Are Investors Having A Re-look At FLT And PMV?

  • Apr 13, 2019 AEST
  • Team Kalkine
Are Investors Having A Re-look At FLT And PMV?

Travel Agency and Investment Management Companies are some of the hot sectors in today’s scenario. The increasing population and urbanization have shifted the focus of young generation’s spending towards travelling and hospitality along with a shift in savings from conventional bank FDs to new asset classes and new ventures. Two important stocks under these sectors are Flight Centre Travel Group Limited (ASX: FLT) and Premier Investments Limited (ASX: PMV). Let’s see how these stocks performed as per their recent reports.

Flight Centre Travel Group Limited (ASX: FLT)

Flight Centre Travel Group Limited (ASX: FLT) is one of the well-known travel agency with operations in 23 countries and travel management network in more than 90 countries. It has around 2,800 businesses and employs more than 19,000 personnel globally.

The company recently announced the release of 3,134 new issues at $43.54 per share. These shares were issued under the terms of the Flight Centre Travel Group Limited, Employee Share Plan for the March 2019 contribution shares.

In its half-yearly result, the company reported an increase in total transaction value (TTV) by ~10% to $11.16 billion in H1 FY19 as compared to $10.15 billion in H1 FY18. This was driven by the company’s diversified and globalisation success stories, where corporate businesses in Australia and overseas were driving growth. Americas has now become the earnings powerhouse. Revenue margin (% of TTV) decreased in H1 FY19 as compared to H1 FY18, due to disappointing results from Australian leisure business, where new short-term strategies were implemented to improve the second half of FY2019. Group’s underlying profit before tax increased by 0.7% to $140.4 million in H1 FY19 as compared to $139.4 in H1 FY18.

The Board of Directors declared $211 million a fully franked dividend to be paid via $1.49 per share as a special dividend and 60 cents per share as an interim dividend, with the payment date on April 12, 2019, and register date on March 22, 2019.

As per company’s FY19 guidance, FLT expects underlying PBT to be in the lower of the range between $390 million to $420 million for the full year due to the volatility experienced in Australia and within the leisure business in the first half of the year. This volatility is expected to continue in the second half of the year as market conditions, especially for the leisure businesses will remain challenging.

On the stock information front, at market close on 12th April 2019, the stock of Flight Centre was traded at $43.12, with a market capitalisation of ~$4.34 billion.

Premier Investments Limited (ASX: PMV)

Premier Investments Limited (ASX: PMV) is an investment vehicle with engagement in the acquisition of shareholdings in some good Australian companies with a focus on retailing, importing and distribution to maximise the returns of its shareholders.

The company recently announced a change in its shareholding, where voting power of Airlie Funds Management Pty Ltd on its behalf and on behalf of Magellan Financial Group Limited and its related bodies, increased from 5.12% to 6.5%.

In its half-yearly results, the group reported an increase in its (Premier Retail) sales by 8% pcp to $680.2 million. This was driven by strong sales in Apparel brands by 7.5% as compared to the previous period. The online sales increased by 35.2% pcp to $75.7 million and contributed 12.9% to the market sales in H1 FY19. Global sales for Smiggle’s was reported at $178.8 million in H1 FY19. Peter Alexander sales was reported at $130.4 million in H1 FY19, and its strategic plan for 2020 includes delivering in excess of $250 million in annual sales by FY20. The company has opened 26 new stores in the past 18 months and remains ahead of its plans to open 40 stores in FY18 and FY20. The company is expected to open four new stores in H2 FY19.

Premier Investments’ NPAT was reported at $88.8 million, up by 13% pcp. The Board of Directors declared a fully franked interim ordinary dividend of 33 cps with a payment date on June 14, 2019, and record date on May 31, 2019.

On the stock information front, at market close on 12th April 2019, the stock of Premier Investments was trading at $16.120, with a market capitalisation of $2.52 billion.


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