The Flight Centre Travel Group Ltd (ASX: FLT) share price has sunk around 8% after giving investors some FY25 insights.
Flight Centre is one of the largest travel agent businesses in Australia, for both leisure and corporate customers. It also has a global presence across the world.
Flight Centre FY25 update
The business told investors some of the numbers it’s expecting to report in its 2025 financial year result.
It’s expecting to report record total transaction value (TTV) of $24.5 billion for FY25.
The underlying profit before tax (UPBT) is expected to come between $285 million to $295 million, but this is “just below” the bottom of its previous guidance and reflects “short-term cyclical challenges” that arose late in the financial year.
Flight Centre highlighted underperformance and additional, non-recurring costs in Asia. There have also been significant impacts on leisure results with escalating tensions in the Middle East and the ongoing global downturn in bookings to the US.
The corporate business is also expected to show UPBT below FY24, though the company has performed “solidly” and did deliver profit growth outside of Asia.
Positives for FY26
Flight Centre noted that a stronger corporate TTV pipeline has been secured for FY26.
FCM (a Flight Centre business) has won new contracted accounts with projected annual spends of around $1.3 billion in FY25.
Corporate Traveller is outperforming in the large US market, with TTV increasing 12% in a weakening local market.
The company also noted it has maintaining a strong balance sheet, allowing it to carry out the share buyback, acquire Cruise Club in the UK and invest in the business.
It’s looking to boost efficiencies and lower costs across the business. The company also wants to reduce capital expenditure by between 15% to 20% in FY26.
Flight Centre plans to launch a leisure loyalty program and also develop new AI products to enhance the customer experience, boost productivity and disrupt traditional offerings.
Final thoughts on the Flight Centre share price
Clearly, the market isn’t feeling too positive on the company right now.
It can’t necessarily control what the challenges it’s facing in the global market, but that’s one of the risks with investing in ASX travel shares.
The company is doing what it can to turn things around from here, but it could take time to regain momentum. There are other ASX dividend shares I’d rather buy, though it could be a turnaround opportunity if it has been oversold on a medium-term view.
