1. 82.0k
    Posts

    FLIGHT CENTRE TRAVEL GROUP PERFORMING IN LINE WITH EXPECTATIONS BUT
    MONITORING CORONAVIRUS IMPACTS ON EARLY SECOND HALF TRADING

    Key Points
     Underlying first half (1H) profit before tax (PBT) likely to be slightly above
    the mid-point of guidance ($90million-$110million) for the period
     Record sales – circa 11% total transaction value (TTV) growth in
    challenging global trading conditions – pointing to market-share gains
     Coronavirus affecting early 2H travel patterns, particularly in Asia – too
    early to judge full year impact but will make it more difficult to achieve 2020
    fiscal year (FY20) guidance
     As announced previously, statutory 1H PBT will be lower than underlying
    1H result and will include adjustments for Topdeck impairment (confirmed
    today), supplier collapse, Upside investment, accounting standard changes

    THE Flight Centre Travel Group (FLT) today updated the market in relation to its 1H results and its
    FY20 outlook.
    The update comes as the company continues to monitor the coronavirus’s impacts on its Greater
    China and Singapore corporate travel businesses in the near-term and its potential impacts on
    broader leisure and corporate travel patterns in the upcoming months, which are traditionally the
    year’s peak booking periods.
    Although FLT has achieved record TTV and an underlying PBT slightly above the mid-point of its
    targeted range for the six months to December 31 2020 ($90million-$110million), the virus’s
    emergence has inevitably made it more difficult to deliver the strong 2H earnings weighting implied
    in full year guidance ($310million-$350million).
    Coronavirus Impact Being Felt in Asia
    Managing director Graham Turner said, while it was too early to predict the virus’s overall impact, it
    had already adversely affected FLT’s small corporate travel operations in China, Singapore and
    Malaysia, which together generated about $625million in TTV during FY19 (about 2.5% of group
    TTV).
    Key Points
     Underlying first half (1H) profit before tax (PBT) likely to be slightly above
    the mid-point of guidance ($90million-$110million) for the period
     Record sales – circa 11% total transaction value (TTV) growth in
    challenging global trading conditions – pointing to market-share gains
     Coronavirus affecting early 2H travel patterns, particularly in Asia – too
    early to judge full year impact but will make it more difficult to achieve 2020
    fiscal year (FY20) guidance
     As announced previously, statutory 1H PBT will be lower than underlying
    1H result and will include adjustments for Topdeck impairment (confirmed
    today), supplier collapse, Upside investment, accounting standard changes
    Flight Centre Travel Group Limited ABN 25 003 377 188
    275 Grey Street, South Brisbane QLD 4101 AUSTRALIA
    He said other areas that could be affected in the upcoming months included:
     Corporate travel: A number of companies across all geographic regions have amended
    their travel policies to prevent travel to China and, in some cases, other countries in the
    near-term
     Leisure travel: While the virus has largely been contained within China to date and has not
    yet significantly affected demand for travel to other countries, travellers could potentially
    alter travel plans in the coming months if larger scale outbreaks were detected elsewhere in
    the world; and
     Cross Hotels and Resorts: FLT does not manage any properties in China, but Chinese
    outbound travellers are a key target market for the company’s hotel management business.
    Cross manages 24 properties in Thailand, Bali and Vietnam
    “It is impossible to predict the virus’s impact on our business or on leisure and corporate travel in
    general at this early stage, but it will impact travel patterns to some degree in the near-term,” he
    said.
    “To date, the impact has largely been felt in our Greater China corporate travel businesses, given
    that business activity and the country’s inbound and outbound travel sectors have temporarily shut
    down as part of the focus on containing the virus.
    “Within this challenging environment, we are taking steps to ensure we can meet our customers’
    needs while also minimising the impact on the business on Mainland China and in Hong Kong by
    encouraging our people to take leave over the next few weeks, while the outlook remains
    uncertain.
    “By preserving our workforce in China during this uncertain period and carefully managing our cost
    base, we will be well placed to capitalise on any rebound in the travel sector when the situation
    improves.”
    FLT will release 1H accounts on February 27, 2020 and will continue to monitor developments.
    1H Trading Update
    In relation to 1H trading, the company expects to report an underlying PBT between $100million
    and $105million for the six months to December 31, 2019, slightly above the mid-point of its
    targeted range for the period.
    FLT will also report strong 1H sales, with TTV increasing 11.1% globally to a record $12.4billion
    and surpassing previous TTV milestones in all geographic segments (Australia/New Zealand,
    Americas, Europe, Middle East and Africa and Asia).
    Flight Centre Travel Group Limited ABN 25 003 377 188
    275 Grey Street, South Brisbane QLD 4101 AUSTRALIA
    This TTV growth rate is the company’s strongest 1H trajectory since FY16 and is comfortably
    above FLT’s longer term target of 7% annual TTV growth.
    In superior trading conditions during the previous corresponding period, FLT achieved a
    $140.4million underlying PBT and delivered $11.16billion in TTV, which was the previous record
    for the period.
    As outlined at FLT’s AGM, FY20 1H results have been adversely impacted by various world events
    that have affected global travel patterns and contributed to the high profile collapse of Thomas
    Cook and several smaller operators.
    These events have included Brexit, trade wars, unrest in Hong Kong, a safety-related downturn in
    travel to the Dominican Republic, a key market for the US leisure business, and a relatively
    subdued consumer environment in Australia.
    Adjustments to Underlying 1H PBT
    As announced previously, FLT’s underlying 1H PBT will exceed the company’s statutory result for
    the period.
    Adjustments to underlying PBT will include:
     A $46.4million impairment charge relating to the London-based Topdeck Touring Business,
    which has under-performed recently. This non-cash adjustment, which was confirmed
    today, relates to goodwill, brand names and other intangibles
     About $7million in non-recurring costs associated with FLT’s voluntary decision to
    reaccommodate customers who would otherwise have lost their money as a result of the
    collapse of wholesalers Tempo and Bentours in Australia and New Zealand
     Development costs associated with the company’s investment in Upside, a US-based SME
    corporate business with a strong technology offering that FLT will incorporate into its
    Corporate Traveller brand in the Northern Hemisphere. The majority of these costs, which
    amounted to $5.4million during the 1H, would be capitalised if FLT controlled the business
     A $3.1million non-cash accounting adjustment (loss) to reflect changes in the fair value of
    the company’s initial investment in the Ignite business, which FLT took 100% ownership of
    during the 1H; and
     A non-cash accounting adjustment (loss) in the order of $2million brought about by FLT’s
    transition to the new AASB16 leasing standard

    courtesy of Bell Direct
    =================================================================================

    ( DYOR )

    i do not hold this share ( but probably have exposure via ETFs and LICs )

  2. 21
    Posts

    Where are you planning to go on your trip?

  3. 30
    Posts

    I plan to go to places known for music, especially guitar music. My dream scenario: a rural area that reminds me of my roots, a town where I can practice music with a teacher or jam with locals during the day and listen to live music at night. Ideally, but not necessarily, it should be music with deep cultural roots that help define a region or group of people. For example, I would recommend a guitar-loving visitor to the U.S.this siteor to check out the 6th Street Stage in Austin, Music Row in Nashville, Memphis, New Orleans, and the Mississippi Delta Blues Trail. I learned that great music could be heard in cities all over the United States. Still, these places stand out because they offer iconic music important to understanding Americans and American culture.

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