Flight Centre’s share cost has been bid down broadly following the COVID pandemic. Investors saw the share price plunge a massive 85.92%. Does the current discount present a long opportunity to investors? Should I buy Flight Centre Shares in 2022? Flight Centre is a flagship business in the travel zone. In the previous months, we have all heard the hypothesis. COVID brought down the whole sector almost overnight, with the return of travel and the return of money to the sector, prices will go sky high, right? Is this true for Flight Centre?
In this post we will discuss about should I buy FLT shares and flight centre asx dividend history.
Should I Buy Flight Centre Shares 2022
FLT’s Principal Activity is travel distribution in both the leisure and corporate travel sectors, plus in-destination travel experience businesses including tour operations, destination management, hotel management, companies (DMCs), and wholesale. Source: Market Index
Flight Centre is a travel agent established in 1982 and is headquartered in Brisbane, Australia. They order flights, holidays, hotels, car rental, cruises, coach tours, travel insurance, visas, the redemption of frequent passenger points and much more.
Flight Centre operates under multiple names in Australia, New Zealand, United States, Canada, South Africa, United Kingdom, Hong Kong, India, China, Singapore, United Arab Emirates, and Mexico.
What is FLT ASX Share Price?
Just before the COVID recession, Flight Centre shares had accomplished well pushing to an all-time high of 75.13 in August of 2018. Today the Flight Centre share price is $15.24, which is in the middle of its 52-week range of $9.76-20.16. This is still down around 80% because of its peak. FLT is up only 6.58% this year.
In contrast, the broader market is up 27.56% this year and has fully recovered from the recession pushing it to new heights.
Flight centre dividends | Flight centre asx dividend history
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Flight Centre shares typically announce a dividend with the delivery of its half-yearly results in February and full-year results in August as seen in their financial calendar. Dividends are frequently paid twice a year, in March (interim dividend) and September (final dividend).
FLT has paid biannual dividends every year since 1998. This included during the GFC in 2008. However, no dividend was paid during the COVID recession of 2020 or interim 2021. All dividends paid by FLT shares during this time have been fully-franked.
FLT Shares Investor Sentiment
After surveying 99 Investors about their current Flight Centre shares sentiment: BUY-HOLD-SELL, As their target price over the next 12-months here are the results;
The results from this survey performance there is currently a strong bullish investor sentiment on FLT shares. So how much are FLT shares worth? Let’s get into it.
Should I Buy Flight Centre Shares: Essential information
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Should I Buy Flight Centre Shares: Financials
Flight Centre group liberate its half-yearly results in February here’s the highlights:
The Flight Centre Travel Group (FLT) continues to answer to the challenges constituted by COVID19 and the exceptional travel restrictions that are in place to moderate its spread.
Flight Centre Share Price Prediction
In releasing its 2021 financial year. (FY21) first half (1H) accounts, FLT said today that while global trading conditions remained volatile, results had cautiously improved thanks to targeted cost base reductions and revenue increases during the period.
Since the crisis escalated in March 2020, the Business has now:
- Lowered its cost base by 66% (representing a $1.9billion annualized saving) without jeopardizing either its investment in key growth drivers or its ability to rebound quickly when conditions improve
- Started to generate total transaction value (TTV) and revenue in a pre-vaccination, domestic-only travel world – December revenue was at its highest point since travel restrictions were introduced globally in March 2020
- Delivered month-on-month depletion in net operating cash outflow during the 1H;
- Maintained a $1.2billion liquidity runway to help it withstand an extended downturn or capitalize on opportunities during the recovery phase, which could now be fast-tracked with the world’s largest-ever vaccination program underway
Why is Flight Centre Going Down Income statements?
In the Income statement, we can see the group’s revenue has dropped 90% from $1.546B to $160M. From the highlights above we read which FLT’s main response was cutting expenses where possible. This effort has paid off in the income statement where we see costs have been roughly cut in half across the board. The group had an end loss of $317M, giving the group a defeatist eps of -117.2 cents per share.
FLT Income Statement, Source
Flight Centre Share Price Prediction 2022
We will see what has remained strong despite the challenging year. Assets have declined only marginally despite a 90 per cent loss of income. Debts have remained low as the groups have not taken on more debt.
The group still has $ 1.67 billion in cash. Given current costs, the company appears to be well-capitalized for a responsible future. We do not expect demand for a sensible capital increase.
