The Webjet Limited (ASX: WEB) share price soared higher today by almost 11% after reporting its half-year result to 31 December 2019.
Webjet's pleasing profit numbers
As expected, Webjet reported a mixed set of results. The statutory numbers were down because of the Thomas Cook collapse, but the underlying numbers (which excludes one-offs) were very good.
Total transaction value (TTV) was up 25% to $2.33 billion. Revenue went up 24% to $217.8 million.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 43% to $86.3 million with the underlying EBITDA margin improving by 523 basis points, or 5.23%, to 39.6%.
WebBeds was the key driver of this operating strong result with bookings up 53%, TTV up 42%, revenue up 50% to $127.5 million, EBITDA up 81% to $57.3 million and the EBITDA margin improving by an excellent 775 basis points (7.75%) to 45%.
The Webjet OTA result was still okay with bookings up 1%, TTV up 3%, revenue up 1% and EBITDA flat.
Webjet's underlying net profit rose by 36% to $43.2 million and underlying earnings per share (EPS) increased by 22% to 31.9 cents.
However, due to the one-off write-off of $44 million of unpaid receivables because of Thomas Cook, statutory net profit fell by 64% and statutory earnings per share (EPS) dropped 68%.
The strength of the balance sheet and cash conversion allowed Webjet to declare an interim fully franked dividend of 9 cents per share, which was an increase of around 6%.
Outlook
Webjet is now expecting its FY20 underlying EBITDA to be between $147 million to $165 million, which would be growth of 14% to 28% because of the coronavirus, which is expected to reduce second-half EBITDA by between $7 million to $15 million.
However, I think that FY21 could be an exciting year assuming no other disruptions to earnings. It's trading at 15x FY21's estimated earnings – this looks cheap if it isn't acquired before FY21. There was talk of a takeover before the coronavirus hit the global travel industry.
