Webjet to be cash flow positive in first half with post-COVID strategy "delivering results"

Webjet to be cash flow positive in first half with post-COVID strategy "delivering results"

Webjet managing director John Guscic.

Travel booking platform Webjet (ASX: WEB) anticipates it will be cash flow positive in 1H22 despite ongoing lockdowns in Australia and New Zealand, after implementing a post-COVID strategy to manage the pandemic’s effects.

In a statement released today, Webjet’s managing director John Guscic says the company’s post-COVID strategy is “delivering results”, with subsidiary WebBeds profitable in July and August.

The announcement comes after Webjet’s loss widened during its full year ending 31 March to $156.6 million, with EBITDA showing an even sharper decline to a loss of $125.3 million.

“Our post-COVID strategy is delivering results and the company will be operating cash flow positive for the first half of financial year 2022,” Guscic said.

“The WebBeds business was profitable in July and August and is well on track to be profitable in September. We have seen strong demand as travel restrictions ease in North America and Europe, suggesting significant upside as more international markets reopen.

“We see a world of opportunity for Webjet. All our businesses have significant potential to grow market share by expanding into new market segments and benefiting from consumers shifting to buy travel online.”

Guscic said transformation initiatives were underway, putting the company on track to reduce costs by at least 20 per cent once Webjet returns to scale.

“As a result, as conditions normalise, we believe our Webjet businesses will have higher market share, lower costs and greater profitability,” Guscic said.

“While the exact timing is uncertain as our growth opportunities are driven by the opening of borders, we know demand for travel will return and we are absolutely ready to capture it.”

Webjet will release its 1H22 results on 25 November 2021.

Shares in Webjet are down 0.36 per cent to $5.48 per share at 11.09am AEST.

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