Australia-listed Webjet Limited has seen double-digit growth for the year to end-June across most of its B2C and B2B businesses.

However, a “technical accounting issue” relating to a supply and contracting deal between its European bedbank Sunhotels and UK tour operator Thomas Cook means the numbers are currently unaudited.

Webjet execs insist that the Thomas Cook/Sunhotels deal “will deliver significant long-term value, regardless of accounting treatment” and has agreed to accept its accountant’s stance “on grounds that Webjet’s leadership team is better engaged in focusing on executing its growth strategy and integrating JacTravel without the distraction of a protracted debate over a technical accounting matter that has no bearing on future cash flows or the economics of the Thomas Cook agreement.”

It appears as if Webjet will not be able to include some of its Sunhotels income as revenue during a transitional phase through to 2019, while having to accept the costs. In the year to end-Jun17, this new approach has cost Webjet more than A$11 million ($9 million) in EBITDA.

Profit motive

The rethink on how the deal should be accounted leads to three different set of figures, all of which show the business in the black when looking at net profit after tax – the statutory result is A$52.4 million ($42 million); in terms of “continuing operations” the gain is A$33.1 million ($26 million) with its underlying performance netting A$40.9 million ($33 million).

Leaving the accounting issue aside and looking at operations, the B2B side of the business – WebBeds – continues to grow. The unit includes Europe-focused Sunhotels, Lot of Hotels (focused on the Middle East and Africa but expanding into North America) and FIT Ruums in APAC (launched last November). The businesses handled 726,000 bookings – up 49.4% – with a total transaction value of A$482 million ($384 million) – up 39.5%.

Lots of Hotels was helped by the improving economic conditions in the Middle East with booking volumes up by 74% year-on-year at 283,000; Sunhotels volumes were up 22.5%. There are no year-on-year comparisons for FIT Ruums but it has pulled in A$80 million ($64 million) of TTV in only eight months.

After the year ended, WebJet acquired UK-based Jac Travel to add to its B2B line-up, making it the second largest bedbank in Europe and the second largest in the world.

Counting on consumers

The B2C operations have also turned in double-digit growth. Its core Webjet OTA saw volumes up 11.4% to 1.4 million and TTV up 15.3% to A$1.14 billion ($907 million). Flight and package bookings were up by 12.7% and 38.2% respectively, with standalone hotels down by more than 20% “in line with our strategic decision to no longer actively promote standalone B2C hotel offerings”.

Online Republic, a New Zealand-based OTA which specialises in car hire, motorhome rental and cruise which Webjet Ltd bought in June 16, contributed its first full year’s worth of business. Booking volumes were up 28% to 446,000 with TTV of A$267 million ($212 million) up 22%.

During the year it sold Zuji to Hong Kong’s Uriel Aviation for $A56 million ($45 million) double what it paid Travelocity for the business four years previously. Webjet continues to run a Zuji site in Australia under licence but the volumes are not material to its overall B2C performance.

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