The Flight Centre Travel Group Ltd (ASX: FLT) share price is taking a beating today.
Shares in the S&P/ASX 200 Index (ASX: XJO) travel stock closed yesterday trading for $17.72. In morning trade on Wednesday, shares are changing hands for $15.30 apiece, down 13.66%.
For some context, the ASX 200 is 0.38% lower at this same time.
This follows the release of Flight Centre's half-year results for the six months to 31 December (H1 FY 2025).
Here are the highlights.
Flight Centre share price tumbles on results
- Revenue of $1.3 billion, in line with H1 FY 2024
- Total transaction value of $11.7 billion, up 3% year on year
- Underlying profit before tax of $117 million, up 7%
- Statutory profit before tax of $88.2million, down 27% from H1 FY 2024
- Fully franked interim dividend of 11 cents per share, up 10% from last year's interim dividend
What else happened with the ASX 200 travel stock during the half?
In other core financial metrics that could be impacting the Flight Centre share price, the company's revenue margin as a percentage of TTV remained steady at 11.4%. Management expects margins to grow in the second half of the financial year.
Flight Centre also reported significantly stronger second-quarter results compared to Q1.
For example, TTV growth in the second quarter came in at 7%. And second-quarter underlying profit before tax increased by 14%, compared to 2% growth in Q1.
The company said growth in half-year underlying profit was driven by investments in initiatives intended to deliver sustainable profit growth after rapid recovery post-COVID.
Among those initiatives, Flight Centre increased its investment in artificial intelligence (AI). The company said this is enabling it to deliver new customer products, enhance its people's productivity and create disruptive new offerings.
As for the 27% year-on-year decline in statutory profit before tax that looks to be impacting investors' sentiment today, the company pointed to "materially higher" FY 2024 gains on the buyback and remeasurement of convertible notes.
What did management say?
Commenting on the results that have failed to boost the Flight Centre share price today, CEO Graham Turner said:
The 1H was a tale of two quarters in that 2Q TTV and profit growth rebounded after a challenging 1Q. In fact, our 2Q profit growth rate more than doubled our 2Q TTV growth rate. providing good operating leverage and momentum ahead of our key trading months.
Our corporate business – now a materially larger business than pre-COVID – again delivered record 1H TTV and increased profit during a period of consolidation that should ultimately lead to more rapid earnings growth.
Leisure TTV also increased and has subsequently reached record levels in various locations and brands in January, but profit was in line with the strong FY24 1H result, partly because of investments in the high growth cruise sector.
What's ahead for the Flight Centre share price?
Looking to what could impact Flight Centre in the months ahead, the company reaffirmed guidance of underlying profit before tax in the range of $365 million to $405 million.
Flight Centre expects a strong second half, in line with normal trading patterns. The company said it is currently tracking towards the low to middle section of its profit target range, which is likely lower than what the market was hoping to hear.
"Group-wide, our foundations are solid and we are well placed to deliver stronger 2H profit as volumes increase during our busier trading period, a seasonal trend we are now seeing," Turner said.
"We are focused on our FY25 goal of a 14% to 26.5% UPBT uplift and believe growth of this magnitude – $45 million to $85 million – will be a solid achievement."
