Webjet has announced a net profit of more than $128 million for the past 12 months.
👉 Background: Webjet is the Australian online travel agency that started back in 1998. During the COVID years, Webjet’s consumer business got whacked. It was forced to raise more than $750 million dollars in shares and convertible notes after consumer travel went to a complete halt.
👉 What happened: Now, Webjet has announced a net profit of more than $128 million for the past 12 months. And this was largely led by the B2B side of its business called Webbeds.
👉 What else: Webbeds acts as a room-inventory conduit between hotels and customers... like tour operators. Since Webbeds earned three times the profit of the B2C unit, Webjet is talking about splitting its business into two separate ASX-listed companies.
💡Sometimes the sum of a company’s parts can be greater than the whole… especially when those parts operate under fundamentally different business models.
💡Webbeds serves a global market, which means a much larger addressable market - whereas Webjet is focused on Australia and New Zealand only.
💡When these two businesses are combined under one ASX-listed-umbrella, it can dilute their overall valuation. And this proposed split is part of the reason why Webjet’s shares soared 13% after the announcement.
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