The Flight Centre Group Ltd (ASX: FLT) share price is pressing higher on Thursday. This positive move follows the release of the travel agent's full-year results for FY21 this morning.
At the time of writing, shares in the travel company are up 3.91% to $16.99. Despite the COVID-19 pandemic clearly disrupting its operations, investors are buying up shares. This might suggest the market is willing to look beyond current circumstances for travel-exposed companies.
In a similar fashion, Qantas is rallying today after unveiling a monstrous $2.3 billion loss for FY21.
Let's take a closer look at Flight Centre specifically.
What's happening with the Flight Centre share price?
Perhaps borrowing a page out of Virgin Australia's latest ad campaign – Flight Centre is embodying the "you can't keep a good thing down" spirit today. While the sentiment might ring true, the theme didn't extend to its full-year results.
Looking at its results, the pandemic pulled the pin on the travel agent's performance in FY21. Namely, group total transaction value imploded by 74.2% to $3,945 million. This had a flow-on effect on revenue, falling 79.1%.
Worryingly, the lack of travel due to the reintroduction of lockdowns and restrictions – in conjunction with the removal of JobKeeper – meant underlying losses after tax came in at $364 million.
As a result, cash and cash equivalents were reduced from $1,867 million at June 2020 to $1,291 at June 2021. Although, the company's management believes it is well-capitalised and can manage its cash burn.
Management commentary
Commenting on the year ahead, Flight Centre chair Gary Smith said:
While FY22 will inevitably present its share of COVID-related challenges, we are focused on matters that are within our control and start the year with renewed optimism that we are making solid early progress on the path to recover; and are building strong platforms for the future by investing in the assets, programs and initiatives that will fast-track our rebound and drive future growth in shareholder value.
Additionally, Flight Centre CEO Graham Turner highlighted the potential of delivering a profit in FY22. While it might seem farfetched, Mr Turner is optimistic of returning to pre-COVID TTV levels by June 2024.
This optimism is being reflected in the surging Flight Centre share price today.
Where to from here?
Much like Qantas, Flight Centre has opted for the no guidance route. This is due to the unpredictable nature of COVID-19.
While vaccination targets are expected to be reached later this year, New South Wales eclipsed 1,000 new locally acquired cases overnight.
On the other hand, management revealed that the financial year has started off on the right foot. This is based on global gross TTV tracking at 26% of pre-COVID levels in July.
In short, the market appears to be embracing the Flight Centre share price as the country readies for re-opening.
