FY22 Results: Return to Profit.

FY22 saw the business turn around, delivering a profitable 2H22 driven by WebBeds and Webjet OTA. As revenues start to return, costs are materially lower than they were pre-pandemic, reflecting the significant efficiencies coming through, particularly in the WebBeds business. 

• Group profitable in 2H22; delivering positive cash flow - FY22 $4million/month average cash surplus.
• WebBeds profitable in 2H22 driven by North American and European markets. Costs down 31% compared to pre-pandemic levels and on track to be 20% more cost efficient when back at scale.
• Webjet OTA profitable for FY22 notwithstanding border closures in 1H22 and Omicron impact in 2H22.
• GoSee rebrand underway to deliver greater efficiencies, enhance customer experience and improve underlying performance.
• Investing in innovative technology to differentiate our offering and build out our core capabilities. Locktrip in FY21, Trip Ninja in 1H22 and ROOMDEX in 2H22
• Strong start to FY23 with all businesses profitable in April with indications of a further strong uplift in May. As at May 2022, WebBeds Total Transaction Value (TTV) was ahead of May 2019, Webjet OTA bookings are tracking at c.80% of pre-pandemic levels and GoSee TTV is tracking at c.75% of pre-pandemic levels.
• Significant growth opportunities in all businesses as global travel markets reopen.

You can find all related documents on the ASX Releases page of our Investor Centre website, with some key documents and commentary below.

Key metrics

TTV and Revenue were up materially compared to the 12 months to 31 March 2021 (up 262% and 466% respectively) while Expenses were only up 7%. FY22 Underlying EBITDA loss of $15 million reflected a $103 million improvement compared to the 12 months to 31 March 2021.

WebBeds was profitable for 2H22 driven by the North American and European markets. Webjet OTA was profitable for the whole year despite extensive lockdowns and border closures in 1H22, and the impact of the Omicron outbreak in 2H22. GoSee (formerly Online Republic) continued to be impacted by State and International border closures for most of the year.

Commenting on the result, Webjet Limited’s Managing Director John Guscic said:

“FY22 was a year of recovery. We are now cash flow positive, our two largest businesses returned to profitability and we are seeing markets rebound strongly as travel restrictions continue to ease. WebBeds returned to profitability in the second half. Our investment in North America is paying off with booking volumes for that business now already more than double what they were pre-pandemic, and all the work undertaken to drive efficiencies saw costs remain significantly below pre-pandemic levels. Webjet OTA was profitable for the full year despite widespread lockdowns, border closures and the impact of Omicron from December. Domestic bookings spiked as borders opened, reflecting Webjet OTA’s strength in servicing the domestic leisure market, however international bookings have been subdued with airline capacity still well below pre-pandemic levels. Profitability for GoSee is highly linked to Australian and New Zealand international border openings and that business continued to be impacted by border closures for the majority of FY22, although we saw Cars TTV exceed pre-pandemic levels in March driven by domestic markets.

The year has also been one of incredible and unprecedented industry challenges consequent upon the chaotic changes in travel plans and restrictions which have put all travel industry service levels under enormous stress. We acknowledge the special cooperation of our global industry partners as we endeavour to minimise disruption. And we are particularly thankful for the flexibility and understanding of all our customers as Webjet continues to add extra resources and processes to cater for markets that are now rebounding strongly.”

Group Performance.

The Group’s Statutory Result includes $18.2 million non-operating expenses, of which $14 million relate to the write-off of the Online Republic brand, and $8.8 million for ERP implementation costs, which are critical to driving further efficiencies in the WebBeds business.

Group FY22 results show the 12 months to 31 March 2022 while FY21 results show the 9 months to 31 March 2021 (reflecting the move to the new March year end in that period). It is therefore not useful to provide a comparative discussion of overall Group performance between the two periods.

Capital Position.

