Webjet Group (ASX:WJL) Announces Inaugural Dividend Amidst Resilient 1H26 Financials

Webjet Group (ASX:WJL) has announced a significant corporate milestone, declaring its Webjet Group inaugural dividend following the release of resilient financial results for the six-month period ending 30 September 2025. The online travel agency has declared a fully franked interim dividend of 2.0 cents per share, reflecting a 100% payout ratio of its Underlying Net Profit After Tax (NPAT).

This decision notably exceeds the company’s stated target payout range of 40-60%, highlighting a strategic move to maximise the distribution of available franking credits to its shareholders. For the half-year, Webjet Group reported revenue of $67.9 million (down 1%), Underlying EBITDA of $14.4 million (down 9%), and Underlying NPAT of $7.8 million (up 16%). The company’s balance sheet remains robust, with a net cash position of $111.9 million.

These results were achieved despite considerable headwinds in the travel sector, including geopolitical tensions in the Middle East, tariff-related travel disruptions, and persistent cost-of-living pressures impacting leisure travel demand. Furthermore, elevated Australian domestic airfares contributed to a subdued market environment.

What is the significance of this dividend for shareholders?

The Webjet Group inaugural dividend is a key component of a comprehensive capital management strategy implemented following the company’s demerger from WebBeds. Its fully franked status offers considerable value for Australian resident shareholders, as the attached franking credits can be used to offset personal tax liabilities or potentially generate refunds for eligible investors.

This approach aligns with the Board’s intention, first announced in August 2025, to prioritise the distribution of franking credits. The Board has indicated it will continue this strategy, contingent upon maintaining a strong cash position and sufficient balance sheet flexibility for future growth investments. The 100% payout ratio for 1H26 is therefore considered a special dividend, not a permanent change to the company’s 40-60% target range.

How do payout ratios and franking credits apply to this payment?

A payout ratio indicates the proportion of net profit a company distributes to shareholders as dividends. Webjet Group’s 40-60% target is common for companies balancing shareholder returns with reinvestment for growth. The decision to implement a 100% payout ratio for this period was influenced by several factors:

• Strong cash position: With $111.9 million in unrestricted cash and no borrowings, the company has ample financial flexibility.
• Franking credit utilisation: The move maximises the value of accumulated franking credits for shareholders.
• Post-demerger optimisation: Following the separation from WebBeds, the company is refining its capital structure as a standalone entity.

Franking credits, or imputation credits, represent the corporate tax a company has already paid. For Australian resident investors, these credits make dividends more tax-effective by reducing the shareholder’s personal tax liability on the dividend income.

When will the dividend be paid?

To be eligible for the Webjet Group inaugural dividend, investors must be on the company’s share register by the record date. The key dates are outlined below:

Investors must have purchased shares before the ex-dividend date of Thursday, 27 November 2025. The official dividend payment will be processed on Wednesday, 10 December 2025. Webjet Group has advised shareholders to ensure their registered details are up-to-date via the Automic Investor Portal to facilitate a smooth payment process.

Financial Performance Demonstrates Operational Resilience

Webjet Group’s 1H26 results highlight the company’s resilience in a challenging market. While booking volumes declined 8% to 724,000 and Total Transaction Value (TTV) fell 3% to $726 million, revenue only decreased by 1% to $67.9 million. This suggests a successful focus on higher-margin products and effective pricing discipline.

Despite planned investments in people and technology aligned with its FY30 Strategic Plan, operating expenses saw a modest increase of just 2%. Furthermore, Underlying NPAT grew 16% to $7.8 million, supported by interest income from the company’s $111.9 million net cash position and lower share-based payment expenses.

CEO Katrina Barry stated, “Our results for the period were broadly in line with expectations, demonstrating the resilience of our business, despite experiencing challenging market conditions. We delivered solid revenue margins, maintained strong cost discipline, and continued to make meaningful progress across the key levers of our FY30 Strategic Plan.”

What is Webjet Group’s Strategic Outlook?

Webjet Group continues to execute its FY30 Strategic Plan, which is centred on four pillars designed to double the company’s Total Transaction Value by FY30. These pillars include:

1. Growing OTA market share of outbound international flights, a higher-margin segment with significant opportunity.
2. Enhancing technology platforms to improve user experience and drive conversion rates.
3. Expanding ancillary revenue streams through new product offerings and partnerships.
4. Optimising operational efficiency through continued cost discipline and process automation.

With a strong balance sheet, including a $20 million undrawn credit facility, the company is well-positioned to navigate near-term market uncertainties whilst investing in these medium-term growth initiatives.

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