As a long suffering shareholder of Flight Centre it is pleasing to see the business back in the black, and now with a 7% upgrade to guidance of between $295 million and $305 million EBITDA (ASX Announcement, see below).

If it weren’t for the resilience of this man who owns 7.6% of the business, I would have parted ways with Flight Centre a long time ago.

Founder, Graham ‘Skroo’ Turner (photo: The Australian)

Looking forward, analysts are forecasting 52% EPS growth and ROE of 23.2%. Once managements gets on top of the debt (net debt to equity 31%) it will be starting to look a bit like the business of the ‘old days’ again!

Flight Centre shares are now up 138% on the post pandemic low of $8.75. So if you bought Flight Centre during April 2020 and put your trust in ‘Skroo’ you would have done exceptionally well.

However, if you paid the all time high price of $69.36 back in July 2018, you might be waiting quite a while before breaking even! I snapped up Flight Centre at the bargain price of $29.75 and haven’t received a dividend since! I’m looking forward to at least getting back into the black some time in the future!

At the current price of $20.81 and future ROE of 23.2% I expect Flight Centre to return investors approx 10% per year going forward (McNiven’s StockVal formula).

Disc: Held IRL 1%

Flight Centre Travel Group Upgrades Profit Guidance

FLIGHT Centre Travel Group (FLT) today upgraded its 2023 fiscal year (FY23) profit guidance.

Based on preliminary trading data, FLT now expects to report underlying earnings before

 interest, tax, depreciation and amortisation (EBITDA) between $295million and $305million for the 12 months to June 30, 2023.

The new midpoint, $300million, represents:

• A 7 per cent increase on the midpoint in the company's previously targeted range of underlying EBITDA between $270million and $290million; and

• A $483million turnaround on the underlying $183million FY22 loss

 Total transaction value (TTV) for FY23 is expected to be in the order of $22billion, almost 115 per cent growth on the prior year (FY22: $10.3billion) and the company's second strongest full year result behind FY19 ($23.7billion).

FLT's global corporate travel business has continued to outperform, delivering record TTV during FY23 in a market that has generally improved but has yet to fully recover to pre- pandemic levels.

Corporate TTV for FY23 is expected to reach $11billion, which represents more than 20 per cent growth on the business's previous TTV record of $8.9 billion (FY19).

This reflects:

• Gradual recovery in client activity following the removal of COVID-related travel restrictions; and

• The multi-billion-dollar pipeline of new accounts won across both the FCM and Corporate Traveller brands during the pandemic

 Global leisure TTV for FY23 is expected to be in the order of $10billion, following a strong and consistent recovery during the year's second half (2H).

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

"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.

“During FY23, we also invested in our luxury travel collection through the Scott Dunn acquisition early in the 2H and, more recently, the Luxperience events business to bolster our presence in a very attractive leisure sector.”

"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.

"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."

FLT will release audited FY23 accounts on Wednesday, August 30.