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Flight Centre Travel Group Ltd (ASX:FLT) is experiencing a notable surge in its share price, which has climbed nearly 4% to AU$20.06 on Wednesday. This upward trend follows the release of the company's impressive financial results for the fiscal year 2024.
For the year ended June 30, 2024, Flight Centre achieved a record total transaction value (TTV) of AU$23,744 million, marking an 8% increase from the previous year. This growth was driven by strong performances in both its leisure and corporate travel sectors, each contributing over AU$1 billion in growth year on year.
The company's operating revenue saw a significant rise of 19%, reaching AU$2,711 million. This was supported by a 100 basis points increase in the revenue margin to 11.4%, due to stabilizing supplier margins and strategic initiatives aimed at diversifying revenue streams, boosting ancillary sales, and expanding the product mix.
Flight Centre's underlying EBITDA surged by 58% to AU$478 million, and its underlying profit before tax saw an impressive increase of 130%, climbing to AU$320 million. This performance met the company's guidance range and represents a substantial improvement from the AU$139 million recorded in FY 2023.
In light of this strong profit growth, the Flight Centre board has declared a fully franked final dividend of 30 cents per share, bringing the total dividends for FY 2024 to 40 cents per share. This marks a remarkable 122% increase from the previous year.
Managing Director Graham Turner expressed satisfaction with the company's performance, noting the resilience of both the business and the travel sector amidst uncertain macro-economic and geopolitical conditions. Turner highlighted the company's ability to achieve approximately AU$1.8 billion in year-on-year TTV growth while operating with a leaner workforce and a lower cost base. He also pointed out that despite a global decrease in international economy airfares, which saw average fares drop by 6% globally and 13% in Australia during the second half of the year, the deflationary environment is expected to drive volume growth in FY 2025.
Looking ahead, Flight Centre's management believes the company is well-positioned to capitalize on opportunities in a normal growth market during FY 2025, supported by its strong brand network, solid balance sheet, and improving margin profile. Australian international ticket sales increased by 18% in July, with average economy fares decreasing by 5% compared to July 2023.
Specific guidance for FY 2025 will be provided at the company’s annual general meeting in November.
