The news: Flight Centre Group met consensus forecasts after tripling its profit in fiscal 2024.
The news: The travel agency reported profit before tax (PBT) of $320.4 million, up from $106.2 million in FY23 and 1.2% above consensus estimates, hitting the midpoint of its reduced guidance range of $316 million to $324 million.
Total transaction volume (TTV) increased 8.2% year-on-year to $23.7 billion, surpassing its peak in fiscal 2019. Total revenue increased 20.9% to $2.8 billion, while underlying EBITDA increased 58.6% to $478.5 million.
Flight Centre announced a total dividend of 40 cents per share, up from 18 cents a year earlier.
The company expects capital expenditures of $100 million in fiscal 2025, with about 75 percent going to technology and systems. The company also plans to open about 35 new travel agencies worldwide, including 18 Travel Money branches.
The Group expects the travel industry to return to normal growth levels of four to five percent next year and reiterated its PBT margin target of two percent.
The context: Flight Centre said that despite the record level of TTV, the growth rate was negatively impacted by “significant” deflation in airfares, business closures and a flat trading climate in the global corporate sector towards the end of the year.
The company noted that cost-of-living pressures had limited spending on leisure activities, but the travel business had generally performed better than other sectors.
What they said: RBC Capital Markets analyst Wei-Weng Chen described the results as “chaotic and unnecessarily convoluted,” with headline numbers apparently below average forecasts due to the company’s accounting methodology.
“Although the result was ultimately in line, in our view, given Flight Centre’s chosen reporting methodology, there is a risk that the stock could be quantitatively sold today due to an EBITDA miss,” he said.
Graham Turner, Managing Director of Flight Centre, said: “In an uncertain macroeconomic and geopolitical climate, our business and the wider industry have continued to grow – once again underlining the resilience of the sector and our strength as a diversified global travel company.”
