The Flight Centre Travel Group, whose business travel brands include FCM and Corporate Traveller, has reported AU$301.6 million in underlying EBITDA in its annual results posted today – an almost AU$485 million turnaround from the AU$183.1 million underlying loss reported a year ago, representing a 265 per cent improvement.
Group revenue for FY23 was AU$2.28 billion, up from AU$1.01 billion in FY22, and profit before income tax was AU$70.46 million.
Covering the 12 months to 30 June 2023, the Brisbane-based group’s corporate travel business is “comfortably outpacing industry recovery” with record total transaction value (TTV) boosted in particular by growth in EMEA. Overall group TTV was up 112 per cent to AU$22 billion year-on-year, its second-strongest result to date at 92 per cent of FY19 levels.
The group’s AU$11 billion corporate travel TTV was up 96 per cent year-on-year and represented an almost 25 per cent increase on its previous best figure of AU$8.9 billion in FY19. In May, the group told investors it was on course to set a new record.
Corporate travel TTV in Europe, Middle East and Africa topped its previous record by 59 per cent, while new milestones were also set in Asia (up 24 per cent), the Americas (up 15.6 per cent) and Australia-New Zealand (up 10.5 per cent).
In the UK, corporate TTV now exceeds pre-Covid levels while the group has achieved “incredible growth” in Germany where its business is now 300 per cent bigger than in 2019.
The Americas generated the group’s largest proportion of corporate TTV at 31 per cent, marginally ahead of Australia-New Zealand (30 per cent) and EMEA (28 per cent).
“After an incredibly challenging period, we are pleased to report material profit and sales uplifts in improved conditions during FY23,” said Flight Centre Travel Group's managing director Graham Turner.
“Our AU$485 profit turnaround exceeded our initial expectations as our diverse global business benefitted from the removal of unprecedented restrictions that were imposed on travellers for some two-and-a-half-years and from strategies that we implemented to preserve our key assets and ensure we re-emerged in a position of strength.”
Turner added: “Corporate TTV reached $11billion, comfortably surpassing the previous record and broader sector recovery, as our business consolidated its position as a global industry leader with a compelling customer offering across two key brands – FCM [large accounts] and Corporate Traveller [SME business].”
Transaction volumes also exceeded pre-Covid levels, the group reported, with growth “again driven organically through high customer retention rates and a large pipeline of global account wins". FCM secured new accounts worth AU$1.6 billion in annual travel spend during the year while more than half of Corporate Traveller’s new business was previously unmanaged.
However, the group noted that bottom-line results were impacted by “significant upfront costs incurred in winning and onboarding the large volume of accounts secured, with some 1,000 new sales and support staff added to the corporate workforce during FY23”.
Looking ahead, the group expects client spend to “typically remain below pre-COVID levels in the near-term, as customers maintain their cost-reduction focus”. However, new account wins are expected push TTV above its record FY23 result.
See also: 'Major' business wins contribute to 70% revenue growth for CTM