Flight Centre Travel Group records strong first half result
The Flight Centre Travel Group (FLT) has updated its 2019 fiscal year (FY19) guidance after recording the strongest 1H growth rate since FY16.
Key Highlights
Record First Half (1H) Total Transaction Value (TTV) of $12.4billion:
- Surpassed prior-year milestone by 11.2% - strongest 1H growth rate since FY16
- Record TTV in all geographic segments & in both leisure & corporate sectors despite challenging trading cycle – market-share growth
$102.7million underlying profit before tax (PBT), $38.8million statutory PBT:
- Underlying result in line with guidance, but below $140.4million underlying PBT achieved in superior trading conditions during FY19 1H
- Lower statutory PBT after $63.9million in accounting adjustments/non-recurring charges
Continued out-performance in global corporate travel sector:
- 17% TTV growth, with record pipeline of account wins (including five-year $US1billion contract)
- Further strong growth in Americas – TTV up 24% & now FLT’s largest corporate business
Emerging/lower-cost channels fuelling 6.5% leisure TTV growth:
- Leisure e-commerce TTV up 46.5% to $880million during 1H
Coronavirus (Covid-19) impacting 2H results:
- Inbound & outbound travel shutdown initially affecting FLT’s Greater China corporate businesses
- Corporate clients globally also amending travel policies to prevent travel to China & other locations in short-term – impacting FLT’s corporate businesses throughout the world
- Leisure demand softening as some customers review/reconsider future travel plans
FY20 guidance amended in light of evolving Covid-19 situation:
- Currently expecting significant 2H earnings impact, but with the possibility of rapid FY21 rebound (based on SARS experience)
- Now targeting $240million-$300million underlying FY20 PBT (previously $310million-$350million), but virus means outlook remains uncertain