Some fund managers with big holdings on WEB kissing goodbye performance fees, with today’s 30% drop.

I can’t help, but think that today’s updated news was delayed to push through the demerger?

Note: Holder, so also suffering. Ouch!

@Strawman Just checking when the demerged WJL from WEB will hit Strawman accounts?

WJL has started trading today but it’s on a deferred settlement basis.

Why i own this. Link works now

https://www.canva.com/design/DAF0GswmqEM/RoiKdO429P55l40JeASE_Q/edit?utm_content=DAF0GswmqEM&utm_campaign=designshare&utm_medium=link2&utm_source=sharebutton

Why i own this

https://www.canva.com/design/DAF0GswmqEM/RoiKdO429P55l40JeASE_Q/edit

WebBeds: Ahead of pre-pandemic levels on all metrics in 2H23 • Webjet OTA: 2H23 TTV at pre-pandemic levels; maintained domestic market share while growing international • GoSee: EBITDA continues to improve

WEBJET LIMITED (ASX:WEB) - Ann: AGM Managing Director's Presentation, page-1 - HotCopper | ASX Share Prices, Stock Market & Share Trading Forum

Return (inc div)   1yr: 45.40%   3yr: 26.85% pa   5yr: -8.89% pa

*No dividend paid

Net Profit Margin:8.95%

Board & Management - Webjet Limited

End of year results summary (March 31st is the year end).

The Good

• Cashflow positive, generated $4m/month in FY22
• Revenue up 466% on pcp
• Expenses of $153m are a huge reduction on the CY21 figure of $251m
• Revenue is growing much faster than expenses. WebBeds business is on track for each 8% of revenue increase to be acheived with only 3% of increase in expenses
• Total transaction value in North America is twice what it was pre-covid
• 10 of the top 25 markets for WebBeds are trading at or above pre-covid levels
• Market share of Webjet (the travel agency) has grown thanks to smaller players being shaken out of the market, but also because of Webjet's superior technology and service offering. Now 10% compared to 5.6% pre-covid

The Bad

• Revenue of $138m is still a long way from the pre-covid (CY19) level of $409m
• Flight Centre revenue last year (to Aug '21) was $400m, whilst covid lockdowns were still widespread, so WEB is clearly a poor second place to FLT despite claiming to be the market leading online travel agency
• Share dilution continues after the massive capital raising which doubled the share count in 2020. The preferred financing method apart from CRs seems to be issue of convertible notes. The settlement of a 110m Euro note this year added 40m shares, an increase of nearly 12% of the shares on issue

The Ugly

• The campervan and car hire business has had another rebranding to GoSee. The revenue from this business was way down on last year due to lack of international travel, and it pulled in a loss. Revenue is only a quarter of the travel agency business (Webjet), which in turn is only a half of the B2B hotel booking business (WebBeds). I don't know why they bother with this business, it just seems a distraction from the main prize, which is to increase Webjet market share in ANZ and to further the penetration of the North American market by WebBeds.
• The investor presentation uses the word profitable 18 times, never with 'not' in front of it, yet the bottom line is the company made a loss of $85m. I dislike like this kind of smoke and mirrors reporting. On the plus side the loss has greatly reduced from the $156m loss in FY21, which only covered a 9-month period

Takeaway

Webjet has come through covid (which of course is far from over yet) in great shape, with a much leaner cost base, more differentiated technology-backed offerings, and the prospect of actual bottom line profit in the current FY. They have multiple growth paths and with a cash hoard of $434m plus $4m cash contribution each month, I can't see any reason why they shouldn't capitalise on the opportunities in front of them.

Held (with gritted teeth) in RL

Came here to post this and there is another straw which includes a reference to the podcast. Could have deleted it, but you get it twice. Take it as two votes for the podcast

Bryce and Ren from Equity Mates podcast recently interviewed John Guscic from Webjet. It was a good interview, John comes across as a sensible, likeable guy. I wonder if the people that work for him think the same, I suspect so.

He has been with the business for a decade and before that spent his career in associated travel companies. One of the observations is he knows the business and the metrics – always good for the man at the steering wheel.

