Flight Centre shares slips as its reveals more haircuts, retreats from revenue claims

Punters headed for the exit door at Flight Centre after it quietly a slipped a record revenue projection down the memory hole and relegated looming profit hits to the back page.

In a stock exchange announcement where sour stuff was well sweetened, the Brisbane-based travel agent said its total transaction value had increased by about $1.7 billion to around $23.7 billion in 2023-24

After Flight Centre boasted this figure was in line with the group’s “record” trading recorded in 2018-19, chief executive Graham Turner said the group was doing it with one-third less workers and an expanding independent network.

“This underlines the positive return we have started to see on the investments made during the pandemic to create a more productive and efficient business,” Mr Turner said.

But its ASX announcement, filed before the stock exchange opened Wednesday, did not refer to Flight Centre’s projection in May that its total transaction value for 2023-24 was “expected to surpass” $23.7 billion.

And while proclaiming its self-styled measure “underlying profit before tax” would still be comfortably above $300 million, Flight Centre saved news of a net $82m to $95m in profit hits for a table at the end of the three-page disclosure.

New hits included a $45m to 49m haircut on restructuring its StudentUniverse business and a total of $29m to $33m in trading losses and closures costs for its Discova Americas and its GoGo US wholesale operations.

Traders were quick to see the bad news, with the shares plunging more than six per cent in early trading before recovering marginally finish 4.2 per cent, or 97¢, down at $22.02.

Like many sharemarket-listed companies, Flight Centre prefers to focus on internally-designed measures that are distinctly different from statutory revenue and earnings figures.

Being a travel agent where it generally collects commissions on sales, it argues that total transaction value is a far more relevant measure of performance that conventional revenue.

It says its underlying profit figures, adjusted to exclude the impact of various non-recurring items, provides a “truer reflection of the business’s underlying performance and profit figures”.

Flight Centre reported a $120 million statutory profit for the six months to December 31 on total revenue of $1.29b. Using its in-house figures, it reported total transaction value of $11.3b and a $106m underlying profit before tax.

It forecast a big surge in underlying profit before tax for the second half and a result in the range of $300m to $340m.

It narrowed that figure to $316m to $324m in Wednesday’s announcement.

While airfares in Australia had fallen 13 per cent in the June half, the airline had managed to increase ticket volumes 10 per cent.

A Flight Centre spokesman said said Wednesday announcement was to narrow the earnings guidance range and provide an “update on the one-offs before the reporting season”.

The company had previously foreshadowed all its one-off hits except Student Universe and Discova.

“There is certainly no intention to hide anything,’ the spokesman said.