In major news on Australian stocks, Webjet Limited (AU:WEB) shares rallied to a four-year high after the company announced record profits for FY24. The company reported a huge improvement in all its group metrics, significantly surpassing both FY23 and pre-pandemic figures. For Fiscal 2024, the company reported a 40% growth in its underlying EBITDA of AU$188 million compared to FY23.
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Additionally, the company announced its ongoing consideration of splitting its primary divisions, WebBeds and Webjet B2C, through a demerger. If completed, this demerger would create two separate ASX-listed entities, each occupying leading roles within their specific sectors. After the announcement, Webjet shares rose 7.7% today, resulting in a year-to-date increase of 23%.
Webjet is a global travel company, serving both wholesale (B2B) and retail (B2C) markets.
Webjet’s Record Performance in FY24
For FY24, Webjet reported a record underlying net profit after tax of AU$128.4 million, a significant increase from $69.9 million in FY23, largely attributed to the growth of its wholesale business.
Among its segments, the company’s B2B platform, WebBeds, achieved a standout performance. WebBeds bookings increased by 26%, TTV (total transaction value) grew 42% to AU$4 billion, and EBITDA surged by 39%, all reaching record highs compared to the previous fiscal year.
Moving forward, Webjet is targeting AU$10 billion in TTV by FY30 for WebBeds, while maintaining the EBITDA margin of approximately 50%.
Meanwhile, the company’s B2C division, Webjet OTA, continues to expand its market share, which has increased by 46% since the pandemic. Webjet OTA recorded a 25% year-over-year growth in its EBITDA of AU$54.2 million.
Is Webjet a Buy or Sell?
After the results, analysts at UBS and Citi confirmed their Buy ratings on Webjet stock, predicting an upside potential of 10% and 9%, respectively.
As per the consensus among analysts on TipRanks, WEB stock has been assigned a Strong Buy rating, based on eight Buy and two Hold recommendations. The Webjet share price target is AU$9.44, which is 4% above the current level.
