Online travel company WEB fell 5.6% on Thursday after it delivered a weaker-than-expected trading update at its AGM. The majority of the information offered at the AGM was already known to investors from its results published in May of this year. However, the devil is in the details, as they say, and in the case of WEB, it was how FY25 is tracking thus far:
- The total transaction value (TTV) under WebBeds increased by more than 25%’as of 25 August 2024.
- However, WebBeds TTV in FY24 was 42% higher, indicating a slowdown in the value of processed bookings.
- Bookings and TTV are down 5% and 10% respectively year-to-date. This compares to a 5% and 6% increase in bookings and TTV in FY24.
WebBeds (which is their B2B brand) continues to grow strongly, with the travel wholesaler on track to hit $5 billion of TTV in FY25. Likewise, bookings through the WebBeds segment are mostly in line with the prior financial year at “more than 20%.” The WebBeds division is generating the same margin as last year, and Webjet (which is their B2C brand) is seeing stronger margins than last year.
- This was a disappointing update, but the stock is looking more appealing after yesterday’s sell-off, and a potential demerger will likely add value for shareholders.