Key Highlights

  • Record group TTV increased 4.7% to $25.7 billion in FY26, with growth across both leisure and corporate operations.
  • Underlying PBT declined 4% to $278 million after Q4 disruption reduced leisure profit by about $60 million.
  • Statutory NPAT increased 38% to $149 million, while EPS rose 42.9% to 70.9 cents per share.
  • FY26 dividends increased 5% to 42 cents per share, with early FY27 leisure trading showing record July TTV.

Flight Centre Travel Group (ASX:FLT) delivered record transaction volumes in FY26, although the final quarter materially altered the year's profit trajectory. Group TTV increased 4.7% year on year to $25.7 billion, compared with 6.9% growth during the first nine months. Revenue increased 2.5% to $2.9 billion.

The principal divergence was between transaction growth and underlying profitability. Underlying EBITDA increased 3.9% to $466 million, while underlying PBT declined 4% to $278 million from $289 million. The company attributed the difference partly to higher software amortisation, new leisure Lease costs and increased net interest expense, which collectively reduced underlying PBT by about $30 million year on year.

The leisure division absorbed much of the late-year disruption. After tracking towards an underlying PBT of approximately $200 million through the first three quarters, the Business recorded an estimated $60 million profit impact in Q4 as escalating Middle East tensions disrupted travel patterns.

Corporate Profit Growth Offsets Part of Leisure Decline

Corporate travel remained the stronger Earnings contributor during FY26. Corporate TTV increased 2.9% to $12.7 billion and revenue rose 3.3% to $1.2 billion. Underlying EBITDA increased 24.4% to $275 million, while underlying PBT rose 28% to $240 million.

Profit growth therefore exceeded transaction growth, with the corporate UPBT Margin increasing to 1.9% from 1.5%. Corporate Traveller's TTV exceeded $5 billion for the first time, while the US business recorded TTV above US$2 billion.

Currency movements affected reported growth, particularly in the US, where local-currency TTV growth was close to 10%, compared with 4.4% after conversion. The timing of newly secured accounts also limited FY26 trading contribution, with 45% of the $1.6 billion new-account pipeline secured during Q4 expected to begin trading later in FY27.

Leisure Earnings Decline Despite Higher TTV

Leisure TTV increased 7.4% to $12.6 billion, but this growth did not translate into higher earnings. Revenue rose 2.6% to $1.4 billion, while the revenue margin fell to 11.4% from 11.9%.

Underlying EBITDA declined 6.7% to $250 million, and underlying PBT fell 21.7% to $139 million from $177 million. The decline reflected changes in business mix, lower-margin destinations, reduced supplier incentives and the effects of travel disruption during Q4. The division also processed more than $250 million in airfare refunds following the escalation of Middle East tensions.

Digital leisure activity continued to expand, with online TTV increasing 17% to more than $1.8 billion. The Acquisition of Iglu also expands the group's presence in cruise, with cruise TTV expected to exceed $2 billion during FY27.

Statutory Earnings and Shareholder Returns Improve

Despite the decline in underlying PBT, statutory PBT increased marginally by 0.2% to $213 million. Statutory NPAT rose 38% to $149 million, its highest post-COVID level, although the comparison benefited from deferred tax asset write-offs that reduced the FY25 NPAT base.

EPS increased 42.9% to 70.9 cents, exceeding the rate of NPAT growth as share buy-backs reduced the number of shares on issue. Shareholder distributions also increased, with FY26 dividends rising 5% to 42 cents per share.

The company completed its initial $200 million on-market buy-back involving 16.2 million shares and commenced another $200 million program in July 2026. It also issued a $450 million convertible note during FY26 to refinance existing notes, reduce outstanding 2027 convertible notes and partly fund the Iglu acquisition.

Early FY27 Trading Provides Mixed Signals

Early FY27 trading indicates a recovery in leisure activity, with July TTV reaching a record monthly level and exceeding the corresponding pre-pandemic 2019 peak. US sales returned to year-on-year growth in June and July, while UK airfare sales moved above prior-year levels in July.

Corporate TTV trends remained similar to Q4, with constant-currency growth continuing but Middle East exposure still affecting some regional operations. Management expects corporate FY27 profit to be weighted towards the second half, reflecting Investment in expansion, foreign-exchange effects and the timing of recently won accounts beginning to trade.

Conclusion

Flight Centre's FY26 results show a business with record transaction volumes but uneven earnings performance across its divisions. Corporate delivered substantial profit growth, while leisure earnings declined as Q4 disruption, margin pressure and changing travel patterns affected the result. Statutory NPAT and EPS increased significantly, supported partly by the prior-year tax comparison and share buy-backs. Early FY27 leisure indicators have improved, although the group remains exposed to geopolitical disruption, currency movements, interest costs and the timing of corporate account wins. FY27 earnings guidance is scheduled to be provided at the company's November 2026 AGM.