What happened to Webjet’s share price?
At the time of writing, shares of Webjet Ltd [ASX:WEB] are up by 30.52%, to $14.84 per share.
Why did Webjet shares push higher?
Webjet announced a 42% jump in EBITDA (earnings before interest, tax, depreciation and amortisation) to $58.0 million for the first half of the Financial Year 2019. Revenue surged by 33% to $175.3 million, which supported the large EBITDA increase. Net profit after tax (NPAT) was up 61% to $38.3 million. The company also announced a fully franked interim dividend of 8.5 cents per share. And reconfirmed EBITDA guidance (excluding one-offs) of at least $120 million for FY2019.
What’s up next for Webjet?
The share price spiked on the news:
Webjet’s share price sold off heavily during the stock market correction last year. Since the market bottomed in mid-December, the share price has seen a slight bounce. That said, with the market uncertain about the future, the share price took off following the strong earnings announcement today.
Managing Director John Guscic told the market:
‘This was another outstanding result for our business. Our WebBeds business continues to consolidate its position as the #2 global B2B player and is now delivering significant EBITDA growth. Following the acquisitions of JacTravel and more recently Destinations of the World (DOTW), our increased global size and scale means we have been able to shift our focus from growing market share to pursuing more profitable growth.
‘As a result, we saw increased TTV and EBITDA margins in all regions. The Webjet OTA continues to gain share despite a slowing domestic flights market and our strategy to focus on profitable bookings in Online Republic saw improved TTV and EBITDA margins.’
Webjet is growing quicker than expected thanks to WebBeds ― a business that offers partners the choice of over 250,000 hotels across 10,000 destinations. With EBITDA growth booming, I believe there’s a good chance the share price could soon return to last year’s high of $17.73.
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