Australia's Webjet surges on solid annual results, demerger plan

Web Travel

22/05/2024 02:37

By Ayushman Ojha
       May 22 (Reuters) - Shares of Australian travel services
provider Webjet  WEB.AX  rose to a more than four-year high on
Wednesday, after the company posted an 84.5% jump in profit and
unveiled plans to separate its two leading travel divisions. 
    Webjet stock rose as much as 15.2% to A$9.72, the highest
since February 2020, while the benchmark index  .AXJO  was 0.2%
higher. The stock has risen nearly 24% so far this year compared
with 3.6% gain for the benchmark. 
    The company posted a underlying net profit after tax of
A$128.4 million ($85.59 million) for fiscal year 2024 on
Wednesday, significantly higher than A$69.9 million reported
last year.
    Analysts at Citi said the profit was largely in line, with
both the company's major operating divisions delivering results
as expected.
    The company also said it is exploring the demerger of its
two divisions, WebBeds, which is the business-to-business (B2B)
wholesale division, and Webjet B2C, which includes Webjet OTA,
GoSee and Trip Ninja. The two companies are expected to be
listed on the Australian Securities Exchange.
    Analysts at Jarden said the proposed separation could drive
a significant re-rating of the capital light, high growth, high
return on invested capital for business-to-business division.
    For the WebBeds division, bookings for fiscal 2024 were up
26% on the back of accelerating growth in Asia Pacific and North
America. The division's earnings before interest, taxes,
depreciation, and amortization was 39% higher.
    "The key driver was the performance of our WebBeds business
which continues to go from strength to strength. All metrics are
at record levels," Webjet's Managing Director John Guscic said.

    
($1 = 1.5002 Australian dollars)

 (Reporting by Ayushman Ojha; Editing by Mrigank Dhaniwala)
 ((Ayushman.Ojha@thomsonreuters.com;))