ONLINE travel retailer Webjet’s year-on-year sales growth has slowed during a period of heavy marketing, according to September results for the company.
The results also show that Webjet’s cash reserves have grown to A$25.5 million – almost a quarter of its market capitalisation – with no word yet on what the company will do with its windfall.
In the September quarter, Webjet’s pre-tax profit increased 15% to A$1.2 million compared with the A$950,000 it made for the same period one year ago.
Total Transaction Value increased by 52% year on year to A$60.2 million – a record period for the company but well behind comparative growth for the June (110%) and March (93%) quarters.
Yet the slower growth was accompanied by a tripling of the Webjet advertising budget for the quarter – A$1.2 million compared with A$400,000 for promotion over the same period last year.
Webjet has said it will continue this aggressive marketing approach.
Another feature of the September results is the skinnier 1.8% pre-tax profit margin – a 20% fall on the 2.2% margin the company enthusiastically reported for the March quarter.
Webjet’s annual meeting is scheduled for November 2 when the company will elaborate on its future plans, in particular the A$25 million it is sitting on.