Travel stocks are on their way to a spectacular FY23
Nick Sundich, November 17, 2022
Travel stocks have seen pent-up demand unleash for months, but this has not been reflected in their results as fast as shareholders might have expected. But this week, as several travel stocks release results or hold AGMs and unveil trading updates, investors have begun to see the demand with their own eyes.
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Webjet returns to pre-pandemic bookings
Webjet (ASX:WEB) released its 1HY23 results and told shareholders that its group bookings were back at pre-pandemic levels. Although Total Transaction Value (TTV) wasn’t at pre-pandemic levels yet, it was fairly close (at 90%) and it had a 16% lower cost base than pre-pandemic levels.
Webjet recorded $72.5m in EBITDA (up 557% from the prior corresponding period) and $175.7m in revenue (up 217%). Shareholders in this travel stock sent it up by over 5% this morning.
Webjet (ASX:WEB) share price chart (Graph: TradingView)
Flight Centre rebounding but isn’t rewarded
Webjet was not the only company among ASX travel stocks to report soaring demand. Flight Centre (ASX:FLT) held its AGM earlier this week and told shareholders that its own TTV was up 246% to $6.8bn.
However, shareholder response was more muted because margins were softer than shareholders had anticipated. This is because several airlines have slashed front-end commission payments.
Other travel stocks are bouncing back too
Sticking with travel stocks, Corporate Travel Management (ASX:CTD) held an AGM with a trading update a couple of weeks ago. It told shareholders to expect $143m in EBITDA in FY23, up from $59.8m in FY22. This was even without China, a major market prior to the pandemic, being open and any certainty as to when it would re-open (if ever).
Auckland Airport (ASX:AIA) also reported traffic numbers although given New Zealand was late to re-open, numbers were at 71% of pre-COVID levels.
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