• Working capital continues to improve: cash surplus of $4 million per month (FY21: $5.5 million per month average cash burn)
• Cash position remains strong: $434 million cash as at 31 March 2022.
• Payment of deferred FY20 interim dividend and investments in Locktrip, Trip Ninja and ROOMDEX were made during the year.

Outlook.

Webjet Limited is intent on capitalising on travel recovery and we see significant growth potential in all our businesses as travel markets reopen.

Commenting on the outlook, Manging Director John Guscic said:

“The demand for travel after two years of massive restrictions as the world grappled with the global pandemic is showing the resilience, flexibility and the essential nature of travel in everyone’s lives. The quest for exploration, the desire for adventure, and the longing to see friends and families has never been higher.

In addition to the strong signs of demand we see demonstrated through our daily customer search activity, we are also seeing demonstrable indicators of confidence in the recovery from our supply partners as they invest in capacity for the future. For example, Qantas, Virgin and Rex have all placed orders for new aircraft, and Bonza has announced its launch into the Australian domestic market. We are also seeing major hotel and resort rebound with over US$68 billion in global hotel investment in CY2021, and an anticipated 2,805 hotels with 428,037 new rooms to open in 2022. We continue to observe the

progressive restoration of travel patterns as domestic and international borders open.

Trading continues to improve on the back of increased demand and opening borders. First quarter trading for the Group is currently tracking well ahead of 4Q22 at Bookings, TTV, Revenue and EBITDA levels. April was our most profitable month since the pandemic began with all of our businesses delivering profits. May’s profitability is expected to significantly exceed that of April.

WebBeds TTV volumes for May 2022 are tracking above pre-pandemic period. Fourteen of the Top 25 markets are now trading at or above pre-pandemic booking volumes, although some markets continue to have meaningful restrictions, particularly in Asia Pacific. Our focus on driving efficiencies means that as at May, WebBeds is back at pre-pandemic booking volumes and costs are more than 20% lower than pre-pandemic levels, despite global wage pressures.

We have seen strong bookings momentum for Webjet OTA as Omicron settles and international tourism recommences with total Bookings for May tracking at c.80% of pre-pandemic levels. Webjet continues to extend its lead as the #1 Online Travel Agent in AU/NZ and we are excited by the growth opportunities we see in international flights and in particular by what Trip Ninja technology will allow us to offer in that space.

The reopening of international borders has also seen GoSee TTV increase, with May TTV tracking at c.75% of pre-pandemic levels. We are intent on transforming GoSee by bringing a more focused, growth-oriented strategy.

During the year we took advantage of attractive market conditions to acquire 100% of Trip Ninja and 49% of ROOMDEX. We believe strategic investments in complementary adjacent businesses that help build out our core capabilities will be an important part of our strategy going forward. Not only will they increase user satisfaction, these solutions will drive additional relevancy with our customers and partners.

Based on current bookings trajectory the Group remains on track of be back at pre-pandemic bookings volumes by 2H23 – October 2022 to March 2023. We believe there are significant growth opportunities in all our businesses and are excited for what the future holds.”

Commenting on dividends, Chair Roger Sharp said:

“While Webjet Limited has significant cash reserves, we continue to watch cash, cash flow and debtor risk very closely. We are starting to see strong cash inflows as major travel markets open again, and the Company is back to being cash flow positive. We paid the deferred FY20 interim dividend during the year however given the inherent uncertainty that still remains, we have not declared a dividend for FY22.”

The Company is not providing any FY23 earnings guidance. As markets continue to recover, pre-pandemic seasonal earnings patterns for WebBeds, Webjet OTA and GoSee are expected to return. The Company’s AGM is scheduled to be held on 31 August 2022.

Ends.

This announcement has been approved for release to the ASX by the Board of Directors.

For further information.

Investors.
Please contact Carolyn Mole at investor@webjetlimited.com 

Media.
Please contact the History Will Be Kind team at media@webjetlimited.com or call on (+61) 02 8046 4848