ASX:WJL
Webjet Group Ltd
Investment Summary
The fund managers believe that Webjet Group Ltd (WJL) presents a mixed investment outlook following its recent demerger from Web Travel Group. Endeavor Asset Management expresses a cautious sentiment, having exited their position after achieving their valuation target, indicating a preference to redeploy capital elsewhere. In contrast, Naos Asset Management has recently invested in WJL, highlighting its market-leading position in the Australian OTA sector and the significant capacity for investment, with around $100 million available for growth initiatives. They note that being a standalone entity allows WJL a renewed focus, free from the resource constraints of its former structure, which could facilitate growth. Importantly, the Australian OTA leisure market offers a large addressable market for WJL, presenting opportunities beyond its current airline ticket sales, such as higher-margin services. Despite challenges, Naos anticipates that the demerger could ultimately lead to positive shareholder outcomes.
Commentary From The Managers
Naos Asset Management
30 Sept 2024
$1.00
- WJL, a recent spin-off from Web Travel Group (ASX: WEB), operates as the consumer-facing division known for booking flights, hotels, and hire cars.
- Despite being perceived as the poor cousin of the demerger, historical trends suggest that spin-offs can deliver significant shareholder value.
- Market Leading Position – WJL has maintained a stable market share and high brand recognition, holding the number one position in the Australian and New Zealand OTA markets.
- Capacity to Invest – WJL has approximately $100 million in available cash, providing the ability to pursue organic growth initiatives and explore acquisitions.
- Renewed Focus – As a standalone entity, WJL can now dedicate resources specifically to its growth strategy without competing with the B2B segment.
- Large Addressable Market – With substantial opportunities in higher margin adjacent products like car rentals and accommodations, WJL's potential for revenue and earnings growth is significant.
Endeavor Asset Management
30 Sept 2024
$1.00
- Endeavor Asset Management exited their position in Webjet Group (WJL) following a successful demerger.
- The decision was made after achieving valuation targets for the investment.
- Although the travel sector presents opportunities, Endeavor Asset Management chose to redeploy capital to other areas.
Naos Asset Management
30 Sept 2024
$1.00
- WJL was the final new investment made in Q1 FY25.
- WJL represents the B2C business of the formerly combined Webjet businesses.
- The combination previously included a B2B business segment.
- Further details on the WJL business can be found in the company updates on page 13.
- Naos Asset Management continues to hold this position due to these strategic considerations.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.