Flight Centre Share Price Lifts Guidance

In its interim results this morning, Australia’s largest retail travel outlet Flight Centre Travel Group Ltd [ASX:FLT] has increased its full year earnings guidance. This was due to an above target first half profit range of $120–135 million.

At time of writing, the $5.6 billion company’s share price is up 10.19% to $55.17 for each slice of the stock.

What are Flight Centre’s figures?

The company highlighted record total transactional figures (TTV) with an $814 million increase on the prior corresponding period of up to $10.16 billion. This is 8.7% above their record FY17 result.

Net margin improvements were slight, yet enough to offset the revenue margin dip which came about due to a product mix change. Flight Centre claims rapid growth in lower revenue margin businesses is the primary driver for this.

Profit before tax is up an impressive 23.2% to $139.4 million.

Flight centre also announced an interim dividend of 0.60 per share (fully franked) which rivals the record dividend declared in the 2016 financial year.

Managing director Graham Turner said:

Generally, we can be pleased with our performance to date, given that we are tracking at or near record levels in most key financial areas.

Turner went on to describe the progress in Flight Centre’s operational strategies and transformational initiatives.

The company has recently completed a new in-store system roll-out, which was two-and-a-half years in the making.

Flight Centre noted its online sales were a pivotal business growth area, achieving 27% in the first half of financial year 2018.

Outlook for Flight Centre

The company’s strong performance has induced it to increase its FY18 guidance. However Flight Centre noted that the accelerated growth rate it achieved this half is unlikely to be maintained. Especially given that if it will be sized up against the prior corresponding period, FY17 second half was a comparatively stronger trading period.

Flight Centre expects further market growth globally as the ‘Golden Era’ of travel continues.

At time of writing the company is up 82% since this time last year.


Ryan Dinse                                                        

Editor, Money Morning


Jack Cameron,                               

Junior Analyst, Money Morning

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Ryan Dinse is an Editor at Money Morning.

He has worked in finance and investing for the past two decades as a financial planner, senior credit analyst, equity trader and fintech entrepreneur.

With an academic background in economics, he believes that the key to making good investments is investing appropriately at each stage of the economic cycle.

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