FLT Balance Sheet Source
Cash Flow Statement
In the cash flow statement, we see an inflow of $426M from financing ventures. FLT reports $400m raised from the issue of changeable notes and $117m raised from the Bank of England COVID-19 financing facility.
FLT Cash Flow Statement Source
Flight Centre Share Price Prediction 2025
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In summary, a short-term rebound to $17.4 is believable. The second scenario is that a disadvantage breakout of $14.3 would call for $13.1 and $12.5.
Here’s a disintegration of the detailed Technical Factors;
FLT Shares: Cap Raise and Bailouts
Amid the recession, Flight Centre was desperate to get a piece of the government’s $1.2 billion bailouts.
“It is a very small, very meagre package at best,”
With little to no government aid, FLT managed to bail itself out with a capital raise report in April 2020.
Here are the details:
- •A ~$700 million fully underwritten 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 dedication from existing lenders
- Confirmation that the previously announced cost control initiatives and cash preservation initiatives are anticipated to reduce annualized operating expenses by approximately $1.9 billion2 (to approximately $65 million per month, by the end of July 2020).
This placement was mostly successful raising approximately A$562 million at A$7.20 per New Share.
FLT Shares: Representative Ownership and Trading
Flight Centre has decent representative ownership of around 17%. Meanwhile, general investors own 39.3%, organizations own 35.5%, and the remaining 7.9% are owned by private companies.
Graham ‘Skroo‘ Turner is the major representative and CEO owning $275 Million of FLT.
Travel industry Crash
The Travel industry has made huge losses over the past year. Three big-name brands (QAN, FLT, WEB) are now available at a discount of about 30-50 per cent, while the market has largely recovered, investors are starting to see opportunities in these lagging stocks.
Shortly, the international table will be out of the table. The latest federal budget has shown that Australia is likely to be barred from international travel until at least mid-2022.
Here is our analysis of the Travel industry.
The COVID-19 pandemic has caused severe disturbance to tourism, both extensively and in Australia. The industry experienced:
- a sudden halt in international visitation
- restrictions on domestic mobility
- increased health and safety concerns.
Australia’s enterprising management approach to the pandemic has played a key role in protecting domestic demand for tourism. The general success in containing the virus has further improved the discernment of safety for Australian tourism destinations.
In late September 2020, two-thirds of Australians announced they felt safe to travel within Australia. This was up from 45% in late July 2021. However, only:
- 51% of people intend to travel to Australia in the next six months
- 16% intend to book a holiday in the next month (as of 23 September 2021).
The COVID-19 impacts on aviation were instant and severe. They forced the company to adapt quickly in the face of mass disruptions.
- Volatile border closures and the sudden loss of buyer demand saw a 95% drop in the total number of domestic passengers carried in the June quarter 2020, compared with June quarter 2019 (Source: Bureau of framework and Transport Research Economics, Aviation Statistics, 2020).
- Domestic overnight trips that included air travel fell from 24% to 6% in the June 2020 quarter compared with June 2019.
- Virgin Australia entered voluntary administration in April 2020. It was later obtained by United States private equity firm Bain Capital.
- Australia’s primary airline carriers, Qantas and Virgin, state thousands of job cuts. The stop-start nature of family border closures placed extreme pressure on airline operations.
- The Results of heavily reduced airline activity have flowed onto airports. Many had to lay off staff and close company on certain days to remain afloat.
Flight Centre Shares: Future Prospects
At this stage, the prospects are unclear. From the above statistics, we see the international travel sector has died for the ascertainable future. On the other hand, we are set up to see a strong recovery in domestic travel. FLT is relying on this strong return as they have important exposure to domestic/regional travel.
“FLT is targeting a return to breakeven in both leisure and corporate travel during the 2021 calendar year on the basis which domestic borders are likely to open permanently and some (low risk) international travel may be granted”
The recovery in domestic tourism has had a positive effect on the return on net sales as reservations return.
Booking Count Graph, Source: Half Year Reports
Here’s what FLT Feature as their current outlook:
- No guidance as long as– stable cost base but lack of clarity around revenue trajectory is given no timeframes for restrictions to be lifted
- Domestic recovery awaits in the near-term – after permanent border re-openings
- Expecting some international travel later in 2021 – low-risk travel corridors after unsafe people and groups are vaccinated (seems optimistic to us)
- Securing long-term connection with key suppliers – multi-year agreements, attractive global deals