I managed to enjoyed that last recent wave up ( w(i)of W3 ) and now looking for the bottom of w(ii) I have charted this out to be around th 20.30 to 20.70 price zone. I still hold a good sum and will be loading up my position once it starts to climb up from the bottom of w(ii) with the original position providing me with a decent buffer. Ill provide the charts closer to that area. Right now watching/waiting

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.

Founders Bill James and Geoff Harris have sold shares this week, although Skroo Turner has held on to his. For them it’s likely a good time with share double the Covid crash lows, but still a long way from pre pandemic levels. The trio still retain more than 20% of the shares.

This is a tough sector when we have been unable to travel, although they expect to see between 60% and 75% of pre-pandemic corporate travel return next financial year. I’m not so sure.

The company notes it hasn’t recorded “any notable disruptions due to Russia’s invasion of Ukraine.” Well ok, but there has been hardly any international travel, so that’s not surprising.

Unlike the return post SARS, which only impacted a small number of cities, I think this time it will be different. While there may be pent up demand, our habits have changed. For example, even though we are “back in the office” still many customer meetings are requested to be remote.

Incidentally, Flight Centre is currently the most shorted stock on the bourse. Maybe the shorters also think there is a tough road ahead.

01-July-2020:  FLT TO TAKE UP ADDITIONAL FUNDING

FLIGHT CENTRE TRAVEL GROUP TO TAKE UP ADDITIONAL FUNDING TO OFFSET SHORT-TERM CORONAVIRUS DISRUPTION

Flight Centre Travel Group (FLT) has secured access to a debt facility of up to GBP65million, which will be drawn as and when required to help offset the coronavirus’s impacts on its United Kingdom business. As announced previously, the funding has been made available to FLT via the Bank of England’s Covid Corporate Financing Facility, a program that has been implemented to support short-term liquidity among firms as they work to overcome disruption caused by the virus and the restrictions that are in place to slow its spread. The initial notes issued under the facility will mature in March 2021 and should be capable of being extended for a further 12 months through the issue of further notes under the facility.

--- ends ---

--- seems like a sensible move to me --- 

I think FLT looks like a good solid longer term opportunity, but I'm not currently a holder, because I see better opportunities elsewhere.  Also, things could get worse for FLT in the near-term, and they might get cheaper.  But you never know.  I'm personally avoiding the sector currently, but I can understand the appeal.

06-Apr-2020:  Operational Update and Equity Raising

Equity Capital Raising and Request for Extension of Suspension

EQUITY CAPITAL RAISING TO STRENGTHEN BALANCE SHEET PLUS ENHANCED LIQUIDITY  

The Flight Centre Travel Group (Flight Centre or FLT) is pleased to announce a comprehensive package of initiatives designed to strengthen its balance sheet and liquidity position in the context of prevailing market uncertainties and position it for future growth.

The initiatives announced today complement the previously announced cost reduction and cash preservation initiatives implemented by FLT to help overcome the unprecedented travel and trading restrictions imposed by governments in response to the COVID-19 pandemic. 

The initiatives announced today include: 

• A ~$700 million fully underwritten(1) equity capital raising, comprising a ~$282 million institutional placement (Placement) and a ~$419 million 1-for-1.74 accelerated pro rata non-renounceable entitlement offer (Entitlement Offer) (together, the Equity Raising);
• A $200 million increase in commitments from existing lenders; and
• Confirmation that the previously announced cost control initiatives and cash preservation initiatives are anticipated to reduce annualised operating expenses by approximately $1.9 billion(2) (to approximately $65 million per month, by the end of July 2020). 

(1) Excluding the founder commitments under the institutional component of the Entitlement Offer and the circumstances described on slide 45 of FLT’s investor presentation released to ASX on 6 April 2020 (Investor Presentation) under the heading “Shortfall”. Refer to paragraph 2.2 of the Key Risks in the Investor Presentation for a description of the terms and conditions of the underwriting arrangements. Assumes that an additional 229,466 FLT shares are issued prior to the record date for the Entitlement Offer pursuant to the exercise of awards that have vested under FLT’s Long Term Retention Plan, noting that the actual number of FLT shares that are issued may be less than this number depending on whether the participants exercise their vested awards in time. These amounts are subject to rounding.

