Webjet releases half year results and warns of coronavirus impacts

The Webjet Limited (ASX:WEB) share price will be on watch today following the release of its half year results. Here's what you need to know…

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

All eyes will be on the Webjet Limited (ASX: WEB) share price this morning following the release of the online travel agent's half year results.

How did Webjet perform in the first half?

For the six months ended December 31, Webjet reported a 25% increase in total transaction value (TTV) to $2,334 million. The key driver of this growth was its rapidly growing WebBeds business. It reported a 42% increase in TTV to $1,470 million. This was supported by a 7% increase in Online Republic TTV to $156 million and a modest 1% lift in Webjet OTA TTV to $708 million.

This led to Webjet posting half year revenue of $217.8 million, which was an increase of 24% on the prior corresponding period.

Thanks to a sizeable 523 basis points increase in its underlying EBITDA margin, underlying EBITDA came in 43% higher than a year earlier at $86.3 million. This underlying result excludes the write off of $44 million in unpaid receivables following the collapse of Thomas Cook. Including this one-off, statutory EBITDA would have been down 14% to $46.4 million.

On the bottom line, underlying net profit after tax (before acquisition amortisation) jumped 44% to $55.1 million and earnings per share rose 29% to 40.7 cents. This, combined with its strong cash flows and robust balance sheet, allowed the board to declare a fully franked interim dividend of 9 cents per share. This was an increase from 8.5 cents per share a year earlier.

Webjet's managing director, John Guscic, was pleased with the half and the progress it is making towards its targets.

He said: "We are delighted to have produced another record half year, with NPAT (before AA) up 44% to $55.1 million on TTV of $2.3 billion. We continue to grow strongly and are tracking ahead of plan to deliver our "8/4/4" (1) profitability target."

Outlook.

Looking ahead, Mr Guscic warned that the coronavirus outbreak will have an impact on its business in the second half.

He said: "Based on our 1H20 performance and TTV growth in January 2020, we would have been upgrading our previous FY20 EBITDA guidance. However, we are seeing an impact on bookings and TTV across all our businesses as a result of the current COVID-19 outbreak which will impact 2H20 EBITDA."

Mr Guscic advised that the WebBeds business has experienced a material slowdown in China, as well as some impact in the APAC, Europe and AMEA regions. Webjet OTA's package tours business, which has a high reliance on China product offerings, has also experienced slowing demand. And finally Online Republic's Motorhomes and Cruise divisions have been impacted.

The chief executive officer warned that it is very challenging to predict with certainty the expected impact on its results. At this stage, the company's best estimate is a reduction in second half EBITDA of between $7 million to $15 million.

As a result, Webjet's s FY 2020 EBITDA guidance is now expected to be between $147 million to $165 million. This represents an increase of 14% to 28% over FY 2019's EBITDA. This compares to its AGM guidance of $157 million to $167 million.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Frustrated and shocked business woman reading bad news online from phone.
Broker Notes

Guess which ASX 200 share Goldman Sachs just downgraded

The broker is calling time on this stock's rally.

Read more »

Contented looking man leans back in his chair at his desk and smiles.
Share Market News

5 things to watch on the ASX 200 on Thursday

Here's what to expect on the local market today.

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Broker Notes

These ASX 200 shares can rise 20% to 50%

Let's see which shares are being tipped to rocket from current levels.

Read more »

The silhouettes of ten people holding hands with their arms raised against the sky, as the sun rises or sets in the background.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors panicked when the latest inflation figures came out today.

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Broker Notes

Why Guzman Y Gomez shares are a sell

Goldman Sachs has given its verdict on the burrito seller.

Read more »

A man pulls a shocked expression with mouth wide open as he holds up his laptop.
Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys this week.

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
Share Gainers

Why Mac Copper, Pro Medicus, Web Travel, and Yancoal shares are pushing higher today

These shares are having a good time on hump day. But why?

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why ALS, Fisher & Paykel Healthcare, IPD, and Predictive Discovery shares are falling today

These shares are having a tough time on hump day. But why?

Read more »