Thomas Cook collapse, coronavirus weighs on Webjet

Revenue at travel agency Webjet was up by 24 per cent for the first half of 2020 but the company experienced a "key disappointment" after the collapse of British travel group Thomas Cook last year saw it write down $44 million in unpaid bills.

The online travel booker also predicted the coronavirus would have an impact on second half earnings of between $7 million to $15 million as its business accommodation bookings and tour packages were hit by booking slowdowns related to the virus.

Webjet chief executive John Guscic.

Webjet reported statutory revenue of $217 million for the first half of the year. Its statutory net profit after tax was $9 million, however — a 64 per cent drop on the prior corresponding period.

The first half numbers included acquisition amortisation costs of $11.9 million. Webjet chief executive John Guscic said the company had successfully accelerated its online accommodation supply business WebBeds as the business continues its transition to an global online travel booking site.

However, the collapse of UK travel booked Thomas Cook forced the company to face significant unpaid bills.

"The key disappointment during the period was the collapse of Thomas Cook in September 2019," Mr Guscic said.

Webjet was owed $44 million from Thomas Cook at the time, but due to the compulsory liquidation of the business it was forced to write down those debts.

Webjet updated earnings guidance for the full year to place earnings before interest, tax, depreciation and amortisation at between $147 million and $165 million.

The company said it would have upgraded guidance but that the impact of coronavirus would have a one-off hit to earnings.

"In the current environment, it is very challenging to predict with certainty the expected impact in 2H20 EBITDA results," Mr Guscic said.

However, key areas seeing a slowdown related to the virus were business bookings through WebBeds, the company's package tours, which are highly reliant on Chinese tourists, and motorhome and cruise bookings through the Online Republic division.

Webjet will pay a half-year dividend of 9c a share, to be paid on April 16.

More to come

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