Web Travel Group Ltd (ASX: WEB) is a leading global travel distribution company, specialising in B2B services through its digital marketplace, WebBeds. With a strong presence across Asia-Pacific, the Americas, Europe, and the Middle East, the company connects hotels and travel suppliers with a vast network of travel buyers, facilitating seamless transactions and optimised inventory management.
WebBeds operates as an intermediary, sourcing inventory from hotels and distributing it to travel agencies, tour operators, and other travel providers. The platform offers agile and scalable hotel distribution, ensuring suppliers can efficiently manage inventory and pricing across multiple channels.
WebBeds supports simple connectivity solutions, allowing travel buyers to access a wide range of accommodations through API integration or trade-only booking sites. With a global footprint, WebBeds has over 2,000 employees in 120+ cities across 50+ countries, ensuring localised expertise and support.
Financial Performance
The financial year 2025 marked significant changes for Web Travel Group Ltd, primarily driven by the demerger of its B2C businesses into a new entity, Webjet Group Ltd.
The company’s total revenue from ordinary activities increased by 3% to $328.4 million, while the net profit attributable to members surged by 196% to $201.5 million. This remarkable growth was largely due to the profit from discontinued operations and the net gain on the demerger.
Underlying EBITDA decreased 13% to $120.6 million, and the company reported a cash position at $363.6 million which was mainly attributable to cash inflows from operations of $77.8 million and efficient cost management.
Underlying Net Profit After Tax (NPAT) stood at $79.2 million. Underlying EPS increased from 20.5 cents per share (cps) to 26.3 cps, while statutory EPS increased from 2.9 cps to 20.4 cps and there was no declared dividend for FY25.
They invested $19 million in equity linked financial assets, and a further $37.1 million was invested in essential and strategic capital expenditure projects and initiatives.
Total Assets reduced by 20.29% to $757.2 million, with large reductions in Cash & Cash Equivalents by 42.29% to $363.6 million, and Investments in Financial Assets, which was down 12.1% to $38.1 million. Trade Receivables & Other Assets increased 25.74% to $347.8 million.
Total Liabilities increased slightly by 1.2% to $680.9 million and Total Equity decreased significantly by 33.27% to $575.1 million.
Cash Flows (CF) from Operating Activities decreased 53.21% to $91.7 million; CF from Investing Activities (as a cash outflow) decreased by 18.36% to ($62.7 million); and CF from Financing Activities decreased from +$1.8 million to ($295 million).
Demerger of Webjet Group
The demerger, effective 30 September 2024, resulted in the creation of two independent businesses, Web Travel Group, focusing on the B2B travel distribution through WebBeds, and Webjet Group, managing the B2C operations. This move aimed to enhance the focus and growth potential of each business segment.
The shares in Webjet Ltd were transferred to Web Travel Group’s shareholders by way of an in-specie distribution of $0.93 per share. The fair value of the demerger distributed amounted to $365 million consisting of a capital reduction of $123.2 million and a demerger reserve of $241.8 million.
Operational Highlights & Sustainability
The B2B segment, WebBeds, continued its growth trajectory with a 22% increase in Total Transaction Value (TTV) to $4.9 billion. However, the EBITDA margin declined due to lower-than-expected revenue and increased operating expenses. Bookings also increased 20% from 7 million in FY24 to 8.4 million.
The company made significant strides in sustainability, including re-baselining its carbon footprint post-demerger and preparing for mandatory climate reporting.
They reported high employee engagement at 78%, a mix of 40% women on the board, with 51% women in senior management and 51% female managers. They also reported strong diversity in their workforce and zero lost time injuries.
Web Travel Group had 5.6 million customer service interactions, and launched a Customer Self-Service Portal Management function which aims to better support engagement with customers, suppliers and commercial teams. The company reported zero cyber security incidents and zero data privacy breaches, as well as establishing an artificial intelligence policy.
Capital Management
During the period the company took measures to minimise the potential effect of the $250 million Convertible Notes that are due for redemption or conversion in April of 2026. They invested in a hybrid financial asset which provided access to 8.4 million shares in the Company, and they also completed a $150 million on-market share buyback, amounting to 31.2 million shares.
Challenges and Strategic Responses
The first half of FY25 presented challenges, including lower TTV margins in Europe due to external events like the Paris Olympics and the European football championships. The company responded by refining pricing strategies and enhancing supply chain management to stabilise margins.
Governance and Leadership Changes
The demerger led to changes in the board composition, with Don Clarke and Katrina Barry transitioning to Webjet Group. Rachel Wiseman joined the board of Web Travel Group, bringing extensive experience in tourism and technology.
Looking Forward
Looking ahead, Web Travel Group Limited remains committed to its growth targets, aiming for $10 billion in TTV by FY30 with a focus on enhancing supply, expanding market reach, and leveraging technology for operational efficiency. They are aiming to deliver 50% EBITDA margins in FY27 despite an uncertain global macro-economic environment.
FY25 was a transformative year for Web Travel Group, marked by realignment and strong financial performance. The company is well-positioned to capitalise on future growth opportunities in the global travel market.
