The COVID pandemic has led to a significant drop in Flight Centre’s share cost. The share price fell by a staggering 85.92%, according to investors. Is the current discount a good deal for investors? What should I do? Flight Centre is a leading business in the travel industry. We have all heard it before. COVID brought down the entire sector in a matter of hours. With the return to travel and money, the industry will see a dramatic price rise. Is this true for Flight Centre?
This post will discuss whether I should buy FLT shares and the history of flight centre ASX dividend history.
Should I buy Flight Centre Shares 2022?
FLT’s principal activity is travel distribution in the corporate and leisure travel sectors. In-destination travel experience business includes tour operations, destination management and hotel management. Market Index
Flight Centre, a travel agency, was established in 1982 in Brisbane. They can book flights, holidays and hotels, car rentals, cruises, coach trips, travel insurance, visas, frequent flyer points, redemptions, and many other services.
Flight Centre is known by many names in Australia, New Zealand and the United States.
What’s FLT ASX Price?
Flight Centre shares were at an all-time high of $75.13 in August 2018, just before the COVID recession. The Flight Centre share price today is $15.24. This is mid-range in its 52-week range between $9.76-20.16. It is still around 80% below its peak. The FLT has only increased by 6.58% this year.
The broader market, however, is up 27.56% in this year’s first quarter and has fully recovered after the recession, pushing it to new heights.
Flight centre dividends | Flight centre ASX dividend history
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Flight Centre shares usually announce a dividend when it delivers its half-yearly results, typically in February, and its full-year results in August. This is as per their financial calendar. Bonuses are often paid twice yearly: in March (interim dividend) and September (final tip).
Since 1998, FLT has paid biannual dividends each year. This includes during the GFC of 2008. However, the rewards were not paid during the COVID recession in 2020 or interim of 2021. All FLT shares that paid dividends during this period were fully-franked.
FLT Shares Investor Sentiment
We surveyed 99 Investors to determine their current Flight Centre shares sentiment. The results are here:
This survey shows that there is a bullish investor sentiment for FLT shares. What is FLT’s value? Let’s dive in.
Should I Purchase Flight Centre Shares? Essential information
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Should I Purchase Flight Centre Shares? Finances
Flight Centre group releases its half-yearly results in February. Here are the highlights.
The Flight Centre Travel Group (FLT) continues to meet the challenges presented by COVID19 and the extraordinary travel restrictions in place to limit its spread.
Flight Centre Share Price Prediction
The 2021 financial year was released by FLT. FLT today released its first half (1H) accounts for FY21. It stated that while trading conditions worldwide remained volatile, the results had steadily improved due to targeted cost base reductions, revenue increases, and other factors.
The Business now has
- It has reduced its cost base by 66%, representing $1.9billion in annualized savings. This does not affect its investment in key growth drivers nor its ability to rebound quickly if conditions improve.
- Initiated to generate total transaction values (TTV) and revenue in a domestic-only travel market. December revenue was at its highest since March 2020, when travel restrictions were implemented globally.
- Month-on-month decrease in net operating cash flow during the 1H
- To help the company withstand an extended downturn and capitalize on opportunities during recovery, it maintained a liquidity runway of $1.2billion. This could be used to fast-track the launch of the largest ever vaccination program in the world.
Flight Centre is reducing income statements.
The Income statement shows that the group’s revenue dropped 90%, from $1.546B to $160M. We can see that FLT was primarily focused on reducing expenses. The income statement shows that costs have been cut by roughly half across the board. The group suffered an end loss of $317M and a defeatist EPs of -117.2 Cents per share.
FLT Income Statement, Source
Flight Centre Share Price Prediction 2022
We’ll see what has remained stable despite the challenging year. Despite a 90% loss in income, assets have only slightly declined. The various groups’ debts have remained low because they have not taken on additional debt.
The cash balance of the group is still $ 1.67 billion. Given current costs, the company seems to have adequate capital in place for a responsible future. We don’t expect to see a demand for a moderate capital rise.
FLT Balance Sheet Source
Cash Flow Statement
We see a cash flow statement that shows a $426M inflow from financing ventures. FLT reports that $400m was raised by the issue of changeable bonds and $117m from the Bank of England COVID-19 funding facility.
FLT Cash Flow Statement Source
Flight Centre Share Price Prediction 2025
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The Technical Analysis community seems to be bearish on FLT shares. The Technical Factors and moving averages indicate a Strong Buy.
A short-term rebound to $17.4 seems plausible. A second scenario would be that $13.3 and $12.5 would be required for a $14.3 disadvantage breakout.
This is a breakdown of the Technical Factors.
