Mr Turner also doused cold water on dividend hopes this year, but predicted that Chinese airlines resuming flights should help reduce the price of plane tickets and boost travellers from the Asian nation.
The company last month flagged such a recovery in results, after the travel sector was devastated by the COVID-19 pandemic that enveloped the globe in 2020.Underlying earnings before interest, tax, depreciation and amortisation hit $95 million, which was within guidance, the company said. Its pre-tax losses were smaller at $18.3 million.
Flight Centre said this lag was because it invested money to grow the corporate business long-term. Divisional head Chris Galanty said bringing on board new clients incurred high costs in the first year, but this customer would hopefully provide recurring revenue.Flight Centre’s own underlying results had excluded costs such as $16.4 million spent on retaining employees, which it argued was a temporary measure.
The company’s previous capital raising material has listed a slowdown in economic conditions as a risk. But Mr Turner argued that even though travel was “a discretionary purchase, customers typically view it as essential and prioritise it above other discretionary items”., a joint venture whose brands include retail chain 99 Bikes and wholesalers Advance Traders.Its contribution to Flight Centre profits dwindled to $432,000, down from $9.
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