THE attempt by Australia’s leading online travel company, Wotif.com, to put a floor under its share price by announcing a profit upgrade has failed dismally.
Wotif recently announced that its forecast profit for 07/08 will be around $34.5m – 30% more than the previous year’s result of $26.4m.
But the company’s share slide continued, at one point reaching an all-time low of $2.75. They are now around $2.86, way off the 12 month high of $6.25.
The one-time market darling has come right back to the pack since it announced its bid for Travel.com.au last November.
Of course the whole market has come down since then, but it’s worth noting that at the time Wotif, which paid 57 cents for each TVL share, was trading at around $6.
By the time deal was consummated in January, the Wotif share price was down to around $5.25.
Pity the TVL shareholders who opted to swap their scrip for Wotif shares at that rate rather than take the cash and run.
Not that Webjet, Wotif’s rival for TVL, is doing better.
Webjet, which also recently announced a profit upgrade a couple of months ago, last sold for $1.15, well off a year high of $1.80 or so.
Recent trade in the stock has been very thin and doesn’t look like picking up any time soon.
Travel Trends: July 10, 2008