Flight Centre Travel Group (FCTG) has reported a strong FY23 result, underpinned by a more than two fold increase in total sales, with its leisure and corporate arms delivering more than $10 billion each in annual total transaction value (TTV) for the first time.
With a 112 per cent year on year rise in TTV to $22 billion (FY22 $10.3 billion), the increase marked FCTG’s second strongest ever result behind FY19 ($23.7 billion).
Representing a 265 per cent y-o-y increase in profit, FCTG recorded an underlying (EBITDA) profit for the year ending 30 June 2023 of $301.6 million.
This reveals an almost $485 million recovery from FY22’s $183.1 million loss.
In a statement to the ASX, FCTG put the results down to “efficiency gains” which led to a better profit margin and “solid cash generation and cash flow” to fund business investment.
Predictably, the strong FY23 results came mostly on the back of a solid second half of the year, with almost 70 per cent of profit created during the six months to 30 June.
The 2H results reflect the re-opening of unrestricted travel almost everywhere, airline capacity growth, and normal seasonality (key booking periods are typically during the six months to June 30).
Exceeding expectations
FCTG CEO Graham ‘Skroo’ Turner said, “after an incredibly challenging period, we are pleased to report material profit and sales uplifts in improved conditions during FY23”.
“Our $485 million profit turnaround exceeded our initial expectations as our diverse global business benefitted from the removal of unprecedented restrictions that were imposed on travellers for some two-and-a-half years and from the strategies that we implemented to preserve our key assets and ensure we re-emerged in a position of strength,” he added.
“Sales more than doubled group-wide, as our leisure and corporate divisions both delivered more than $10 billion in annual TTV for the first time.
“Corporate TTV reached $11 billion, comfortably surpassing the previous record and broader sector recovery, as our business consolidated its position as a global industry leader with a compelling customer offering across two key brands – FCM and Corporate Traveller.
“Our transformed leisure business is also on a steep TTV recovery trajectory, with several businesses, including online and the independent agency network, delivering record sales.
“Group-wide, we have successfully executed our key strategies, which has led to ongoing cost discipline, strong productivity and efficiency gains underlined by higher revenue margin and record-low cost margin.”
Bright future
Turner also forecast a strong period of further growth for FCTG in the current year.
“Looking ahead to FY24, we are well placed to capitalise on opportunities that will arise as industry recovery continues,” he stated.
“Already, we have seen further solid TTV and profit growth in early trading in a resilient travel market that seems to be holding up reasonably well compared to other sectors.”
