Webjet shares fall on profit guidance
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SYDNEY, Nov 14 AAP
November 14 2012, 10:36AM
Online travel company Webjet has indicated its net profit may fall in the current financial year due to the cost of expansion and a slow travel market.
Webjet said on Wednesday the leisure travel market has shown very low growth levels in the last four months, in both transactions and levels.
The company had therefore increased its spending on marketing by about $1 million, which has been reflected in its market share, it said.
Webjet also continues to expand in the Middle East, and the cost of that expansion will be no more than $1.5 million in the year to June 30, 2013, it said.
Webjet expects its earnings and net profit in the 2012/13 financial year, before the impact of expansion costs, to increase by at least 10 per cent.
That indicates the 2012/13 result including expansion costs would be similar or slightly lower than the previous year, given Webjet made a net profit of $13.6 million in 2011/12.
Webjet shares were down 29 cents, or seven per cent, at $3.84 at 1025 AEDT.