WEB - Webjet

Feel i need to point this one out.

Been watching ever since October 2004 when she started to stir. Rode the Boom last year, peaked around $0.21, corrected along with the market back to $.10, and has now gathered all it's previous momentum to be touching $0.25 as we speak.

Each month an announcement comes out detailing 300%++ plus increase in revenue since the corresponding month last FY.

This is one tech stock that is going somewhere.

Not a holder yet, not sure why either, guess I am looking for a good weak spot to jump in..... but lo-and-behold... she just keeps on rising!!

Enjoy,

Moonshine

After a slight correction, WebJet is looking to close 15% higher today at an all time high of $0.30

The favourable sales reports keep coming in... July recorded another 350% increase in revenue from the corresponding period last year. Up from $3.4 million in July 04 to $10.9 million in July 05, and... July 05 was up 17% on June 05!

Can anyone point out any reasons NOT to get involved in this share??

Cheers,

Moonshine

Ok... this is getting out of hand.

One director is continually selling, meanwhine the SP is looking to close at another record high of 33c now! up another 3c today.

chart is HEALTHY.

Cheers,

Moonshine

As far as I can tell (I'm a new memeber & have not yet mastered the seaches) WEB last came into focus 22/7/05.

Worth a re-look. Finances are much much better and there is a rumor of a 5 cent capital return (may not be wise IMO).

cheers


WASL

Must admit I have some of these as a speculative bet, the financials look pretty damn good to me, each announcement they announce record transactions, profits up, great cashflow.

They have first mover advantage in a market which will get significant growth and apparently very low costs. Watch this space I'd suggest, both fundamentally and on a TA perspective I think this one has some legs.

PE ratio for WEB looks better than Wotif. Only other contender is Flight centre but its a physical business rather than web based and therefore not realy comparable.

I admit to buying some today at $0.31.

Good luck & fasten your seatbelts.

ps check out the latest report from IRC (28-7-06). interesting & so thought the market today. Up 50% - nearly enough to get an ASX query.

WASL

As far as the capital return, well it depends on what else they have planned. Currently they are a bit of a cash-cow and do need to do something with this money, the only question is what.

They really only have two choices, invest in the business (probably by an acquisition as the current business is running very well without injecting cost) or by returning the money.

While I'm not in the business myself it's certainly not obvious as to any other opportunities for them to buy but there may be overseas. To be beneficial to the company would want to be fairly cheap and have similarly low costs.

We'll see no doubt.

Here is some comment from the Australian

Quote:

---

quote:High-flyer Webjet ready to buy
Steve Creedy, Aviation writer
July 25, 2006
ONLINE travel service Webjet expects to build on a 330 per cent profit increase and a debt-free balance sheet to take advantage of "strategic opportunities" and increase its market presence over the next six to 12 months.
Unaudited figures issued yesterday showed that the value of Webjet's transactions increased by 122 per cent 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. Operating cash flow was $4.1 million.

Webjet managing director David Clarke said he believed 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.

"My guess is that, in response to the S8 initiatives, there will be another wave," he said.

"Within that environment, I think it is more likely than not that strategic opportunities will arise."

Webjet would not divert from its internet-only business plan.

It would also not be rushed into acquiring something because it was available at a cheap price.

"We will not, for example, buy a wholesaler," he said. "We will not buy a retailer in the traditional sense. We would not 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 we're not going to rush into it," he said.

Asked about the surge in net profit, Mr Clarke said it reflected a substantial move of travel bookings towards the internet.

This was driven principally by the internet operations of domestic carriers, such as Qantas, Jetstar and Virgin Blue, and was part of a global trend.

The trend was not only evident within domestic travel, but simple international routes as well, such as the trans-Tasman and point-to-point destinations like London and Los Angeles.

"What is not yet happening to a major degree is very complex round-world itineraries," Mr Clarke said.

"I think that's the province of travel agents in the next 12 months or so. After that, who knows?"

---

The fact that airlines are cutting commissions of course means that companies charges fees.

I'd suspect if you look around there are plenty examples of people paying more to get a better service.

Webjet provides the ability to see multiple airlines one one page and choose from this. Sure there are many people who will spend hours surfing the net looking at multiple web site to find the nest deal (I'm one of them). But there are also people who will say my time is valuable and for the sake of the fee (what is it $14) will want this added service.

With removal of commission I think you will find all Travel Agents moving to a fee based model, the question then is will people still want the added services Travel Agents provide.

