Flight Centre share price lifts following record, $1 billion month

The travel favourite updated its full-year guidance this morning.

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Key points
  • The Flight Centre share price is rising early in Wednesday's session, gaining 1.8% to trade at $20.92
  • It comes as the travel agency operator updates its guidance, narrowing its outlook and including its newly-acquired Scott Dunn business
  • The update followed a record March, when its leisure and corporate businesses brought in more than $1 billion of total transaction value

The Flight Centre Travel Group Ltd (ASX: FLT) share price is in the green after the S&P/ASX 200 Index (ASX: XJO) travel giant updated its guidance on the back of a record-breaking month.

The company's leisure and corporate legs saw their combined monthly total transaction value (TTV) surpass $1 billion for the first time ever in March as their COVID-19 recovery accelerates.

That helped to see the ASX 200 travel favourite "tracking comfortably" within its new full-year guidance range.

It's now targeting between $270 million and $290 million of underlying earnings before interest, tax, depreciation, and amortisation (EBITDA).

The Flight Centre share price is up 1.8%, trading at $20.92, in early morning trade.

That sees it outperforming the ASX 200 – the index is down 0.9% at the time of writing.

Let's take a closer look at the latest update from the travel agency.

Man wheels trolley full of suitcases while woman sits on them with her hands in the air at an airport.

Image source: Getty Images

Flight Centre share price rises on record March performance

The Flight Centre share price is higher this morning on news the company has narrowed its earnings guidance and updated it to include the newly-acquired luxury tour operator Scott Dunn.

It also revealed its leisure business drove its record March – bringing in 47% of the group's TTV. The segment's TTV rose 280% year-on-year over the first nine months of financial year 2023.

Meanwhile, its corporate business is also outperforming. Its TTV over the 10 months to 30 April is already in line with its record financial year 2019 performance, with recent wins expected to boost future TTV.

The company's revenue margin in the second half is expected to be in line with that of the first half and its underlying cost margin is sitting at a historic low.

Finally, it grew its cash and investments by $200 million last quarter to reach $1.3 billion.

Looking further ahead, Flight Centre is undergoing a capital management review, focusing on medium-term shareholder returns.

It's targeting an underlying profit before tax margin of 2% for financial year 2025 and plans to reach its goal through revenue and cost margin improvements.

The Flight Centre share price has been on a roll this year, rising 41% year to date. Still, the stock remains the market's most shorted, with a short interest of 11.6% at last count.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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