Webjet shares have rocketed to late 90s dot com boom levels – trading on a price earnings multiple of 40x – after posting strong results this morning and announcing it will add another 3000 European hotels to its inventory in a deal with Thomas Cook. 

The shares at one point hit $10 and are up around 17% after MD John Guscic announced that net profit for the 2015/16 year had increased 27% to $22.2m.

Total turnover was up 28% to $1.63 billion.

He said all businesses experienced strong organic growth and that the company continues outpacing the  general market.

“All businesses in both our digital retail (B2C) and digital wholesale (B2B) divisions experienced strong organic bookings growth and market share growth during the year,” he said.

“The B2C division continues to benefit from the ongoing acceleration of bookings shifting online.

“Webjet has now reported 27 months of consecutive record TTV with bookings growth outperforming the market by more than five time and international bookings continuing to demonstrate superior growth.

“Zuji continued to grow substantially with TTV up more than 40% in Asia. The integration of Online Republic is underway and progressing well.

“Our planned strong growth strategy for the B2B division is delivering tangible results with strong TTV and revenue growth coming through Lots of Hotels and Sunhotels.”

Webjet announced that Sunhotels, its accommodation wholesaler, will pay Thomas Cook  £21 million to “take responsibility for the majority of the volume of Thomas Cook’s complementary hotel business.

“As part of the new deal, Thomas Cook will transfer around 3000 hotel contracts from across the grouop to Sunhotels.

“These will be added to Sunhotels’ existing inventory (and) also provided to Thomas Cook under the terms of the agreement.

“Sunhotels will also take responsibility for managing an improved health and safety audit process, esnuring greater certainty and consistency in the qaulity of the customer offering.”

Peter Frankhauser, CEO of Thomas Cook, said the Webjet deal “provides us with a low-cost production platform for our complementary offer across all our source markets, enabling us to streamline our systems and processes while at the same time ensuring greater certainty over the quality of hotel we offer our customers.”

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