I think that there will still be plenty who do. The question then is whther the online service providers or physical presences are better. I for one think that Travel Agents have for a long time provided an abysmall level of service, they are only open the times I cant get to see them and during the one time I can (lunchtime) there are huge queues.

Web based travel consolidators provide a one-stop shop that provides similar levels of service (yes there will always be people who want face to face) to Travel Agents but are available when you want it.

As to who would use these, I recently tried to help my sister find flights/accom/car rental for trip to Sunshine and Gold Coasts, provided all sorts of Web addreses. Her reply, "can't you just provide one site where I can find this all, I'd rather have this". And she was happy to pay a bit more.

I'd suggest Webjet's figures show this type of user is actually more common than the educated web users like us. In fact there is plenty of research which confirms this theory that most people like the web but really prefer consolidated sites than having to search.

While I don't profess to understand why I believe that most customers are complacent customers, I can give so many examples where customers are prepared to pay more than is necessary for services, probably because they regard this as a service. In at least some of the examples people are paying way more than a $14 premium for goods at least as common as air tickets.

I certainly can't explain why but this doesn't mean they don't exist, they do an in virtually every product. Someone once said to me that "common sense is not that common" and it's so true.

I think assuming that people will act rationally (which for most of us means "like me") is a very dangerous prejudice IMO and we should actually be very careful about relying on this as an investment approach.

In relation to WEB (or any other company for that matter) this means we should judge what is happening rather than what we think should be happening. For WEB the volumes are increasing rapidly regardless of whether I personally would buy through them.

Quote:

---

quote:Originally posted by major


It's common knowledge and good business practice that any internet business should be able to offer products cheaper than a bricks and mortar type business, yet in Webjet we have an internet business that is charging at least 10-15% more than the bricks and mortar airline businesses that Webjet sources all their product through???

---

Based on your 10-15% figure I think you must be assuming Webjet's business is mainly domestic but I have a hunch where they are getting business is international where %'s are much lower (i.e. it's stil $14 on maybe a $2000 flight) and there are more potential options for airlines and maybe users are less aware where to look for all the airlines websites. Wheras for domestic you just need to know 3.

Also think the mix and match option they have for NZ (fly out one airline and fly back with another) will be expanded shortly and would be attractive to many. No single airlin eoption offers this.

Webjet keep on announcing record weeks and days of transactions, seems like someone likes their service!.

Acording to the presentation on boardroom radio most business is repeat businss or word of mouth.

Hi Stevieb,
I agree with you that it has public appeal - despite some on this site who poo-pah it. Following announcement was made to market/brokers yesterday (30/8). I have been accumulating for a month and am ahead (a bit!)

"Webjet today announced a major milestone of over $1million total transaction value for yesterday 29 August.

Commenting, Webjet Managing Director, David Clarke, said:

“We are really excited by this extraordinary milestone in our company’s history. It is the equivalent of over seven jumbos of passengers in one day. Only two years ago this would have represented a very good week’s turnover!

On top of the recent Hitwise data which has indicated that Webjet has, for the last three weeks, taken number one internet travel agency position in Australia, we are greatly encouraged by the clear success of our service, technology and product offering driven by our new marketing campaign with the National 7 Network.

It is, of course, early days into the new financial year and no forecasts are made at this time.”

David Clarke
Managing Director
Webjet Limited"

Good luck as always

WASL

Thanks. I'm one of those who think you should watch what people do rather than analyse what you think they should do.

The concept that people act rationally in all circumstances is grosslly overrated and has been proven to be incorrect in a number of circumstances.

In this case, the evidence (via total transaction value) points strongly to the fact that people do like this site and transaction value is ever increasing, and quite strongly so.

It's all about the convenience of going to one place and performing your transactions. I don't think $20 is too much to ask for that service. Some people get hung up on ticket price and forget that you probably blow that much travelling in a taxi to the airport or booking a more expensive room in a hotel at the other end. Also, they offer the ability to book split flights across multiple airlines if you want to. And if everyone wanted the cheapest flight, why would the airlines have multiple and more expensive types of fares? The also offer hotels, cars, and more recently insurance. I don't subscribe to the philosophy that all web businesses should be able to charge less than bricks-and-mortar, at least not in the short term. I can only see good things coming from this company, with no debt and so less risk in a downturn or an increase in interest rates.

