Flight Centre Travel Group (FLT) reported a 7% year-on-year growth for the first half of FY2025, with an underlying pre-tax profit (UPBT) of $117 million. The result reflects a strong recovery in the second quarter, marked by a 14% increase in UPBT.
Statutory pre-tax profit for the period stood at $88.2 million, down from $120.2 million in H1 FY2024. This decline was primarily due to higher proceeds from convertible notes in the previous year.
Despite the drop in statutory profit, FLT maintained its growth trajectory by investing in artificial intelligence (AI)-driven innovations aimed at enhancing customer experience and operational efficiency. The company expects its AI initiatives to deliver a 15-20% productivity increase by FY2026. These innovations, particularly in leisure AI tools, are designed to simplify online bookings and inquiries.
Several factors influenced FLT’s performance, including lower volume-based supplier payments, a $4 million investment in Global Cruises, and an $8 million decline in Asia. However, total transaction value (TTV) surged by $365 million to reach $11.7 billion. The corporate sector contributed $6 billion, while leisure accounted for $5.5 billion. TTV growth accelerated in Q2, rising 7% after a slow start in Q1, which was impacted by deflation in airfares in Australia and Asia.
Australian international airfare sales saw a 12% increase, although average fares dropped by 6.5% year-on-year. UPBT margins improved slightly and are expected to continue growing as seasonal trends and efficiencies recover. In January, UPBT margins in Australia exceeded 2.3%, with further growth anticipated.
FLT is also undergoing restructuring, having closed a division of its Infinity wholesale business after a $2.5 million loss. This follows the closure of Discova Americas and GoGo in FY24. The company declared an interim dividend of 11 cents per share, payable on April 17, bringing total returns since the pandemic to over $150 million. Additionally, FLT repurchased $200 million of convertible bonds and acquired Cruise Club UK and Dubai-based TP Connects.
Graham “Skroo” Turner, CEO of Flight Centre Travel Group, commented, “The first half is a reflection of two very different quarters, with Q2 TTV and profit growth rebounding after a challenging Q1. Our Q2 profit growth more than doubled Q2 TTV growth, providing strong operating leverage for the crucial trading months ahead.”
Turner highlighted that the corporate business, now larger than it was pre-pandemic, had achieved record TTV and profit growth. This momentum is expected to deliver faster earnings growth as consolidation continues.
While leisure business TTV also increased, profits remained flat compared to the strong first half of FY2024, which benefited from investments in the high-growth cruise sector. FLT’s leisure business is now more efficient, effective, and profitable, with a clear path for future growth across its brands.
FLT remains optimistic about the second half of the year, planning to leverage peak trading opportunities while advancing its AI and efficiency strategies.
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