Join our daily newsletter At The Bell to receive exclusive market insights
- Flight Centre (FLT) improves its operational performance as the company prepares for strong demand as border restrictions ease
- With increased concerns over the COVID-19 Omicron strain in the first half year, the company managed to see strong sales growth with total transactional value (TTV) growing 113 per cent to $3.3 billion
- However, underlying EBITDA losses increased to $184 million from $156 million, which the company attributes to receiving $64.7 million less in government subsidies
- Flight Centre aims to close in on its break-even target by the end of the financial year, with a full recovery expected by FY24
- Shares are trading 6.36 per cent lower at $18.85 each
Travel retailer Flight Centre (FLT) has improved its operational performance as the company prepares to see strong demand as border restrictions ease.
In a first half period ending December 31 marked by increased concerns over the COVID-19 Omicron strain, the company managed to secure strong sales growth, with total transactional value (TTV) growing 113 per cent to $3.3 billion.
November saw a record TTV within the COVID-19 period of $859 million.
FLT’s corporate business was the major contributor to group TTV, giving rise to about 60 per cent of sales during the half.
The company’s South Africa and United Arab Emirates arms of business were profitable during the period, while the Europe, Middle East, Africa geographic segment was close to breaking even.
Revenue almost doubled from the previous corresponding period, coming in at $316 million.
Despite these positive metrics, underlying EBITDA losses increased to $184 million from $156 million.
The company attributes the increased losses to the removal of government support, which it believes masks significant operational performance improvement.
Flight Centre retained $64.7 million less in government subsidies to $14.5 million.
Expenses came in at $634 million for the period, with costs expected to grow as it increases staffing levels and marketing activity.
Flight Centre said it has maintained a healthy balance sheet and had a $1.5 billion global cash and investment portfolio at December 31, 2021. Liquidity topped $1billion, after allowing for a complete unwind of working capital and client cash.
Looking ahead, the company is confident over easing travel restrictions and Omicron concerns.
“After two years of lockdowns and heavy restrictions, we are now seeing the strongest
indicators of a return to normalcy. Borders are now generally open and some governments,
particularly in Europe, are starting to treat the virus as endemic,” Managing Director Graham Turner said.
“Changes are happening at pace – we are seeing positive new developments relating to
travel every day.”
The announcement of the West Australian border reopening last week reportedly saw a 200 per cent increase in flight searches to and from WA.
The company aims to close in on its break-even target by the end of the financial year, with a full recovery expected by FY24.
While the company said there is still uncertainty over future COVID-19 strains as well as current tensions in Ukraine, it expects significant pent-up demand for travel.
Shares were trading 6.36 per cent lower at $18.85 each at 12:59 pm AEDT.
