The performance of Webjet has been nothing short of spectacular. Over the past five years earnings per share have risen by exactly 4 times, or an average of 32% a year. Given the excellent cash flow characteristics of web businesses, the dividend has done even better, rising 45% a year. Despite this, the cash balance has swelled by $14m and there’s still been a spare $17.5m to buy back shares.
Webjet is certainly making money while the Sun shines, but winter will arrive at some point and the company doesn’t look like it has too many warm clothes to protect it.