Flight Centre Travel Group (FLT) has achieved a remarkable $320 million underlying profit before tax (PBT) for the 2023/24 financial year (FY24), underpinned by a record yearly total transaction value (TTV) of $23.74 billion.
The underlying profit result marks a whopping 131% increase from the $139 million recorded in FY23 and is in line with its updated profit guidance for the year.
The company’s statutory PBT meanwhile, surged by 212% to $220 million, up from $70 million in the previous year, despite a $10.7 million loss in Australia due to airline Rex entering administration. After tax, FLT’s profit increased by 111% to $230 million.
The corporate business, which grew by 10% to a record $12.1 billion in TTV, saw a 44% increase in underlying PBT, while the leisure division recorded a 104% rise in underlying PBT to $188 million, its strongest result since FY14.
Record TTV
FLT’s highest-ever TTV slightly surpassed the $23.7 billion achieved in FY19, representing a $1.8 billion year-over-year increase. Both the leisure and corporate divisions contributed over $1 billion each to this growth.
And overall TTV growth could have been higher still had it not been dampened by factors such as significant airfare deflation, business closures and a sluggish global corporate sector in the latter half of the year, according to FLT.
Despite these challenges, Flight Centre Travel Group’s revenue grew by 19%, outpacing TTV growth and improving revenue margin to 11.4% from 10.4% in FY23. The underlying profit margin (UPM) also improved to 1.35%, up from 0.63% in the previous year, as the company continues its efforts to reach a group-wide 2% UPM target.
The leisure and corporate divisions both saw strong performances, with UPMs exceeding 2% in the latter half of the year. This contributed to FLT’s overall improved trading performance, reflected in a record $421 million operating cash inflow. Consequently, Flight Centre undertook nearly $450 million in capital management initiatives, including reducing bank debt.
Key drivers behind FLT’s profit recovery include higher TTV, improved productivity, strategic revenue initiatives and ongoing cost discipline.
Optimistic outlook
Looking ahead, FLT plans to continue investing in its people, brand network and systems, with capital expenditure expected to reach $100 million in FY25.
The company says it is also well-positioned to capitalise on the travel industry’s expected return to normal growth levels, supported by its strong balance sheet, strategic execution and solid momentum from early FY25 trading.
FLT Managing Director Graham Turner highlighted the company’s and industry’s growth amid global uncertainty, showcasing their resilience and strength.
“We recorded circa $1.8 billion YOY TTV growth and surpassed our record FY19 result – with a substantially leaner workforce and a structurally lower cost base, highlighting the strong productivity gains we have delivered in both leisure and corporate travel,” he said.
“Our YOY growth was also achieved in a deflationary airfare environment, which saw average international economy airfares decrease by 6% globally and by 13% in Australia during the 2H.
“While this long-awaited deflation will impact short-term TTV growth rates, we view it as extremely positive given it makes travel more affordable for families in particular and is likely to drive volume growth into FY25.”
Turner also flagged the company’s “foundations for the future”, boosted by investments in key growth drivers, including in its “people – staff retention has improved and FLT was recognised as a Great Place To Work in 25 countries during FY24, diversified network of established, emerging and start-up businesses, and technology and systems to enhance productivity and the customer experience”.
“Looking ahead, we continue to focus on profitable growth and our target of returning to a 2% UPM for the first time since FY15,” he added.
“We see a clear path to 2% and aspire to achieve it during FY25 although it remains a stretch target within this timeframe.”
In July, around 2,500 of Flight Centre Travel Group’s top performers worldwide along with support staff, suppliers and partners travelled to Lisbon for FCTG’s annual Global Gathering 2024 for three days of sun, sangria and fun plus some formal awards and a conference following EOFY events in Australia and the UK. Read our wrap.
