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330% profit increase and Webjet is out shopping!
INE travel service Webjet says it will take advantage of a 330% profit increase and a debt-free balance sheet to seek “strategic opportunities” and increase its market presence over the next six to twelve months.
Unaudited figures issued yesterday showed that the value of Webjet’s transactions increased by 122%to $172.3 million for the year, as net profit before tax rose to between $3.2 million and $3.4 million, up from $700,000 last year, with operating cash flow $4.1 million.
Webjet managing director David Clarke said, it was “more likely than not” that internet travel services would follow the consolidation seen in the bricks-and-mortar travel agencies, driven principally by the travel firm S8.
Mr Clarke believed that Webjet, which was profitable and cash-flow-positive, with no debt and more than $23 million in unencumbered cash, was well placed to take up any opportunity that presented itself adding, “My guess is that, in response to the S8 initiatives, there will be another wave and within that environment, I think it is more likely than not that strategic opportunities will arise.”
He confirmed though that Webjet would not divert from its internet only business plan and model and would also not be rushed into acquiring something because it was available at a cheap price. He said, “We will not, for example, buy a wholesaler and we will not buy a retailer in the traditional sense, nor would we buy a call centre.”
Emphasising that there were no targets in mind, he said it would be logical for Webjet to have a keen interest in internet hotel bookings, but he stressed agin that they are not going to rush into it.”
Asked about the surge in net profit, Mr Clarke said it reflected a substantial move of travel bookings towards the internet, which was driven principally by domestic internet operations of Qantas, Jetstar and Virgin Blue, and was part of a global trend, with the trend extending to staightforward international routes including the trans-Tasman and point-to-point destinations like London and Los Angeles.
He added, “What is not yet happening to a major degree is very complex round-world itineraries and I think that’s the province of travel agents for the next 12 months or so, but after that, who knows?”
Report by The Mole
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