Flight Centre Travel Group (FLT) has released its results for the first half of the financial year (1H FY23), reporting a total $95.08 million profit before tax.
The underlying EBITDA (underlying earnings before interest, tax, depreciation and amortisation) result reflects a 152 per cent improvement on the $184.1 million loss on the previous corresponding period (pcp) of 1H FY22.
The result was also 19 per cent above the expected underlying earnings of $70-90 million.
In the six months to 31 December 2022, EBITDA (after expenses) was $76.95 million, which was also a massive 141 per cent improvement on FLT’s $190.02 million loss from the pcp.
The group experienced a similar turnaround on its underlying profit before tax (PBT), which saw it break even during 1H FY23 after a $270.17 million loss in the pcp.
Total Transaction value (TTV) for the period was $9.89 billion, which was a 203 per cent increase on the pcp of $3.26 billion, while total revenue was a shade over $1 billion, a 217.3 per cent increase on the $315.71 million result for the pcp.
In its leisure division, TTV reached $4.4 billion, which represented 44 per cent of the group’s total transactions and solid growth over its contribution in the pcp of 25 per cent.
According to Flight Centre, its online businesses added a record $770 million to 1H leisure.
All geographic segments experienced profits, except for Asia which broke even during the 1H.
$280m full-year profit forecast
FCTG CEO Graham Turner said the results represented a “solid start to FY23 in an improved, but not fully recovered, trading environment”.
“The sales momentum that helped drive our recovery last year continued throughout the 1H, with TTV and revenue both tripling compared to the PCP,” Turner said.
“Positive margin trends have also emerged, with underlying cost margin dipping below 10% to a record low and revenue margin gradually ticking upwards, in line with our expectations.
“In both leisure and corporate, we are achieving our strategic objectives and laying foundations for more meaningful profit recovery in the future.
“Looking ahead, we expect further 2H recovery and we continue to target underlying EBITDA between $250 million and $280 million for the full year.”
Corporate records
Across its corporate division, Flight Centre experienced a record 1H TTV of $5 billion, which puts it on track to topple the previous record full-year amount of $8.9 billion it generated in FY19.
“Our corporate business is trading at record TTV levels – ahead of industry growth rates – and winning large volumes of new accounts because of its compelling FCM and Corporate Traveller customer offerings,” Turner stated.
The FLT boss added that the group was not “currently seeing evidence that the recovery is slowing with the leisure business currently trading at post-COVID highs and corporate travel activity escalating after the traditional holiday period”.
“This underlines both the significant pent-up demand that still exists for travel in this early recovery phase and the sector’s proven resilience,” he said.
“While travel is a discretionary purchase, customers typically view it as essential and prioritise it above other discretionary items, which is one of the reasons why the market typically grows year-on-year and why prolonged downturns in the sector are relatively rare.”
In early February, FCTG announced plans to buy UK luxury travel company Scott Dunn to further its footprint in the high-end travel market.
