Amid a flurry of solid results from mid cap stocks, a few stood out yesterday, with online travel group, Webjet justifying is market darling status of the past few months with a 20% surge in its share price.
At the same time, the company has further expanded into European travel and holidays in a $35 million deal, a few months after an $80 million move to expand its NZ holiday presence.
The result, a higher dividend, the expansion plans and comments about trading so far this financial year saw the company’s shares explode upwards by more than 18% to $9.52.
Webjet lifted full-year net profit 27% to $22 million, thanks to strong bookings growth. Revenue jumped 29% to $155 million in the year to June 30, compared to the previous year. The share price rose all day and ended at $9.70, up 20.5%.
The company will pay a final fully franked dividend of 8.0 cents a share, up from 7.25 cents, taking the full year figure to 14.5 cents, up from 13.5% a year earlier.
Webjet managing director John Guscic said all businesses in the group’s digital retail and digital wholesale divisions achieved strong bookings growth and increased market share during 201-16.
EBITDA (earnings before interest, tax, depreciation and amortisation) jumped 31.4% to $36.6 million, topping its previous guidance by more than $3 million.
Mr Guscic says Webjet has now reported 27 months of consecutive record top line revenue growth.
“Our planned growth strategy for the B2B division is delivering tangible results,” he says.
The company also announced a wholesale deal with Thomas Cook, one of Europe’s travel majors.
The agreement will see Sunhotels, Webjet’s European online accommodation business servicing the wholesale market, take responsibility for the majority of the volume of Thomas Cook’s hotel business.
Under the terms of the agreement, Webjet will pay Thomas Cook $35 million.
Webjet in June bought New Zealand-based vehicle rental group Online Republic for $80 million.
The move enables Webjet to expand its offering in car rental and enter the high growth motorhome rental market across the Tasman.
