Shares of Web Travel Group Ltd (ASX:WEB) surged 18.6% to A$3.51 during Monday's trading session, recovering a significant portion of the steep losses incurred late last week. The rebound followed the company's reaffirmation of its fiscal year 2026 earnings guidance, which helped assuage some investor concerns triggered by the announcement of a tax audit in Spain.
The company maintained its EBITDA forecast for FY26, holding steady at a range of A$147 million to A$155 million. This guidance was reiterated despite the disclosure that the Spanish Tax Agency's Special Delegation of the Balearic Islands initiated an examination of the company's local subsidiary on February 5. The audit is currently in its preliminary stages, focusing on direct taxes for the period spanning April 2021 to March 2024, as well as indirect taxes from January 2022 through December 2025. Management has stated it is cooperating fully with authorities and will provide further updates to the market as necessary, in compliance with ASX continuous disclosure rules.
Analysts have cautioned that the stock may experience continued volatility due to the inherent uncertainty surrounding the audit's duration and potential financial impact. RBC Capital Markets analyst Wei-Weng Chen noted the process is still in the initial questionnaire phase, with no direct engagement yet, making it difficult for management to estimate any potential liability. The analyst highlighted that Spain represents approximately 10% to 12% of the group's total revenue, a factor that provides some context for the scale of the review but does not eliminate the overhang of uncertainty.
The sharp price movement last Friday, which saw the share price plummet from A$3.81 to as low as A$2.475, prompted a query from the ASX. In its response, Web Travel Group stated it was not aware of any undisclosed information that would explain the dramatic sell-off. The company attributed the timing of its official announcement to prior reports in Spanish media, maintaining that the audit update itself was not considered market-sensitive information.
Beyond the immediate tax concerns, market participants are also monitoring the underlying operational momentum of the business. The company has projected double-digit booking growth for fiscal year 2027 and has kept its Total Transaction Value (TTV) margin forecast stable at 6.5%. This metric represents the company's take-rate from total bookings and is a key indicator of profitability.
Looking ahead, investor focus will shift to any new developments regarding the Spanish tax review. Traders will be watching to see if Monday's rebound can be sustained in the absence of fresh positive news. The company has scheduled its FY26 results briefing for May 28, according to its published investor calendar. In the interim, the market will likely remain sensitive to any updates on the audit's progress, as prolonged investigations can consume management resources and create headline risk, even if the ultimate financial penalty proves to be limited.
The trading session on Monday saw shares oscillate between A$3.15 and A$3.55, demonstrating the heightened volatility. This follows the previous Friday's close at A$2.96. The core challenge for investors remains accurately pricing in the risk associated with an audit where concrete details are still scarce, balancing the reaffirmed financial guidance against the unknown contingent liability.
