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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?"