The business has obviously been slammed by the pandemic, but they have done an excellent job of managing costs. Indeed, they are likely to come out of this stronger as competitors are not fared as well. Some shutting forever, others the scale of their operations is significantly diminished.

Just a group of humble travel agents trying to take over the world. With the push to automation, and using tech wherever possible, I think the business is more than that. There is still demand for the human touch, but it is reducing.

Added a parcel in my RL portfolio.

https://equitymates.com/episode/ceo-series-john-guscic-steering-webjet-through-covid/

Webjet has unsurprisingly delivered some nasty results, reporting a 90% plunge in revenue for the first half due to ongoing travel restrictions.

Despite a 52% reduction on costs, this resulted in first half EBITDA dropping from $87m in H1 2020 to -$40m this half.

It's not all bad news though.

The domestic online travel agency business has returned to profitability and has also taken market share as other competitors have hit the wall. Average monthly booking here are now at about 40% of pre-covid levels, doubling between Oct and Dec 2020.

WebBeds and Online Republic are showing small improvements, but remain well below pre-covid levels (at 12% and 25%, respectively).

Fortunately, the business is very well capitalised, and is managing cash flows well. Webjet is reporting a monthly cash burn of $4.8m against $283m in cash at the bank. The group's bank waivers have been further extended through to March 2022.

Webjet has also been busy improving cost efficencies, something that they think will be 20% improved at scale. 

With vaccine rollouts now well underway the future is a little more certain. And it's encouraging to see lots of pent-up travel demand.

I think it will likely be at least until 2023 before the travel market is completely back to normal (barring any unexpected surprises). But at that time Webject will find itself a much leaner business with less competition. 

Shares are probably attractive for those with the patience to look beyond the current difficulties.

01-July-2020:  Another capital raising announced by WEB today:  WEBJET ANNOUNCES EURO 100 MILLION CONVERTIBLE NOTES OFFERING

And the SP went up +7.5% on the back of that.  FLT (Flight Centre) also announced today they were accepting assistance via a loan from the Bank of England under the UK's COVID-19 support arrangements for business, and FLT were also up today (+3.15%).  Further strengthening of company balance sheets is generally seen as a positive in this new environment.

21-Apr-2020:  Impact of Virgin Airways Administration

Webjet Limited (Webjet) notes the announcement today by Virgin Australia Holdings Limited (Virgin) that it has appointed a voluntary administrator.  Webjet has enjoyed a strong long-term relationship with Virgin and sees it occupying a vital position within the ongoing Australasian travel landscape.

Notwithstanding its relationship, Webjet does not have a material financial exposure to Virgin should an administrator restructure the airline or elect to cease trading.  Webjet books airfares on behalf of its customers as agent and is not the provider of the service. Webjet is working closely with its customers and on their behalf to process refunds/credits directly with all airlines who are no longer able to honour prepaid tickets, including Virgin.

While the travel industry will be impacted by Covid-19 for some time, Webjet considers that it will emerge with a strong competitive position given the diversity of geographic markets in which it operates, its diverse product offers and its capital position following the recent capital raise. 

01-Apr-2020:  Webjet (WEB) have released a number of announcements this afternoon with the main 3 being:

WEBJET ANNOUNCES A $275 MILLION EQUITY RAISING

Webjet Equity Raise Investor Presentation

Update - Dividend/Distribution - WEB

So, the dividend has been deferred for 6 months until October 15, they are raising $275m at $1.70/share, a LONG way below the $3.76 they last traded at before the trading halt and suspension, and a very long way below the $13.72 they closed at on Feb 19th (around 6 weeks ago).  

The headline details of the capital raising are that they are undertaking an institutional placement and an accelerated pro-rata, non-renounceable (1 for 1) entitlement offer to raise a minimum of $275 million via: 

• A fully underwritten institutional placement to raise $101 million, and
• A partially underwritten entitlement offer to raise a minimum of $174 million and a maximum of $231 million.

