Web Travel Group (ASX:WEB) has reported mixed results for the half-year ending 30 September 2024, its first reporting period since the demerger of its B2C businesses.
The demerger, finalised on 30 September, saw Web Travel retain its WebBeds B2B travel marketplace, while Webjet Group, now operating separately, took over the B2C divisions, including Webjet OTA and GoSee.
The company’s WebBeds division recorded a 25% increase in total transaction value (TTV) to $2.59bn, driven by a 23% growth in bookings and strong performance across all regions. Revenue rose slightly by 1% to $170.4m, but TTV margins declined from 8.1% to 6.6%. The margin contraction was attributed to a shift in geographic and customer mix, increased reliance on lower-margin third-party suppliers, and higher-than-expected customer incentive payments. Additionally, operating expenses rose 14%, reflecting investments in headcount and technology.
Underlying EBITDA fell by 11% to $70m, reflecting the lower margins and higher expenses, while net profit after tax (NPAT) from continuing operations increased 6% to $37.5m. Including gains from the demerger and discontinued operations, total NPAT surged by 443% to $228.1m.
The company remains well-funded with $510m in cash as of 30 September 2024, despite a $120m decrease due to demerger-related cash allocations and investments.
Alongside its results, Web Travel also announced today a $150m share buy-back program aimed at enhancing shareholder value and reducing potential dilution from its convertible notes.
Managing Director John Guscic acknowledged challenges during the period, including the collapse of FTI Group, the Paris Olympics, and European football championships, which impacted TTV margins. However, he reaffirmed the company’s commitment to stabilising margins at approximately 6.5% in the medium term and achieving a long-term EBITDA margin target of 50%.
Guscic stated, “WebBeds remains one of the fastest organically growing travel brands globally, and we are confident in our path to deliver profitable growth.”
Shares are trading 12.53% higher at $4.76.