Media Release
Quarter Activity Period Ended 30 September 2000
5th June 2000
Dear shareholder,
As foreshadowed in our Annual Report, and subsequently updated in our formal filing with the ASX, we are pleased to advise that your company's revenue growth has continued in the quarter ended September 30.
Some key indicators are:
Transactions values processed increased from approximately $300,000 to nearly $800,000.
Bookings increased from 198 in the June quarter to 477 in the September quarter.
Net commissions that we received in cash increased from $12,000 to $28,000, noting that there is a substantial lead time difference between bookings and actual net commissions received.
This growth appears to be continuing in the month of October despite a relatively soft travel market post-Olympics, particularly in New South Wales, and if the first three weeks of October continue through to the end of the month, we would expect a revenue growth in October,compared to September, of between 20% and 30%. In other words, we currently have a compounding monthly revenue growth of some 30%.
As reported to the ASX, our total negative cash flow for the period was $552,000 which is in line with budget forecasts, and is in fact on an annual basis, likely to be some $2 million better than envisaged in our Prospectus. Webjet finished the September 30 quarter with some $4.7 million cash and no debt.
Your company has a number of exciting market initiatives scheduled between now and the end of the calendar year, which for competitive reasons, we obviously need to keep confidential at this stage. Given a reasonable travel market over the next few months, we currently see no reason why the current growth rate cannot be sustained through the full half year to December 31.
Webjet has also recently announced a technology contract with Face Time Communications Inc., a United States based company, which specialises in the provisioning of online internet customer service software. The implications are:
Our customers will have enhanced online assistance.
Over a reasonable period the new software package should enable us to significantly streamline our customer service operations and on like for like volumes achieve substantial cost savings.
The combination of the Face Time software with our existing Webcam and voice over telephony position cements your company's position as a leader in the provisioning of online travel to the extent that in the month of October nearly 40% of our total bookings have been processed online in a completely robotic process.
Our objective is to build that base and to drive the robotic percentage, which of course is far cheaper for us to process, to between 50% and 60% of our business by the end of June 2001.
Over recent months there has been a great deal of press speculation about the role of internet travel relative to the sale of travel through traditional travel agencies, and a number of articles have appeared indicating travellers use the internet as a research medium, but often then transact the business through a physical agency. As you will see from our online robotic booking percentage, Webjet is not necessarily experiencing that phenomena; at least certainly not to the degree that press articles would indicate. Indeed, our Challenge Me facility shows early evidence of in fact reversing the position to the extent that we have invited travellers who have obtained quotations from traditional agencies to effectively challenge Webjet to better the price and turn this perception around 180 degrees. Some forthcoming press advertising will more heavily emphasise this facility following a successful pilot program in Victoria
last month.
In a more general investment market sense, your Board is of course vitally concerned about the current further wave of 'dotcom' bashing. It is our view as set out by your chairman in the Annual Report that Webjet is not a 'dotcom company.' Our business plans are not based, or predicated upon, vague propositions associated with the internet. Webjet utilises the internet to achieve immediacy of customer communication in a low cost manner, and provides the capability of delivering real online, real time travel product information and bookings. We are a travel company which uses the internet for specifically defined commercial purposes, and within that context, I think it is pertinent to point out that your company therefore operates in an environment with two very significant growth accelerators: the travel industry itself, which is currently growing in Australia at nearly double the GDP, and the use of the internet for commercial purposes, which continues to grow at an exponential rate. Unfortunately the general press in its pursuit of headlines, appears to group eCommerce businesses under a vague generic heading, and rarely if ever, undertakes a detailed business review, and as a consequence doesn't necessarily have the fullest possible understandings of the commercial dynamics and differences between
eCommerce companies
Webjet is endeavouring to address this matter and has recently engaged under contract a specialist PR consultant with expertise in this area with the objective of trying to more clearly define our company's business plans to the broader financial market. . In that your board holds a substantial percentage of the total issued capital of the company, you can be sure that this matter is receiving appropriate and close attention, but not of course to the exclusion of actually running the business, which is our prime, fundamental obligation to you as owners.
Finally, may I take this opportunity of again reminding you of our shareholder benefit program which can be accessed through the website, and encourage you to 'book
with Webjet.'
Regards,
David Clarke
Managing Director