Traditional travel agency businesses have struggled recently, with shares in industry poster child Flight Centre sinking as low as $12.81 this year, more than 50 per cent below the heady heights of 2002. This may indicate that travel companies with shopfronts are struggling but the industry's online competitors seem to be going from strength to strength. Webjet is the largest player, capitalised at $40 million and recently posting year-to-date sales of $67.3 million, a 350 per cent increase on last year. It also posted a nine-month net profit of $775,000 in March and with its share price at 14 ?, trades at a price-earnings multiple of about 35. The other locally-listed player is tiny Travel.com.au, which listed in 1999 but began a turnaround process 21/2 years ago after losing $30 million in its first three or so years. It bought its own technology engine in December then started work on a subscriber base of 600,000 people through two URLs, travel.com.au and lastminute.com.au, a 75 per cent-owned joint venture with the UK's Lastminute.com. The company lost $745,000 in the six months to December, but it has $2 million in the bank and total annual transaction value now approaching $50 million. Having slashed costs, the company says it's approaching break-even point. Shares traded between 12 ? and 14 ? last week, putting Travel.com.au on a multiple of just one times revenue. Small companies have been hit hardest by profit downgrades in recent months, but recent research shows small caps still dominate the dividend-growth charts. The top 10 performers all come from outside the S&P/ASX 50 large-cap index.
TVL Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
