Webjet’s profit collapsed -52.4% to $6.5m in the year to June 30. The acquisition of Zuji earlier this year did most of the damage – $7m to be accurate: $5.4m in “acquisition and transition costs” plus another $1.6m in trading losses.
The launch of Lots of Hotels in Dubai was also expensive with costs running to $2.3m. Managing Director John Guscic said all these costs had been expected, though they had not previously been flagged.
Apart from a line in the financials, there was no mention of the profit drop in Webjet’s ASX statement, which was headlined “Continued Growth in Core Earnings”.
It promoted a “normalised profit after tax” of $14.4m, up 5.6% over last year, and higher margins.
In his comments, Mr Guscic said: “We are pleased with the continued strong positive growth in contribution achieved in a generally flat leisure travel market, with Webjet continuing to post gains in market share.”
He said Zuji was profitable in July and that “we expect” Lots of Hotels to start making money this financial quarter.
But there’s still a way to go with Zuji.
The migration of Zuji’s Australian business onto the Webjet platform is done but the integration of the Hong Kong and Singapore systems will not be complete until December.
See Webjet release here.