Flight Centre lifts earnings guidance as corporate business outperforms

Flight Centre lifts earnings guidance as corporate business outperforms

Photo: Travel Associates, a Flight Centre brand (via Facebook). The group has been investing further into its luxury offerings. 

Brisbane-headquartered travel agency group Flight Centre (ASX: FLT) has increased the midpoint of its underlying earnings guidance for FY23 by 7 per cent, after its global corporate business continued to "outperform" expectations while its leisure segment saw "strong and consistent" recovery in the June half.

The group forecasts underlying EBITDA within a range of $295-305 million, representing a $25 million lift for the lower end and $15 million if the maximum is reached.

Total transaction value (TTV) of $22 billion is expected for the period - an almost 115 per cent jump on the prior year.

Corporate TTV is now on par with the leisure category at $11 billion, signifying 20 per cent growth on the previous record of $8.9 billion for the corporate business.

"Overall, we are pleased with our continued recovery as demand has generally rebounded solidly across both our leisure and corporate travel businesses," says Flight Centre managing director Graham Turner.

"In corporate, we have delivered record TTV while investing significantly for the future by securing large volumes of new accounts, expanding our sales force and introducing innovative new platforms and products for our customers, which should lead to stronger returns in the years ahead.

"In leisure, we are emerging from the pandemic as a more productive, more efficient and more diverse business with a strong brand stable, enhanced capability and efficient and productive models that are now starting to achieve scale benefits."

Turner, who co-founded Flight Centre in 1982 with Geoff Harris with a store in Sydney, highlights the group invested in its luxury collection over the past year with the $211 million purchase of luxury tour operator Scott Dunn and luxury travel business-to-business (B2B) event brand Luxperience for an undisclosed sum.

"Looking ahead, our expectations are that leisure travellers will continue to prioritise holidays and experiences over other areas of discretionary spending, as we have seen in the past and as evidenced by the consistent year-on-year growth in outbound travel in large and important markets like Australia," he says.

"In corporate, we expect that the large volume of new business that we continue to win – both from competitors and accounts that were previously unmanaged – will offset the impact on TTV flowing from lower-than-normal client spend."

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