Flight Centre Travel Group (FLT) Guidance summary

Financial Guidance and Key Drivers

• FY24 and FY25 pre-tax profit guidance revised to AUD 300–335 million (or $300m–$335m UPBT), reflecting softer trading, macroeconomic headwinds, and US policy changes.

• Share buyback of up to AUD 200 million (or $200m) announced, commencing around May 12, to be completed within 12 months, aiming to reduce shares on issue and drive EPS growth.

• Downgrade attributed to cyclical macro conditions, ongoing investments in growth, underperformance in certain business units, and US policy changes.

• StudentUniverse and Asian corporate businesses expected to post full-year losses, with corrective actions and reviews underway; StudentUniverse may lose up to $10m in FY25.

• Cost reduction initiatives in Global Business Services and productive operations are expected to yield benefits from FY26, with a targeted $20m/month cost base and 5% FTE reduction.

Trading Environment and Business Performance

• Volatile macro and political conditions have led to lower-than-expected TTV growth, especially in core brands, with growth concentrated in lower-margin businesses.

• Corporate segment impacted by customer downtrading, though new business pipeline remains strong and corporate retention rates are in the mid-90s percentile.

• Leisure TTV growth driven by specialist and independent brands, while larger brands face margin pressure; global leisure business set to exceed pre-pandemic profitability.

• April saw a 9% reduction in corporate activity, attributed to seasonality and political instability, with SME growth in North America.

• U.S. travel demand impacted by political and entry policy issues, with some shift in outbound demand to other destinations like Japan.

Cost Management and Investment Priorities

• Ongoing investments in technology, AI, and key growth areas such as TPConnects and cruise sector, with $25m invested in TP Connects.

• Targeting a 5% FTE reduction and 15–20% CapEx cut in FY26, with a recruitment freeze for non-essential roles.

• GBS Fusion initiative focuses on technology, HR systems, and business process outsourcing to boost efficiency.

• Productive operations program aims for 11% productivity improvement and 10% FTE reduction over the project.

• Supplier collaboration to leverage short-term travel pattern changes and airline capacity shifts.