Travel giant, Flight Centre has put more meat on its October 9 earnings warning, and seen a further sell-off.
Thursday’s update at the 2019 AGM saw Flight Centre has sent the company’s shares tumbling to a six-month low on Thursday of $39.20.
That takes the fall since the day before the October 9 update to more than 17%.
The shares ended yesterday at $40.07 (down 5.4%) against the $47.20 close on October 8.
“As expected, the first four months of FY20 have been a challenging period as we have again experienced the issues and disruptions that significantly impacted second-half results last year,” Flight Centre MD Graham Turner told the company’s AGM.
“These issues…have mainly affected bottom-line results to date and have prevented us from capitalising on the strong and consistent total transaction value (TTV) growth we have been achieving.”
The company said it expects underlying profit before tax (PBT) of between $90-110 million for the half-year ending December 31, 2019, down sharply from the $127.4 million statutory profit before tax reported for the December half of 2018-19. The company quoted an underlying PBT of $140.4 million meaning the at worst the drop would be more than 30%.
Mr. Turner said in his address that while we expect some stabilisation later this quarter, it is currently very difficult to gauge exactly where we will finish the first half in profit terms because of:
“The ongoing uncertainty we are experiencing in some important geographies; and the fact that we have yet to experience like-for-like trading conditions in Australia, given that we had a fairly strong start to FY19 before TTV slowed in November and December and generally remained subdued for the rest of the year.
“November and December of this year are, therefore, likely to provide a more meaningful insight into our progress,” Turner told the meeting.
It expects an improvement in the second half of the year, targeting an underlying PBT of between $310-350 million for the full year.
“The mid-point of this full-year range – $330 million – represents a 3.8 percent decrease on the $343.1 million underlying FY19 results,” the company said.
Flight Centre shares are down 3.9 percent to $40.75 having tumbled as much as 7.5 percent earlier in the session.