As correctly suggested by @AUROPAL (see Webjet forum), the delay appears to have centred around the underwriting of the retail component of the raising, which has ended up only being partially underwritten.  In other words, the first $101m (the institutional placement) is locked in, but whether they raise the full remaining $174m (of the $275m) is very much up to ordinary retail investors and how much more money they want to pour into WEB - at a price (of $1.70) that is 87.6% below their Feb high of $13.72.

Macquarie Bank (MQG) became substantial holders of WEB shares during the trading suspension, suggesting they were involved in organising this raising for WEB.  Macquarie also organised the "rescue raising" for RCR last year, also at a huge discount to their last traded price, and of course that didn't stop RCR from going into Administration shortly afterwards anyway - with investors that had hung in there until the end losing 100% of their money.  Not sure how much exposure Macquarie managed to retain through to when RCR management called in the Administrators (before their lenders did), but I would image MQG had managed to offload their shares before then.  It will be interesting to see what Macquarie do with their WEB shares now.  If they retain them, that's likely a positive.  If they quickly sell them after the capital raising has been completed, I would see that as a negative.  Because they are substantial holders, any sells of 1% or more must be reported via an announcement to WEB which the ASX will publish.

The 1:1 (1 for 1) entitlement offer means that current WEB shareholders (that were on the books before they went into the trading halt and suspension) will be entitled to buy one WEB share (at $1.70) for every one WEB share they already own.  Considering that WEB have announced that they are prepared to extend the retail component by an additional $57m from the proposed $174m up to a max of $231m - which seems a little optimistic to me - I would think it HIGHLY likely that existing shareholders will ALSO be given the opportunity to apply for additional shares (at the same $1.70 price) that would be from the pool of shares not taken up by other shareholders as part of the entitlement offer.

I guess the main questions shareholders need to ask are:

1. Will WEB survive from here?  I would think that if they can raise at least the minimum $174m from the retail component (the entitlement offer) of the raising, then they have a pretty good chance of surviving, but that will obviously depend of how soon global travel and tourism gets back to normal from here.
2. If they are going to survive, what is their intrinsic value now, and how much of a discount to that intrinsic value does this $1.70 price represent?

I don't hold any WEB shares, so I won't be spending too much time on those questions myself, but considering I did hold shares in RCR when something very similar happened to them, I would be thinking carefully about the answers to those questions if I did hold WEB shares.

20-Mar-2020:  WEB are still suspended from trading, pending the details of their capital raising, which Marcus Padley in his daily newsletter is calling a "rescue raising".  Today, we learn that UBS has now become owners of 5.78% of WEB (on Tues March 17) and it appears that the vast majority of their position is for the purposes of "Securities Lending Agreements", which usually means they're providing stock to shorters.  Appendices A, A1 & B have all of the details.  Apart from the Prime Brokerage Agreement with TIGA (Thorney Investment Group Australia), there are Securities Lending Agreements with 9 different entities.  And I would imagine that UBS weren't the only ones getting set to capitalise on such an opportunity - in terms of shorting stocks like WEB.  If the shorters are wrong, it could be a great buying opportunity, but so far they've been right.  You can read today's announcement here.

Webjet has delivered a very impressive result, and the market has reacted accordingly.

Revenue rose 33% to $175m and NPAT up 61% to over $38m. On a per share basis, profit was up 48%.

Total Transaction volumes grew 29% and the oprating margin was over 2% stronger.

Recent acquisitions certainly helped a lot, but even if you exclude these organic revenue growth was over 20%.

It was WebBeds (the groups B2B segment) that did the heavy lifting and is the world's second largest player in this space and accounts for over half of Webjets operating profit.

It is this area that holds the biggest potential for furthert growth. Indeed, the traditional Customer facing business saw a decline in profit, no doubt a further signal of domestic economic weakness. That's to be expected for a cyclical operation, and I don't read that as anything structural.

Personally, I find it difficult to wrap my head around the accounts -- there's a lot of moving parts and past acquisitions muddy the waters. But it's hard to argue with the top line performance.

Although I don't own, and havent recommended on Strawman, it's great to see the community rank this highly and am glad it's in the Strawman index.

You can find some great coverage over at Ethical Equities here

ASX announcement is here