Good news was mixed in with touches of slightly less great news this morning, as the Flight Centre Travel Group revealed a record TTV for the first half of the 2018/19 financial year, despite a volatile Australian leisure market.
Flight Centre Travel Group (FCTG) announced that parts of its business are moving along nicely, such as its total transaction value (TTV) which jumped by $1 billion over a six month period ending December 2018.
Just in case you missed that, TTV increased by one billion dollars!
The global group’s TTV reached $11.16 billion for the half year, which surpassed the previous 1H record (FY18) by 10 percent.
FCTG’s Underlying Profits Before Tax (PBT) also increased during the period to $140.4 million, sitting within the business’ targeted range for the period ($140 million-$150 million).
Flight Centre attributed the jump in TTV and PBT to its globalisation in the Americas, Europe, Middle East and Africa (EMEA) and Asia markets, which contributed 50 percent of all 1H sales. Australia made up the other 50 percent of sales.
During the six months, the UK market became the group’s third country to surpass $1 billion in 1H TTV, after Australia and the USA. The Americas delivered an 18 percent growth in TTV to almost $2.5 billion, while in Asia, India became the group’s sixth largest company in terms of TTV.
Corporate sales were also acknowledged as having contributed to the six-month success, as it’s now the top-four global travel management company (TMC) with a strong increase of 16 percent in TTV during the period.
Leisure sales, on the other hand, experienced a predicted decline due to “volatile market conditions” that the group expects to remain a challenge throughout the second half of the financial year.
FCTG revealed that some retail stores were able to increase their sales despite the ongoing dip in the leisure market, however, shop closures during the previous financial year meant that leisure TTV growth was flatand and driven by online travel agency business generated by BYOjet and Aunt Betty, as well as sales made through FX business Travel Money, Travel Partners and other divisions.
Managing Director, Graham Turner, said first-half results were evidence that the group’s future is “bright”, especially given that sustainable growth will continue to be delivered through globalisation.
“Just two years ago, this business posted a $6.7 million 1H loss and the outlook for the future looks very bright,” he said.
“There are strong future prospects, given the business’s trajectory, the model’s strength and with its compelling customer offering, which we continue to invest in and enhance.”
Graham Turner, Flight Centre Travel Group Managing Director
Looking ahead, Flight Centre said that it’s tracking towards the bottom of its guidance for the full year (underlying PBT between $390 million and $420 million), which is largely due to the volatility in Australia and within the leisure business.
The group predicted other influences to its full-year profits include lower margins, changes within the business, investments in systems, security and people (such as the new wage model that cost of circa $5 million during 1H), rapid upstaffing and network changes.
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