Webjet profit jumps on the back of its hotel business
The company might be called Webjet, but for the first time, the online travel agency's room booking arm WebBeds has contributed more than half of the group's earnings before interest, tax, debt and amortisation.
The business, which Webjet launched in 2013, buys beds from hotels and resells them to other travel businesses, like tour providers.
Despite being a relatively new player, WebBeds is the second largest business-to-business provider of hotel beds in the world.
In its first half earnings, Webjet reported double-digit revenue and profit growth, with net profit after tax up 37 per cent to $25.2 million and revenue up 33 per cent to $175.3 million.
And despite the exceptionally hot European summer and uncertainty around Brexit affecting the company's sales partnership with British travel conglomerate Thomas Cook, Webjet issued a solid forecast for the rest of the year.
It confirmed its guidance, forecasting at least $120 million in earnings before interest, taxation, debt and amortisation, excluding one-off acquisition costs for the full financial year.
That puts the company roughly in line with analysts' consensus expectations of $124 million in earnings for the full year, according to Bloomberg.
And it also roughly aligns with the expectations of analysts at UBS, who forecast 19 per cent growth across the full financial year, with earnings at $77 million and EBITDA at $123 million.
Mr Guscic said the record heatwave that hit Europe last year hit the traditional market for travellers heading from normally-freezing northern Europe seeking sun in the south.
And the online travel boss said the "state of flux" around Brexit had also posed a challenge to the company, Mr Guscic said.
In 2016, Webjet struck a deal with Thomas Cook, one of the oldest travel agents in the world, which gave it access to 3,000 hotels across Europe.
Webjet's results come in a strong run for companies in the travel sector, with Corporate Travel Management's shares returning to heights not seen since it was attacked by short seller VGI Partners after the company released a strong set of first half earning figures.
The company announced a fully franked dividend of 8.5 cents a share payable on April 18, up from the 8 cents it paid in the previous corresponding half.