Record Results for FCTG
Corporate travel division boosts FCTG’s half-year financial results
The strength of Flight Centre Travel Group’s (FCTG’s) global and Australian corporate businesses, as well as accelerated overseas earnings from other operations, have helped FCTG to post record half-year financial results.
In a statement to the Australian Securities Exchange (ASX) today, FCM’s parent company announced:
- Record global corporate and leisure sales: globally first-half total transaction value (TTV) increased to a record $11.16 billion. This exceeded the previous first-half record (FY 2018) by more than $1 billion, which is a 10% year-on-year growth.
- Increased global corporate and leisure profit: underlying profit before tax (PBT) increased to $140.4 million and was within the targeted range for the period.
- Diversification and globalisation success: Corporate businesses in Australia and overseas driving growth. Accelerated overseas sales and profits. Americas now an earnings powerhouse.
In releasing the company’s half-year results managing director Graham Turner said: “Our achievements to date generally reflect a solid start to the year and also highlight some key emerging themes – firstly our corporate model’s strength and secondly, the globalisation of our operations.
“The corporate business, which is largely built around the FCM Travel Solutions and Corporate Traveller brands, has a proven organic growth model that is highly scalable and highly productive.
“During the first half, corporate TTV increased 16% to $4.2 billion and grew by more than 30% in the USA and 20% in the UK and Europe , which are both top-five corporate markets globally.”
FCTG’s ASX statement said the company was in the second year of a five-year business transformation program. The corporate division’s transformation initiatives focus on globalisation, digital and technical investments, the delivery of integrated financial solutions, vertical integration in product and developing a workplace of the future for the company’s people. New and unique customer-facing systems and technology are being developed by FCM’s Innovation Labs – tech hubs that are now in place in Barcelona, Stockholm, Boston, Brisbane and Bangkok.
James Kavanagh, FCTG's executive general manager of corporate, said the group’s corporate division in Australia was performing strongly, returning record results for profit and sales during the six month period.
“From the investor call this morning the results show that our corporate businesses across Australia and New Zealand now contribute 27% of the business’ overall sales earnings in the ANZ region,” Mr Kavanagh said.
“During this period, our six corporate brands have recorded very healthy new client acquisition figures and retention of existing clients, which is a wonderful testament to our dedicated people.”
“These half-year financial results also reflect the innovative technology we have introduced both internally for our staff and also to our customers,” he said.
“Late last year we introduced our cutting-edge online booking product, Savi, which was received extremely well and is on the verge of being rolled out more broadly to our corporate customers.
“Our innovation labs also created Sam, our AI-powered chatbot and mobile travel assistant, which we made available to the Australian market in 2018. There has been significant take-up of this app and we’ve just added amazing new functionality to support our client’s travellers and their travel bookers.
FCTG’s management team today said the key strategies for FCM’s growth included standardising and globalising the FCM brand and the continued investment to corporate technology.
The positive first-half financial year trends are expected to continue over the full year, with the result likely to be driven by the corporate travel businesses globally and by the group’s other international businesses.
The company’s corporate growth will in part, be fueled by new accounts won during the first half. These wins, which amount to about $600 million in projected annual spend globally for the FCM business alone.
"Late last year we introduced our cutting-edge online booking product, Savi, which was received extremely well and is on the verge of being rolled out more broadly to our corporate customers."
FCTG's Executive General Manager Corporate Travel