This article first appeared on GuruFocus .
Release Date: May 19, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Webjet Group Ltd ( ASX:WJL ) reported a group EBITDA of $28.1 million, showcasing resilience in a challenging macro environment.
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The company maintained a strong balance sheet with net cash of $93.9 million and no borrowings, providing flexibility for future investments.
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A fully franked dividend of $0.02 per share was announced, bringing the total for FY26 to $0.04 per share, exceeding 100% of underlying impact.
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Significant progress was made in strategic growth plans, including the relaunch of the WebJet OTA brand and expansion into business travel through the acquisition of Locomotive.
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The cars and motorhome segment saw a significant turnaround with EBITDA increasing to $4.3 million, following successful restructuring and efficiency initiatives.
Negative Points
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Virgin Australia, a key partner, will substantially reduce commission streams and commercial arrangements, impacting future revenue by approximately $3 million.
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The macro environment remains challenging with geopolitical tensions and cost of living pressures affecting consumer behavior.
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Total bookings were down for the year, with domestic bookings decreasing by 10% due to elevated fares and economic pressures.
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The company faced a $3.3 million impairment tied to discontinued TripNinja technology platforms and other write-offs.
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FY27 is expected to be challenging with lower airline commissions and changes in RBA surcharging regulations impacting financial performance.
Q & A Highlights
Q: Can you please share whether any of your prior FYCRG targets are still in place, like 3.2 billion TTV and margin improvement aspirations? What are the key assumptions and opinions also, and should we expect them to change with management changes? A: We are reviewing the timing of our FY30 target of doubling our TTV due to the current unprecedented global situation impacting the travel industry. The strategy and priorities remain unchanged, but execution may pivot. Management changes are part of the process, but the levers to drive value remain consistent.
Q: On revenue margins, what was the driver of your better revenue margin, and can you share any long-term aspirations for both EBITDA and revenue margins? A: Revenue this year benefited from large, lumpy contributions. Over the longer term, we expect revenue margin to normalize at around 8% to 9%. EBITDA margin will experience compression during the investment phase but should normalize at or above current levels in the longer term.
Q: How should we view changes in management and the board as it relates to the strategic direction of the company? Can we get an update on the CEO succession? A: The board is well-progressed in the CEO succession search, and an update will be provided in due course. Strategic levers to drive value remain unchanged, though execution may adapt with new management. The focus remains on leveraging the brand and driving growth.
Q: Regarding the Virgin announcement, should we assume the $3 million impact drops through to EBITDA, and how will this affect FY27? A: The $3 million impact is expected to drop through to the bottom line. Virgin remains a valued partner, and while there is a shift in economics, we will adjust and pivot our commercial strategy to mitigate the impact.
Q: Can you quantify the RBA surcharging impact and explain the lower variable revenue items this year? A: The RBA surcharges will present a headwind, particularly in the OTA business, from October 1. Two-thirds of Webjet OTA TTV is transacted through credit cards, but we will pursue mitigation strategies. Variable revenue items have ranged from under $1 million to $10 million over the past five years, with FY26 towards the upper end.
Q: Do you get the sense that your trading update for FY27 reflects how the broader market is tracking, specifically in leisure? A: The market is facing significant challenges, and while I can't comment on competitors, our figures suggest we are performing better than the market average.
Q: How material would it be if the government lifted travel advice to avoid the Middle East? A: It would be material for the industry, but as a majority domestic business, we are somewhat insulated. However, it would take more than one change to significantly alter consumer behavior, especially given the current booking horizons.
Q: How is your OTA brand relaunch performing, and have you managed to regain customers lost during the ACCC issue last year? A: The brand campaign has helped reactivate dormant customers and attract new ones, with new customer volumes hitting their highest in Q4. The brand relaunch has been successful in resetting consumer perception and driving customer acquisition.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
