WTF, through the aforementioned websites, offers a variety of services that include flights, insurance, car rental, and travel accommodation and packages across hotels, motels, serviced apartments, resorts, guesthouses and bed & breakfasts. The service allows customers to book rooms at a heavy discount and at the same time help hotels better manage their vacancies.

FY12 impress, while 1H13 disappoints

At first glance WTF’s FY12 results looked good, however when placed in the context of the weak domestic travel market, the results were fantastic. Revenue over the year was up 5%, to $145.3 million. Net profit was $58 million, up 13.8% on the FY11 result.

The results were driven by an increase in accommodation rates and sales, and also some significant growth in WTF’s flight booking service. WTF’s operating profit margin also increased from 56% to 59%, with the group demonstrating good cost control whilst expanding revenue.

On a more disappointing side, WTF said the first quarter of fiscal year 2013 continues to reflect economic weakness. The 1Q13 performance was in line with the 1Q12 and likely to continue for the remainder of 2012.

The group is essentially saying that it expects little revenue or margin growth for the 1H13 as the operations continue to endure a period of prolonged weakness.

The good news

The AGM was not all bad news with WTF announcing its plans to lift its booking commission rate by 1% from 1 January 2013. This will be followed by a further lift of the same amount on 1 January 2014.

The group had $1.16 billion worth of transactions in FY12, and a 1% increase in commissions on this figure would increase of $11.6 million in revenue.

If the group’s strong operating profit of 59% stays consistent, the increased commissions would equate to a pre-tax profit increase of $6.8 million.

Even with flat transaction growth over the next two years, the two sets of increased commissions suggest the company still has the ability to grow earnings.

Outlook

WTF’s FY12 results showed a company that is able to grow earnings even in a tough environment. We think that the increase in commissions starting 1 January 2013 will negate the effect of continued weakness within the domestic accommodation market.

We would also expect some of the increased revenue to be redirected towards expanding into the less mature flight and holiday letting businesses, which has already started to show promising signs. Given the aforementioned factors we feel WTF has plenty of scope to continue growing its earnings, providing further support for the share price.

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Perseus Mining (ASX:PRU) is a gold explorer, focused on under-explored gold belts in West Africa.

The group’s Central Ashanti Gold Project has reserves of 3.3 million ounces (Moz) of gold, plus 1.5 Moz Measured and Indicated gold resources and 1.9 Moz Inferred gold resources.

A further 570,000 ounces of indicated gold resources and 1.21 Moz inferred gold resources are held on PRU’s West African projects, Grumesa and Tengrela.

The two projects (Central Ashanti Gold and Tengrela) aim to put out 670,000 oz per year once at full production, which would make PRU Australia’s second-largest listed miner by production after Newcrest Mining.

Further mineral resource and reserves upgrades are planned for later this year.

The miner recently completed its first gold pour during commissioning at the Central Ashanti Gold Project.

Though PRU is currently an explorer, the company is on track to become a producer.

PRU’s aim is to become a 400,000 ounce per annum gold producer from 2013, and the company is on target to achieve this following its consistent over-delivery on targets.

PRU is looking promising owing to its exposure to the under-explored gold belts in West Africa and on strength in gold prices.

Operational update

Following a recent updated economic analysis incorporating a revised life of mine plan (LOMP), PRU has planned throughput optimisation upgrades over the next 18 months.

Under the upgrade, average process throughput will increase from 5.5 Mtpa to 7.9 Mtpa.

Average annual gold production is set to increase by 38% to approximately 265,000oz.

Cash costs will drop to US$551/oz with a base case gold price of US$1,150/oz.

As a result, PRU’s EBITDA over the life of the project has increased by 127% to $1.56 billion.

The early start up of the Central Ashanti Gold Project could push the gold miner’s EBITDA up to US$300 million a year in 2013 and 2014.

Of course, the company will continue to lose money until it starts producing, although it has ample funding facilities to pursue its exploration activities and mine development plans.

Looking ahead

Perseus Mining is turning market heads over its consistent over-delivery on targets. The group is also in good financial stead, with approximately US$100 million cash.

Though PRU’s recent financial results are nothing to write home about, this is typical of a company in its emerging stages.

PRU is looking promising owing to its exposure to the under-explored gold belts in West Africa and on strength in gold prices.

The group will continue to expand its gold resources through rapid exploration of existing tenements and the acquisition of prospective new projects, while developing the Central Ashanti Gold Project.

Gold has gained significant ground this year, consistently reaching fresh record highs.

However, the precious metal saw a pullback late last week but is still in a good position to register further gains.

The metal printed highs of around US$1900 early last week and continues to hold its ground well above US$1800.

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