and with higher market share when travel returned. We are now seeing our strategy play out,” Guscic says.
“Based on current performance, we expect the company to exceed pre-pandemic earnings in FY24, well ahead of when the broader travel market is anticipated to return to 2019 levels.
“We are excited for the limitless opportunities that lie ahead.”
The announcement has seen Webjet shares take off this morning, up 8.02 per cent to $5.52 per share at the time of writing.
It also follows the release of FY22 reports from competitors Flight Centre (ASX: FLT) and Helloworld (ASX: HLO), which both saw results improve after travel restrictions eased globally throughout the period.
Flight Centre reported a loss of $360.9 million in FY22, an improvement of 29 per cent on its $570.1 million loss incurred during the peak of the pandemic disruption to the travel sector.
However, the company’s TTV improved dramatically by about $6 billion - up from $3.95 billion to $10.3 billion in FY22. Revenue also more than doubled from $396 million in FY21 to $1 billion.
Helloworld meanwhile chalked up a full year statutory profit of $90 million, backed by a 140 per cent increase in group TTV to $1.08 billion.
The company also reported a $10.6 million EBITDA loss from continuing operations, compared to a $24.5 million earnings loss in the prior year.
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