Wanderlust, dollar help Webjet earnings take off

THE online travel booking service Webjet has posted a 17 per cent rise in half-year profits as it benefits from Australians taking advantage of cheap fares and a strong dollar to travel overseas in record numbers.

THE online travel booking service Webjet has posted a 17 per cent rise in half-year profits as it benefits from Australians taking advantage of cheap fares and a strong dollar to travel overseas in record numbers.

Shares in Webjet surged 4 per cent to a 13-month high of $2.68 yesterday after the Melbourne company reported an after-tax profit of $5.9 million for the six months to the end of December, compared with $5 million a year earlier. Revenue rose 35 per cent to $29 million for the first half.

Webjet's managing director, John Guscic, said international air fares continued to fall, making it cheaper for more people to travel overseas to a broad ranges of destinations.

Mr Guscic said Webjet was noticing a growing trend of people travelling on short-haul trips to Asia rather than flying to long-haul destinations.

"We are seeing a strong push to short-haul Asian destinations. We are growing all international destinations but with a skew towards Asia," he told investors yesterday.

Figures from the Bureau of Statistics released this week show the number of Australians travelling abroad last year rose to 7.8 million.

The online travel company said the main drivers of the lift in earnings were a 29 per cent increase in total transaction value - the price at which travel products and services were sold - to $369 million and a boost in margins, which rose to 7.9 per cent for the half, from 7.6 per cent.

Webjet also said bookings over iPhones had increased eight-fold in the half, demonstrating the need for the company to stay relevant to consumers as technology changed.

"We are seeing people who are coming to us through a plethora of devices," Mr Guscic said.

Webjet stuck to earlier guidance of at least a 10 per cent rise in profits for the full year. Last financial year it posted a net profit of $11 million.

It will pay a fully franked interim dividend of 6? a share on April 12.

The strong earnings from Webjet bodes well for other travel-related stocks such as Flight Centre, whose shares rose 18? to $19.93 yesterday. However, Wotif.com fell 1? to $4.02.

AT A GLANCE

First half 2012 2011

Revenue $29m $22m

Net profit $6m $5m

EPS 8.16? 6.63?

Dividend 6? 5.5?

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