According to the prospectus, TVL's projected full-year loss is AU$4.9 million. This compares to the reported operating half year loss of AU$3.63 million, meaning it was slightly higher-than-expected, but still expected to be in line with full-year expectations.
According to chief executive David Tonkin current growth is expected to continue into the second half. -The figures record a strong half-year result for travel.com.au and a period of strong customer support," he said. This was reflected in website activity which reveals TVL as one of the top three visited sites along with Qantas and Ansett. Membership has also been reflective of strong growth. Membership has grown 300 per cent to 160,000 since April 1999.
The strong outlook for TVL is not only being touted by its chief executive. Ord Minnett private client broker Brendan Seeto is keen on the stock. -I have been recommending the stock to clients of the basis of good growth prospects and an expanding global presence," he commented. Coinciding with the profit results, TVL took an honoured position as one of only 19 leading Australasian internet and information technology companies included in Asiaweek/CNN Asian Internet Index.
Despite some good reasons for this stock to rally, the price has struggled since the initial response to the profit report. This week's performance may be more to do with investor perceptions than the facts.
Debuting in May last year above the AU$3.00 mark, travel.com.au halved in value in a matter of weeks, trading under a dollar in August 1999. With many technology companies listing and immediately trading at multiples above issue price, TVL's initial performance was disappointing when placed in that context. This may be the first clue as to why it is reluctant to continue upwards now. When investors see a stock sell off as sharply as TVL, they are reluctant to jump in again with any force quickly.
-When it went to AU$3.19 on day one, that was because we were only the second internet float in Australia after LiberytOne," Mr Tonkin recalls. -I think there was just so much hype people were prepared to buy at any price."
A quick glance at the chart reveals sideways activity since the August all-time low, with little headway. Mr Tonkin thinks a second clue to the lack of upside has come from a general perception of the business by the largely smaller investor base. -Travel generally has not been a high flyer, because the flavour has been for these new models of exciting ways to do it," Mr Tonkin speculated. -We consider our positioning in this territory is really strong but the market doesn't really understand that."