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FLT shares: Cap Raising and Bailouts
Flight Centre wanted to be a part of $1.2 billion in government bailouts during the recession.
“It’s a tiny and very meagre package at best,”
FLT was able to save itself with little or no government assistance. In April 2020, FLT released a capital raise report.
These are the details:
- *A fully underwritten equity capital raising of $700,000,000, which includes a $282million institutional placement (Placement) and a $419million 1-for-1.74 pro-rata, non-renounceable entitlement offering (Entitlement offer) (together, the Equity Rising).
- *A $200 million increase in commitment from existing lenders
- It has been confirmed that the previously announced cost control and cash preservation initiatives will reduce annualized operating costs by $1.9 billion2 (to about $65 million monthly by July 2020).
The successful placement raised approximately A$562 million at A$7.20 per Share.
FLT shares: Representative ownership and trading
A decent 17% ownership represents Flight Centre. General investors hold 39.3% of the assets, while organizations control 35.5%. Private companies own 7.9%.
Graham “Skroo” Turner, FLT’s CEO and significant representative, are responsible for $275 million.
Crash in the Travel Industry
Over the past year, the Travel industry has suffered huge losses. Three powerful brands (QAN FLT and WEB) are now on sale at around a 30-50 per cent discount. While the market has generally recovered, investors are beginning to see potential in these stocks.
The international table will soon be gone. According to the latest federal budget, Australia will be banned from international travel until mid-2022.
This is our analysis of the Travel industry.
Tourism Is Disruptive
Tourism has been severely disrupted by the COVID-19 pandemic, both in Australia and extensively. The following happened to the industry:
- International visitation suddenly stops
- Restrictions on domestic mobility
- Increasing safety and health concerns
Australia’s entrepreneurial management managed the pandemic. This has helped to protect domestic tourism demand. The overall success in controlling the virus has made it easier to determine the safety of Australian tourist destinations.
In late September 2020, almost two-thirds (63%) of Australians said they felt safe travelling within Australia. This is an increase of 45% from late July 2021, when it was only 45%. However, only:
- 51% of Australians intend to travel within the next six months
- 16% plan to book a vacation next month (as of 23 September 20021).
The COVID-19 effects on aviation were immediate and severe. They required the company to adapt quickly in the face of massive disruptions.
- Volatile border closures and sudden loss of buyer interest caused a 95% decrease in domestic passenger numbers in June quarter 2020 compared to June quarter 2019. (Source: Bureau of framework and Transport Research Economics Aviation Statistics 2020.
- In June 2020, domestic overnight travel, including air travel, declined from 24% to 6% compared to June 2019.
- Virgin Australia went into voluntary administration in April 2020. Bain Capital, a private equity firm in the United States, later acquired it.
- Qantas Australia and Virgin Australia have announced thousands of job losses. Airlines operations were under severe pressure due to stop-start family border closures.
- Airports have seen the effects of reduced airline activity. To stay afloat, many had to cut back on staff and close their businesses on certain days.
Flight Centre Shares: Future Prospects
The prospects for the future are uncertain at this point. The above statistics show that the international travel industry is dead for the foreseeable future. We are expecting a substantial recovery in domestic travel. FLT relies on strong returns because they have significant domestic and regional travel exposure.
FLT aims to return to breakeven in leisure and corporate travel for the 2021 calendar year, based on the assumption that domestic borders will open permanently and that some (low-risk) international travel may be allowed.
As reservations return returns have increased, so has the recovery in domestic tourism.
Booking Count graph, Source: Half Year reports
Here is FLT Feature’s current outlook.
- As long as there is a stable cost base and no clarity about revenue trajectory, there will be no guidance. There are no timeframes to lift restrictions.
- Domestic recovery is possible in the short term after permanent border reopenings.
- We expected some international travel to occur in 2021. These low-risk corridors will be open after unvaccinated people and groups have been vaccinated.
- Secure long-term relationships with key suppliers through multi-year agreements and attractive global deals
Is Flight Centre a publicly traded company?
The company is based in the United States under the Liberty Travel and Travel Associates retail brands and GOGO Worldwide Vacations wholesale brands.
Are flight Centre shares fully franked?
Flight Centre has been paying dividends twice yearly for the past two years. Due to COVID-19’s ongoing effects, Flight Centre has not paid dividends for 2021 and 2022. The company withdrew its last interim dividend of 40c per share, which was due to be paid on 17 April 2020.
Who owns the flight Centre?
FLT was founded in 1980 with just one shop. Since then, the company has experienced remarkable growth under Graham “Skroo” Turner, its founder and CEO. Today, FLT has over 30 brands, including Liberty, the famous US travel agency group, and Flight Centre, its flagship leisure travel brand.