Media Release
Capital Management Strategy
2nd November 2006
Webjet today announced the general framework concerning the use of cash reserves and associated capital management issues as foreshadowed in the 2006 Annual Report.
Specifically,
- Subject to no adverse change to trading conditions and general market conditions, it is intended that a maiden dividend will be paid for the 06/07 financial year in October 2007 of approximately 0.5 cents per share. At this juncture franking details cannot be concluded.
- The company is currently examining, as indicated in the Annual Report, the possibility of strategic acquisitions which would provide for a logical extension of the company's current business plan. A number of possibilities are under close examination both internally and in conjunction with our external professional advisors. At this juncture no definitive proposition has been determined but in view of the major industry consolidation which has taken place over the last 12 months, the Board considers that there is a significant possibility that appropriate opportunities will arise before the end of the financial year 30 June 2007.
Against that background, the Board considers it prudent to ensure that our balance sheet is maintained at maximum strength, however, if such opportunities do not arise or appear likely at the end of the financial year, the company presently intends to announce an on market share buy back program in the range of $5-7 million (or up to 5% of the issued capital), on appropriate conditions that will be determined at the time.
- In the interim, Webjet is pursuing an aggressive expansion, again as noted in the Annual Report relating to:-
- Our current Australian market share and the forthcoming launch of sophisticated online packaging
- The final stages of the development preparatory to the release of PLANIT, which is expected to occur immediately after Easter 2007
- These projects are receiving intensive development and propulsion and as evidenced by the September quarter results, the core business is continuing to accelerate as a consequence of our previously announced aggressive marketing campaign.
Further updates on these deliberations will be announced to the market at the half year accounts filing for 31 December 2006.