Wotif.com (WTF) has cut its interim dividend after revealing an 18% fall in first-half earnings to $22.6 million, compared with $27.5 million in the first half of 2012-13.
That’s despite the figure being at the top end of its guidance issued in December, which confirmed the group was suffering rising cost pressures and margin compression.
The online travel group said the fall in earnings was primarily related to its increased spending on marketing.
Wotif said first half revenue of $75.8 million was a record and up 3.5%, but none of that stuck to the bottom line as those higher costs took their toll.
Total transaction values in its core accommodation business fell 6% to $501 million but flights transactions rose by 44% to $90.8 million.
The company cut interim dividend to 10c a share down from 11.5c for the six months to December 2012.
The shares eased at first, then rose by around 0.7% to end the day on $2.78.
WTF vs FLT 2Y – Wotif struggling, cuts dividend
The company says the dip in net profit was "primarily due to increased costs from strategic investment in marketing and information technology" it outlined to the market back in June last year.
This refers to increased online competition from companies such as Expedia.
Wotif said it spent an additional $4.5 million on marketing in the December 31 half year, compared with the level of spending a year earlier.
Much of the profit fall was tied up in that extra spending on marketing.
