I trimmed my holding at 3.89 and bought them back and then some at 3.19 today. I told myself to only buy more at 3.00 or below but I couldn't help myself. The biggest risk imo is more capital required. But I am fairly confident WEB already has enough money to see them run until travel is back to normal. I looked through the FY 19 annual report last night and was comforted to see that web beds makes up just above 50% of revenue. Half of this comes from Europe. My understanding is that the flights between the EU countries have opened up and travel is being encouraged to help the local tourism industry. I'm not expecting back to normal in EU, but I think having 60% of previous year is not out of the question. Seeing the cash raised was enough to see Webjet through till atleast the end of 2020, I think with a bit of revenue trickling in through Webbeds, we should be OK for a lot longer. Even without a vaccine, travel wont stay at 5% of pre-covid levels so I am expecting WEB to be breakeven by the end of the year at the latest.
I am eagerly awaiting the H1 report in August. It would be prudent to wait till then to make sure that WEB is indeed breaking even or about to break even but there is a good chance that the SP will be much higher by then. Also, if there is anything unexpected positive in the report, the SP would take off. I am also keen to see whether the deferred dividend will be reinstated. Although the dividend amount is nothing huge for me, it would show me the company is not worried at all about meeting their obligations.
I'm kind of hoping the SP goes down to 2.60 so I can buy even more.
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