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Highlights:
- Flight Centre has witnessed high demand in both corporate and leisure travel segments recently.
- The company’s business has bounced back significantly in the last couple of months.
- Flight Centre shares were trading more than 4% stronger on the ASX at 10:54 AM AEST.
Australian travel retailer Flight Centre Travel Group Limited (ASX:FLT) shared revised FY22 guidance on the ASX today, followed by a strong demand in the travel sector worldwide by the end of this year.
As per the updated financial guidance of FY22, the company is now expecting to deliver a record underlying EBITDA loss between AU$180-AU$190 million in FY22 (ended on 30 June 2022)
Meanwhile, Flight Centre began trading in the green zone on Monday morning. The shares were up by 4.617% to AU$17.9 per share at 10:54 AM AEST on the ASX today (25 July)
Details of Flight Centre’s updated FY22 guidance:
Recently the tourism sector has witnessed an improvement in the business due to several factors. The primary factor is the lifting up of COVID-19 lockdown and opening up of borders.
In case of Flight Centre, the mid-point of their EBITDA range (AU$185 million) represents:
- An improvement by 11.9% in EBITDA loss in FY22 compared to its initial FY22 guidance.
- A material improvement of Flight Centre’s underlying EBITDA loss by AU$337.9 million in FY21.
Furthermore, Flight Centre is now expecting to break even (underlying EBITDA basis) for the six months to June 30, 2022. This period represents a major turnaround after significant losses in February 2022.
The company believes that the global demand for travel and tourism was boosted as the fear of Omicron subsided, and the government globally relaxed or removed the restrictions that had initially impacted the travel sector too much.
Due to this high demand in the travel industry, Flight Centre’s total transaction value (TTV) went up to AU$10 billion in FY22. This time, the TTV was more than double compared to AU$3.95 billion in FY21.
Flight Centre is expected to release its fully audited FY22 results on 25 August 2022.
Image source: © Lovelyday12 | Megapixl.com
What did Flight Centre’s management say?
Graham Turner, Managing Director, Flight Centre, mentioned that the company has finally achieved its aim to return to monthly underlying EBITDA profitability in both its corporate and leisure travel segments after ‘an incredibly challenging period’.
Turner also added that the company exceeded its expected recovery rate and is likely to exceed the initial FY22 guidance.
Share price overview of Flight Centre on the ASX:
In last one year, Flight Centre’s shares have performed well on the ASX and have gained almost by 26% on the ASX. However, FLT’s year-to-date share price has declined by 2.69% (as of 11:12 AM AEST on the ASX today, 25 July).
