Image source: © Tktktk | Megapixl.com

Highlights

  • In FY24, Flight Centre achieved an 8.2% growth in TTV, reaching AUD 23.74 billion, and saw a 111.4% increase in underlying profit after tax.
  • Despite a strong start, Flight Centre warns of unpredictable trading patterns in FY25, as global corporate sector activity remains flat.
  • The company plans to open 35 new leisure travel shops and invest in Travel Money, Envoyage, and FCM to drive growth.

Flight Centre (ASX:FLT) is one of the largest  travel retailers and corporate travel managers in Australia, operating four divisions in four regions globally. In the financial year 2024 (FY24), the company generated record AUD 421 million in operating cash inflow and invested over AUD 500 million in capital management initiatives.

However, on 18 October 2024, FLT’s shares took a sharp dip, closing over 20% lower, as the company expressed uncertainty over the year ahead. In the FY25 trading update, the company mentioned that it is trading above its 1QFY24 levels in terms of profit margin, TTV, and underlying profit; however, the company warned that it is too early to predict full-year trading patterns. Further, the company noted that similar trends were observed in the early months of FY25 to late months of FY24 with certain inconsistency month-on-month.  

In the first quarter of FY25, global corporate sector activity was flat and FLT’s wins underpinned the TTV growth, despite airfare deflation challenges. The company is entering a busier trading period and expects normal industry growth with focus on future investment opportunities and profit margin.

Noteworthy performance of FLT in FY24

In FY24, the company recorded 8.2% YoY growth in group TTV to AUD 23,744.5 million with 18.9% YoY rise in revenue to AUD 2,710.7 million and 111.4% YoY increase in the underlying profit after tax to AUD 229.6 million. Underlying PAT growth was driven by a 104% YoY increase in the leisure segment's underlying PBT and a 44% YoY increase in the corporate segment's PBT. Furthermore, the year saw record operating cash inflow of AUD 421 million.  

Outlook

In FY25, the company targets 2% underlying profit margin target and opening of nearly 35 new leisure travel shops globally.

The company has identified that Travel Money, its foreign exchange business, along with Envoyage and FCM, are critical future growth drivers and intends to leverage these opportunities through continuous investment.

Its focus also includes investment in long-term growth drivers to improve customer experience and productivity and expanding sales network across offline and online channels.

In FY25, the travel industry is expected to return to normal growth levels of 4-5% worldwide.

Share performance of FLT

FLT shares closed 1.32% lower at AUD 15.68 apiece on 28 October 2024 with a market cap of AUD 3.52 billion, trading near its 52-week low of AUD 15.860, recorded on 24 October 2024. While 52-week high of FLT is AUD 23.060, recorded on 23 July 2024.

Over the part one year, FLT’s share price has dropped by almost 13.75%, and in one month, it has declined by around 28.56%.

FLT Daily Technical Chart, Source: EODHD/Others

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 28 October 2024. The reference data in this report has been partly sourced from EODHD/Others.