Webjet Faces Market Softness and Regulatory Hurdles Despite Strong Cash Position
Webjet Group reports steady first-half results with a 16% rise in underlying profit and announces its inaugural fully franked interim dividend, signalling confidence despite a challenging travel market.
- Underlying NPAT up 16% to $7.8 million
- Revenue marginally down 1% to $67.9 million
- Inaugural fully franked interim dividend of 2.0 cents per share
- Strong Webjet OTA EBITDA margin maintained at 36.4%
- Cars & Motorhomes segment EBITDA grows 400% on cost savings
Resilient Performance in a Tough Market
Webjet Group Limited (ASX – WJL) has released its financial results for the six months ended 30 September 2025, delivering a performance that underscores the company’s resilience amid a challenging leisure travel environment. Despite a slight 1% dip in revenue to $67.9 million and an 8% decline in bookings, underlying net profit after tax (NPAT) rose by 16% to $7.8 million, reflecting strong cost discipline and strategic investments.
The company’s online travel agency (OTA) segment maintained a robust EBITDA margin of 36.4%, even as it navigated cost-of-living pressures and elevated domestic airfares. International bookings grew by 4%, partially offsetting a 10% drop in domestic bookings, illustrating a shift in consumer travel patterns.
Strategic Investments and Cost Management
Webjet’s FY30 Strategic Plan is progressing steadily, with investments focused on expanding international flight offerings, enhancing hotels and packages, scaling business travel, and refreshing the OTA brand. The company has also leveraged automation and AI-driven efficiencies, particularly in its Cars & Motorhomes segment, which saw a remarkable 400% increase in EBITDA despite a 4% revenue decline.
Operational excellence initiatives, including the development of an in-house customer service centre in Manila and AI-powered back-office improvements, have contributed to maintaining profitability during this investment phase. Expenses rose modestly by 2%, aligned with planned growth initiatives.
Capital Management and Dividend Policy
Signaling strong confidence in its financial position, Webjet declared its inaugural fully franked interim dividend of 2.0 cents per share, representing a 100% payout of underlying NPAT; well above its previous target payout ratio of 40-60%. This move aligns with the company’s strategy to maximise franking credits distribution to shareholders.
With a net cash position of $111.9 million and no borrowings, Webjet is well-positioned to support strategic growth while returning value to shareholders. The company has placed its previously proposed on-market buy-back on hold, reflecting a cautious approach amid ongoing market uncertainties.
Looking Ahead
Webjet forecasts underlying EBITDA for FY26 to range between $30 million and $32 million, representing a 6-14% decrease from FY25. This outlook factors in a softer market environment and excludes the expected impact of the Locomote acquisition. CEO Katrina Barry emphasised the company’s commitment to balancing prudent capital deployment with long-term growth ambitions, confident that the FY30 Strategic Plan provides a solid framework for value creation.
Bottom Line?
Webjet’s inaugural fully franked dividend and steady half-year results highlight resilience, but market softness and regulatory challenges warrant close watch.
Questions in the middle?
- How will the ACCC infringement notice impact Webjet’s brand and customer acquisition long term?
- What is the anticipated financial effect of the Locomote acquisition on Webjet’s future earnings?
- How quickly can Webjet’s FY30 Strategic Plan initiatives translate into sustained revenue growth?