Yes, I agree. Now we just need to wait for something to send the share price up. Seems stuck in that 33-34c range, though it does look rather like sellers are now weak on the ground so maybe get a kickup tomorrow if the market is stronger. We'll see.

Well last two days has taken us well out of the 33-34c range and as high as 42c today on about 30 times normal volume.

Question is, is something up or are these just people reallocating funds from FlightCentre now it is to be privatised?

Been a while since anyone posted on this thread, but I thought I would restart it up.

Since the last posting in late 2006, WEB has crabbed sideways with its PE starting to catch up with it. The last 2 years it has formed an uptrend going from around 90 cents to 2.30 today...it has posted average earnings increase YoY since it was profitable in 2005, averaging around 50% since 2006 (exclude first year profitability increase as it skews things a bit).

Heres a few pictures to put in perspective.

http://farm5.static.flickr.com/4148/...169aab78_z.jpg

WEBJET has historically grown its key measures well. A small dip in Operating CF during the GFC shows its not completely immune to the downturns.

http://farm5.static.flickr.com/4104/...10096d9c_b.jpg

Shows the current uptrend. You need to give it a little breathing space given its liquidity.

http://farm5.static.flickr.com/4084/...8a3bdb3f_b.jpg

Weekly chart...crabbed in a trading range for 4 years while the fundamentals gets better?

http://farm5.static.flickr.com/4149/...fa537b23_z.jpg

Here is a comparison vs WTF on some key performance indicators 2006-2010 (most applicable given when WEB entered profitability). Although WEB is above WTF on most of these...it still is in my mind a more risky stock given its lack of diversification. Growth rate is YoY.

Sitting on PE of around 16.5 currently with a market cap of 180 million. These sort of stocks can easily blow out on hype and trade on ridiculous P/Es. I look to sell at anything above 25-30. Even then, you have to take into account earnings guidance as sitting on a historical PE of 25 could be a forward PE of 15.

Any comments surrounding WEB? Surely there must be someone with some knowledge.

Quote:

---

Originally Posted by upside_umop

Any comments surrounding WEB? Surely there must be someone with some knowledge.

---

If you go to www.theaustralian.com.au there is an article by city beat speculating Fairfax may try and take them over.it is in the business section.

Cheers Percy. Interesting...

Quote:

---

Online travel firm Webjet tipped to be on the Fairfax radar
Michael Bennet From: The Australian September 18, 2010

FAIRFAX Media has hinted it's on the lookout for acquisitions, according to analysts who tip a possible bid for online travel company Webjet.
They say Weject will complement its existing web-based assets.

Analysts at Citi told clients yesterday that Fairfax management had expressed a renewed interest in potential acquisitions at a recent presentation to its sales traders, with online transaction-based businesses high on the list.

Fairfax, which was set to release a much anticipated review of its business next month, wanted to leverage the brands and existing traffic from websites of mastheads The Age and The Sydney Morning Herald to new businesses, Citi said.

"Webjet meets all the requirements outlined by management in our view . . . with scope to leverage its accommodation site Stayz.com.au and the web traffic through the main websites," analyst Justin Diddams said. Fairfax owns a plethora of online businesses through its digital arm, including MyCareer, RSVP and Domain, and the paid-for website of The Australian Financial Review.

Mr Diddams said any additions to its stable would probably be restricted to small to mid-size players due to the company's credit constraints.

With a market value of about $189 million, Webjet fits this requirement.

For full-year 2011, Webjet has forecast a 15 per cent rise in net profit after tax from to $12.1m, on earnings before interest, tax, depreciation and amortisation of $15.7m.

Citi said suitors would have to pay 20 times earnings for online assets with structural growth. The bank also noted that 16 per cent of Webjet was held by its management and board.

Webjet closed 3.8 per cent higher at $2.45.

At that price, Mr Diddams said, the acquisition would be earnings neutral for Fairfax in year one and marginally profitable in year two

---

I took a position a few months ago around the $2 mark.

Webjet has some terrific fundamentals. 9 years of consecutive EPS growth, didn't even take a backward step during the GFC. During that period, they've also outperformed the rest of the travel industry every single year. Terrific returns for investors.

In this crowded web travel industry, Webjet has continued to outperform in Australia and NZ. In my opinion, it's not the technology or even product that gives Webjet an edge - it's the brand. In Australia anyway, Webjet is known as THE flight search engine. I think much of the population will find it difficult to name another.

