Already a subscriber?Online travel agent Webjet is one of Australia’s great and often underappreciated disruptors. Now, it is time to disrupt itself.
The way chief executive John Guscic tells it, having failed to take that Australian flights booking arm global, he took Webjet’s board another idea in 2012: use its skills in the aviation sector and apply it to hotels, which hadn’t been done before. That hotels business, WebBeds, now makes three times as much money as its core online travel agency arm. WebBeds is growing faster, makes five times the bookings every year, is run separately out of Dubai, and makes only 5 per cent of its sales in Australia.
It is a very 2024 plan – create two simpler businesses with separate management teams, addressable markets and capital structures, and let shareholders decide what they are worth. The one number that matters most for shareholders – earnings per share – is less than it was FY19. Statutory earnings per share was 18.9¢ in the year to March 31 and 47¢ in FY19., now has three times the number of shares on issue and four times the number of shareholders it did five years ago.
We shouldn’t be too surprised by Wednesday’s announcement. It came only two months after Webjet’s strategy focused solely on WebBeds and outlined its $10 billion-a-year total transaction value target.
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