👉 Background: Web Travel Group is the owner of WebBeds, a travel wholesaler that sells hotel rooms to travel agencies in bulk. And, if WebBeds sounds familiar to you, it’s because it used to be part of the Webjet business. But in September last year, with WebBeds biz booming and Webjet was not, the two “consciously uncoupled”. WebBeds demerged from Webjet and listed on the ASX under Web Travel Group.

👉 What happened: WebBeds’s post-split glow-up is real after its total transaction volume jumped more than 20% to $4.9 billion for the year to March 31st. But, despite this, WebBeds still saw its profit down 22% due to a squeeze in their margins.

👉 What else: Despite the profit-hit, WebBeds' investors did not mind one bit, with its share price jumping 14%… because in a travel sector full of bad news right now, WebBeds looked like a rockstar.

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What's the key learning?

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💡When an industry looks gloomy, a single company bucking the trend can become the market’s golden child. Investors love a neat story so when most companies in a sector are struggling, they tend to assume everyone’s struggling.

💡For example, when Flight Centre and Corporate Travel Management downgraded their growth forecasts, investors assumed that would be the same for the whole sector: expectations drop… valuations dip... But WebBeds stepped up with stronger-than-expected bookings and growth.

💡So despite WebBeds’ net profit after tax (NPAT) falling 22%, investors pretty much shrugged it off. Because when you’re the outlier in a struggling industry, investors tend to reward you for it.