- Flight Centre Travel (FLT) is expecting to report a statutory loss before tax of between $825 million and $875 million for the 2020 financial year (FY20)
- The previous financial year the company recorded a $364.3 million statutory profit before tax
- At the end of June 2020, Flight Centre had a $1.9 billion cash balance including $1.15 billion in liquidity
- Additionally, the company has secured $200 million of funding over the month of July, to help see it through the COVID-19 pandemic
- Flight Centre closed 5.05 per cent higher at $12.28
Flight Centre Travel (FLT) is expecting to report a statutory loss before tax of between $825 million and $875 million for the 2020 financial year (FY20).
That is compared to a $364.3 million statutory profit before tax recorded in the 2019 Financial Year.
As a consequence of pandemic condition, the company announced significant cost-cutting measures in April, which was designed to cut $1.9 billion from annual costs. This included closing half of its leisure stores globally, and reducing its workforce by 70 per cent.
At the end of June 2020, the company had a $1.9 billion cash balance including $1.15 billion in liquidity.
Much of the revenue generated since March originated from Flight Centre’s corporate travel businesses, with most essential services still permitted to travel.
Leisure travel, however, was much more severely impacted by restrictions and subdued consumer confidence.
Managing Director Graham Turner said that while the last few months have been trying for the company and the travel industry, revenue is beginning to improve.
“COVID-19 and, specifically, the government responses to it have clearly had devastating impacts on businesses worldwide and on the airline, travel, tourism and hospitality industries in particular. This has severely impacted us and our people and some very tough decisions have been made over the past four or five months.”
“Despite ongoing restrictions, revenue has now started to increase, particularly in Europe, and we have surpassed our initial cash flow target, thereby extending our liquidity runway.”
“We have also continued to win a record amount of new corporate accounts while generating an underlying corporate profit during FY20,” he said.
Flight Centre intends to release its audited FY20 results on August 27.
Secures Funding
Additionally, the company has secured $200 million of funding over the month of July, to help see it through the COVID-19 pandemic.
Since the global imposition of travel restrictions, the company has been working to slow cash burn and extend its liquidity runway.
The funding secured in July came from the sale of the Melbourne head office, a government-backed loan in the U.K. and the extension of the JobKeeper subsidy in Australia.
Flight Centre recorded a net operating cash outflow of $53 million in July, including $17 million in revenue, or a $43 million outflow after the $10 million JobKeeper benefit.
Company shares gained 5.05 per cent in today’s session to close at $12.28.