The Webjet Limited (ASX: WEB) share price finished strongly today after the company presented its half-year results. It was a tale of two halves for the company as shares in the travel agent rebounded strongly after a disappointing start.
The Webjet share price finished the day strongly rising 5.02% to $5.02.
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Why the Webjet share price is flying
Despite the poor first half result, investors bid up the Webjet share price late on signs of growth. According to the AFR, the arrival of COVID-19 vaccines will provide more clarity about the triggers for opening domestic and international borders.
Speaking to the AFR, Webjet Managing Director, John Guscic, argued that it was realistic to seek clear policies. Especially given the ever-changing nature of the coronavirus.
Gusic stated:
I appreciate that the environment changes quickly, but you don't make policy up on the fly.
Mr. Guscic was speaking after the travel booking company announced its results for the first half of FY21. For the period, revenue plummeted to $22.6 million. This was a 90% drop from the same time last year. Overall, the company posted a hefty loss of $132.2 million down from the profit recorded last year.
Nonetheless, there were some positives in the result. Webjet retained a strong cash position of $283 million after its large capital raising last year. The current loss rate of $4.8 million gives the company just under 5 years before it will run out of cash.
What Now
Regarding the company's future, Webjet noted that it is focused on capitalising on the impending market recovery. Moreover, it is hoping that the structural shift from offline to online will provide the company with tailwinds moving forwards.
Commenting on the future and dividends, Chairman Roger Sharp said:
Given the uncertainties inherent in the current travel environment, Webjet is not providing earnings guidance for FY21, and has not declared an interim FY21 dividend. Further, the Company has deferred payment of its FY20 interim dividend payment, which was due to be paid on 16 April 2021. It will be reviewed again following 1H22 results later this year.
Webjet shareholders will now be looking forward to the company's FY21 results, which will be announced on May 19.