(2) Compared to operating cost base between July 2019 and February 2020 of approximately $227 million per month.

--- click on links above for more ---

The Offer will be conducted at $7.20 per New Share (Offer Price), representing a 27.3% discount to the last traded price of $9.91 on 19 March 2020.

26-Mar-2020:  Flight Centre Details Coronavirus Response Plan

Key points:

• Three-pronged plan in place to tackle prolonged coronavirus-driven travel downturn 
• Costs, cash & liquidity focuses – without jeopardising future growth prospects & while maintaining company culture
• Pre-coronavirus staffing levels now unsustainable – significant reductions needed to better reflect prevailing trading climate & preserve jobs for the long-term
• About 6,000 support & sales roles to be lost globally either temporarily or permanently & including 3,800 people in Australia (temporarily stood-down)
• Intention is to return stood-down people to workforce when restrictions are lifted & demand increases. Short-term opportunities available for impacted employees – access to up to 10,000 roles in Australia
• Strong customer focus to be retained – in low demand environment, work-force helping travellers adjust plans or fly home ahead of enforced border closures

[Click on link above for further details]

I note that they are not yet ready to lift the trading suspension, and the reason is:  

LIQUIDITY

"FLT is undertaking steps to ensure it retains a robust balance sheet and liquidity position to enable it to manage through the current crisis. The company is well progressed in pursuing relevant initiatives and will update the market in due course, at which time it also expects to end the voluntary Australian Securities Exchange suspension that is currently in place."

As I have said over the past week, debt levels are the major issue.  FLT has done well throughout their history, and in most years without any net debt (and often with substantial net cash), and that's one of the things that has attracted me to them in prior years as an investment (and I have been a happy FLT shareholder at various times, but not this year) but they currently do have debt, and it's not a good time to have debt, when you don't have the revenue to service that debt.

The silver lining is that I think they are big enough and high-profile enough (with their bricks-and-mortar stores) to either navigate their way through this or be saved by the Australian Government as part of their stimulus measures - some of that stimulus would naturally be targeted at those industries hardest hit by this pandemic. 

I am more concerned about WebJet (WEB) to be honest.  I'm not sure that companies that are purely online with only a small fraction of the employees that a company like FLT has is going to be viewed in the same light by the Government.  In other words, the fallout - as far as the Government is concerned - of an online company like WEB failing - is not nearly as problematic to them as the failure of a big employer like FLT.  I could be wrong of course, but that's how I'm seeing it.

Balanced article from the AFR on Flight Centre's CV-19 challenge:

https://www.afr.com/street-talk/flight-centre-needs-200m-additional-liquidity-cs-20200320-p54c69

A $200 million shortfall and a likely unavoidable capital raise at some very low prices.  Prices which may seem quite cheap in say 2023 if the company lands safely on the other side of this existential crisis.

Apropos of nothing, here's a comparison of share price movements for Flight Centre as measured from the pre-GFC and pre-Virus peaks.

Not sure what you can infer from it (maybe very little).

The company will likely experience its worst trading period ever, and that could extend for longer than first suspected. With $186m (unencumbered) in the bank, they have a strong balance sheet, so can endure for a good while -- but it will still hurt.

Except in the case of a extremely sharp and prolonged downturn in travel (lasting, say, more than a year), the current price is probably one that will deliver ayttractive gains when we look back in five years -- even if it goes a lot lower from here.

Just remember that it easily can. If we apply the GFC peak to trough drawdown to the most recent peak, it suggests shares could go as low as $7.36 (!)

I wouldnt fault long term buyers at the current price, but it's too spicey for me. Although that could change if prices keep falling.