If Fairfax wants to take a stab, I'm happy for them. Though it would be alot more value to a company like Flight Centre.

They caught my eye when I was reading through a investment magazine - that was a couple of months old. They were tipping it at 1.70ish with PE around 13 times. I had remembered looking at it before but it was priced too expensive....but earnings had since caught up. Then when I looked, they were 2.10ish...and bought shortly afterwards before they got away too much more.

I find it interesting management are predicting only 15% growth. That would be the lowest growth since profitability occurred in 05. I'm not sure where they are getting 15% from, as only recently they weren't providing guidance. FLT was providing guidance of 15% growth if I remember rightly.

There is plenty of scope to grow this business...but like anything, it could get too expensive. Priced on a forward PE of 20 would imply a price of around $3.15. I don't think a PE of 20 would get it though....and could easily blow out to PE of 25, circa $4 on some substantial takeover rumours. Not huge upside, but relatively safe..

upside...you need to clear your inbox. I tried to send you a message this morning with a heads up on a stock you might be interested in for a BESBS play

Heah Corp, I am happy to listen

Quote:

---

Originally Posted by Anna Naum

Heah Corp, I am happy to listen

---

Me Too.In fact I am holding myself at the ready.!!

Quote:

---

Originally Posted by Corporate

upside...you need to clear your inbox. I tried to send you a message this morning with a heads up on a stock you might be interested in for a BESBS play

---

Hey mate, yeah it was full around a week ago but cleared a few to make space...? Try now, I've cleared the lot.

Quote:

---

Originally Posted by upside_umop

Hey mate, yeah it was full around a week ago but cleared a few to make space...? Try now, I've cleared the lot.

---

Sweet I've sent you a PM. I haven't done nearly enough research yet.

Anna / Percy I'll let you know once I've had a chance to do a bit more research.

Cheers,

C

Criterion , has done another article in the australian this morning www.theaustralian.com.au/business.

Interesting Percy, cheers.

Considering this is virtually straight to the bottom line (average same size transaction and very marginal increase in costs for sales) and combined with the lag effect of the strong AUD, then it would seem they will get the 15% target growth EPS for the year. Markets always like upgrades, although its P.E. is quite rich on the historical side.

What do you think their chances are with the US?

Quote:

---

Originally Posted by upside_umop

Interesting Percy, cheers.

Considering this is virtually straight to the bottom line (average same size transaction and very marginal increase in costs for sales) and combined with the lag effect of the strong AUD, then it would seem they will get the 15% target growth EPS for the year. Markets always like upgrades, although its P.E. is quite rich on the historical side.

What do you think their chances are with the US?

---

Upside.
I unfortunately do not own WEB.Only wish I did.I did do well out of WTF,but noted comments on the WTF thread that they were facing a lot of competition.so sold.I think WEB is a better share to hold.I noted your interest in WEB so posted reference to articles incase you did not see them,so I cannot make a comment on their chances in US.

WEB took a little bit of a dive recently with managements uncertain outlook - I think they are just being cautious. Profits should exceed forecasts when you read between the lines.

From my eyes, it looks like WEB has double bottomed and now strongly broken resistance of 2.30.

You have to give this stock a little bit of breathing space given it's lack of liquidity can make for some wild moves....trend channels have worked for me - but I was getting close to selling I must admit.

Tracking up nicely again after taking a hit from a cautious forecast by the company.

The forecast results to 6 months 31/12/2010 said:

Quote:

---

Webjet’s results to the end of October indicate a profit increase (before tax) of approximately 15% compared with last year and a TTV increase of approximately 20%

---

The actual results to 6 months for 31/12/2010 said:

Quote:

---

Webjet today announced Total Transaction Values for the six months ended December 31st of approximately 285 million, compared to 248 million for the previous year, an increase of approximately 15%.
During the same period transaction fees increased by approximately 25%, which is reflective of the fact that the unit value of air fares in the latest six month period as a product of intense airline sales initiatives, and intense bargain hunting by consumers, have decreased relative to last year.
This means that our transaction volumes have increased at a rate we estimate of more than double the growth rate in the leisure market.

---

Therefore, if all else is constant...you would expect net profit to increase by more than the cautious forecast of 15% as fees collected were up 25%. However there were some small one off costs for expansion into America, Europe etc ($250k, so negligible). I'll be looking at these segmented operating numbers with interest, as if they were to break this market, it would be huge.

