The Web Travel Group Ltd (ASX: WEB) share price is pushing higher on Wednesday morning.
At the time of writing, the travel technology company's shares are up 14% to $4.82.
This follows the release of the WebBeds owner's first half-year results since the demerger of its Webjet Group (ASX: WJL) online travel agency.
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Web Travel share price jumps on results day
- Bookings up 23% to 4.3 million
- Total transaction value (TTV) up 25% to $2.59 billion
- Revenue up 1% to $170.4 million
- Underlying EBITDA down 8% to $70 million
What happened during the half?
For the six months ended 30 September, Web Travel reported a 1% increase in revenue to $170.4 million. This reflects weaker margins, which largely offset strong booking and TTV growth over the prior corresponding period.
Commenting on the company's performance, managing director John Guscic said:
Following a record FY24, WebBeds' first two months of trading in 1H25 continued to reflect the previous 6-month trading conditions. In the period of June and July, TTV margins declined in Europe. The decline coincided with the collapse of FTI Group, the Paris Olympics and European football championships.
We underestimated this decline and the extent of changing market conditions and customer mix, and underlying margins did not recover in August as anticipated.
We also underestimated the incentive payments during August (at the time of the AGM) which were $7.5 million higher than planned, representing a decline of 0.3% of the TTV margin in 1H25.
Combined with an 8% increase in expenses, this ultimately led to underlying EBITDA falling 8% to $70 million and underlying group net profit after tax coming in at $52.5 million.
Outlook
The company revealed that its top line growth has continued in the second half.
For the first seven weeks of trading for the second half, TTV is up 23% and TTV margins were at 6.5% in October.
Based on current trading, management is expecting FY 2025 EBITDA to be between $117 million to $122 million.
Looking further ahead, Guscic advised that he expects the company's margins to recover next year. He said:
In the universe of global publicly traded companies, WebBeds remains one of the fastest organically growing travel brands. The business is highly scalable and efficiencies now in place give us confidence we will return to our c. 50% EBITDA margin target in FY26.
The Web Travel share price is up 20% since this time last month.
