Strong sales growth continued at Webjet but costs grew faster than revenue as the online retailer’s net profit dropped -8.5% to $17.5m for the year to June 30.
One analyst called it a “solid” result muddied by several “one-off costs”, a couple relating to new European acquisition SunHotels, which failed to meet forecasts.
It also rather oddly included staff performance bonuses of $1.2m as a one-off cost, thereby implying that wouldn’t happen again.
Once again Webjet.com.au was the cash cow, growing at a good clip despite the general travel retail malaise encapsulated by the current negativity surrounding Flight Centre, Australia’s largest travel retailer.
Same-store trade at FLT is sluggish and the company is trading at near 12-month lows on the Australian Stock Exchange.
But online things are different.
Bookings at Webjet.com.au grew 17%, the fastest growth coming from international at +35%.
Domestic still dominates revenue however with 66% share.
All this meant the red website generated 80% of the company’s earnings: $22.4m out of $27.9m EBITDA.
It also contributed 65% of turnover: $831m out of $1,266m.
Meanwhile, online retailer Zuji’s EBITDA profits fell $2m to $1.6m, hampered by its under-performing Asian unit.
Webjet’s growing B2B division did both good and bad.
On the downside, new acquisition SunHotels made much less than forecast: $1.7m earnings before interest, tax , amortisation and depreciation.
Its result was hit by an unexpected foreign exchange loss of $1.9m due to a multitude of complex currency issues for the European based hotel wholesaler.
This is something Webjet obviously struggled with but management says it now has an effective hedging strategy and most contracts have been switched to Euro.
When Webjet bought SunHotels it said the company had earnings before interest, tax, depreciation and amortisation of $3.75m with “2014 tracking significantly higher”.
So not a good look on that front and vague echoes of Zuji’s under-performance when acquired a few years ago.
On the upside was Lots of Hotels, a business started by Webjet, which continues to surprise in the in the Middle East.
It contributed $2.3m in EBITDA after losing 200k last financial year, quite a turnaround.
Other nuggets include:
- Revenue grew 20.8% to $119.1m
- Costs rose 21.1% to $91.3m
- Tax increased 191% from $2m to $5.7m
- Package sales up 47% to $44m year on year
- Hotels steady at $40m
- Mobile booking surged 160% to $68m
- Overall margins shrunk from 10.2% to 9.4%
Its 2nd half dividend was the same as last year at 7.25 cents.