*TTV up 29%
*Operating revenue up 38%
*Net profit up 17%
*Interim dividend up 20%
*EPS up 23%

http://www.stocknessmonster.com/news...E=ASX&N=368895

A pretty good half for WEB.

whats with the recent drop. it seems to me as cyclical but is there something else involved. Feel like buying into the dip

Does anyone know why this got so smashed today. Is there any reason for it or is this just a good buying opportunity

tosspot maybe more people have woken up to the fact that if you find the cheap fares on Webjet you can then go direct to the Airline & get the same fare but less fees than booking through Webjet. I assume it is still this way as it is some years since I was chasing Air Fares. We used to only use WebJet as a fare comparison site & book & pay direct.

KW things change all the time. You have to check all the details every time as Tiger airways had different conditions for tickets issued via WebJet compared with tickets they issued themselves.

All quiet here..... Managing Director buys $700k of shares in a month ..... down to 11.70 from 17.20. Seems to be turning up . Maybe the shorters buying back ?
One company has a buy rating ...

Thought I'd revive another thread that has gone by the wayside. Have posted about it on the Serko thread on occasion. Last one below from late last year.

Quote:

---

Originally Posted by Muse

good old webjet...one of my fav pandemic investments. had been a long term admirer but never pulled the trigger. In very early days of the pandemic lots of the obviously effected companies started doing these heavily discounted rights issues so bought my first block of webjet shares at a bargain price and then got the opportunity to subscribe for new shares at i think A1.70 (now 6.20), which was massively discounted, and on a 2 for 1 basis. bit fuzzy now but think I managed to pick up some over subscriptions. a lot of kiwi IP in that company and chaired by a fine kiwi too.

---

Web now at $7.47.

I can't get my head around Serko's valuation but I can on webjet's. Web operates with a 31 March financial year so its FY24 is substantially complete, with a PE of 31.5x. But on the next 12 months (soon to be new current financial year) that shrinks to 21.9x, based on consensus. The half year result was good and beat consensus by about $10m EBITDA.

Latest preso and announcements.
https://cdn-api.markitdigital.com/ap...43090-3A631322
https://cdn-api.markitdigital.com/ap...43089-3A631321

People will be mostly familiar with its advertising for its flight booking service on webjet.com.au / webjet.co.nz

But the core and value of the group is its WebBeds business, which is now a global B2B business, which is arguably a more attractive and valuable segment to play in than mass market consumer. It is now a top 3 player internationally, behind Expedia and Hotelbeds.

Obviously macro themes going on but I think WEB has carved out in a niche and is capturing marketshare in a good area and that'll provide it with strong secular growth regardless of the macro cycle - the question is how will the growth compare to near term mkt expectations. Transaction values and earnings are now above pre covid levels.

WEB now has A$634m in gross cash ($144m inflow in 1H24). Ironically one of the overhangs on the business' near term SP is it's capital structure. In 2021 the business issued bonds worth $250m at face value, pays a 0.75% coupon, and aren't due to mature until April 2026. Sounds great cheap funding! Sadly the bond investors have a put option able to be exercised starting this April where they can convert to equity at $6.25 a share (back at the time this was quite the premium). So that could prove dilutionary and a bit of an overhang. Web actively trying to buyback that debt as it has heaps of cash but the bonds but the the bonds are valuable from an option value perspective.

anyway I never spend much time here on my ASX shares so thought I'd share a few notes. No advice and just my musings and disclose I am a shareholder.

I also love WEB. Bought in but didnt really understand until recently that WEB beds is most of the rev.
Long term winner here with great margins.

Thanks for the info on the bonds, didnt know that.

aye - regarding the bonds - the best way to look at its PE multiple is to do it on a fully diluted basis by assuming 100% of the bonds convert to equity... IE the $ face value of bonds divided by ~$6.25 per share equals the new number of ordinary shares that will most likely be issued. add that to the existing number of shares to get total "in the money" diluted shares, multiply that by the spot price to get a fully dilluted mcap, and divide by consensus NPAT. have that down somewhere will post later.

edit - the fully diluted mcap maybe relevant for EV/EBITDA multiples but need to have a look and think about fully diluted PE multiples. either way, a big whack of shares will be available to be issued from april this yr.

hmmm, might be some selling pressure off the back of this.

WebBeds investor presentation - broken through A$8/share and up 5.5% today.
https://cdn-api.markitdigital.com/ap...87223-3A639166

WEB going gang busters today. Love to see it