Webjet result exceeds market expectations

Webjet (ASX:WEB) announced a result that exceeded market expectations driven by an outstanding performance from the B2C division where TTV margin accelerated by 0.6% in the second half as a result of strong operational leverage brought about by continued market share gains. But the result itself was somewhat overshadowed by a £21m deal signed in its hotel business which provides hotel inventory to travel agents. The deal with large UK-based travel company, Thomas Cook, involves WEB taking over Thomas Cook’s 3000 hotel supply contracts and in turn WEB entering a minimum five-year deal to supply these hotels, and its other hotels, to Thomas Cook. This provides WEB’s B2B division a material step change in scale, as well as directly related financial benefits (not material until FY19), providing us greater transparency on continued high EPS growth into the future for the company. (VIEW LINK)