Webjet (ASX: WEB) share price takes off after positive cash flow in the first half of the year

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The Limited webjet (ASX: WEB) The share price is rising this morning after the company released its first semester results.

Currently, Webjet’s stock price is up 0.72% to $ 5.63.

WEB share price

Source: Rask Media WEB stock market price 2 years

Webjet takes off after containment

The main results obtained for the first semester ended September 30 are as follows:

  • Total transaction value (VTT) of $ 663 million
  • Revenues of $ 55.4 million
  • EBITDA loss of $ 38.2 million
  • Cash reserves of $ 446 million
  • Deferred interim dividend 9 cents per share

While activity still lags behind pre-pandemic activity, it improved significantly in FY21.

TTV has been multiplied by 6, revenues are now positive and expenses have been reduced.

Source: WEB 1H22 Investors Presentation
Source: WEB 1H22 Investors Presentation

In fact, Webjet estimates that with normalization of trade, it will have cut 20% of its costs after the reduction in activity related to the pandemic.

WebBeds – its hosting platform for business to business customers – has been profitable since July with volumes reaching 63% of pre-pandemic levels.

Domestic activity in North America and Europe was the main driver, with other key markets yet to reopen.

Webjet online travel agency (OTA) returned to profitability in October 2021 as border closures in New South Wales and Victoria ease.

Subsequently, the company generated a monthly cash surplus of $ 3.5 million, compared to a cash consumption of $ 5.5 million throughout FY21.

This gave management the confidence to pay its deferred dividend starting in fiscal 20.

In other news, In line Republic – its car and motorhome search platform – has been renamed Will see.

More growth to come

The positive momentum of Webjet in the first half of the year is accelerating with third quarter trade higher than in the second quarter.

Management noted that in addition to bringing existing markets back online, it has expanded its geographic presence, which has provided it with a greater growth opportunity than before the pandemic.

Additionally, as more customers shift from in-person to online travel agents, Webjet OTA will be a direct beneficiary.

“Based on our current trajectory of market outperformance in our WebBeds and Webjet OTA businesses, we believe we will be back to pre-Covid reservation volumes by the second half of fiscal year 23 – October 2022 to March 2023 “

My opinion

Webjet seems to be on the right track.

I agree with management it will be a better business after the pandemic. But the significant fundraising undertaken by Webjet to keep the lights on has considerably diluted the shareholders.

For more on this, find out why I’m avoiding Webjet and Flight Center (ASX: FLT) shares.


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