Flight Centre share price sinks on another profit warning

Flight Centre is facing rising costs and margin pressure. In particualr staff costs are rising on the back of well publicised pressure.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Flight Centre Travel Group Ltd (ASX: FLT) share price neared a 52-week low today after the travel group told investors profit before tax for the six months to December 31 2019 is now expected to come in between $90 million to $110 million. This compares to the $140 million delivered in the prior corresponding half-year period.

It is still 'targeting' profit before tax between $310 million to $350 million for the full year, which compares to the $343.1 million in fiscal 2019. However the 'targeted' result excludes up to $17 million in one-off costs to be taken over the year related to a collapsed travel group and development costs around its Upside investment. 

Total transaction value was actually up 11% over the September quarter, however, margins are suffering on the back of higher costs. In particular higher staff costs with Flight Centre recently in the news over staff costs for the wrong reasons. 

Yesterday, Corporate Travel Management Ltd (ASX: CTD) delivered a much brighter trading update with its stock up around 10% over the last two trading sessions. 

Motley Fool contributor Tom Richardson owns shares of Corporate Travel Management Limited.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

A man looking at his laptop and thinking.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors were pulled back down to earth this Tuesday.

Read more »

A woman faces the camera with her lip raised up to the side in total confusion.
Bank Shares

Why is the CBA share price being hit so hard today?

Has CBA's luck finally run out?

Read more »

Three people with gold streamers celebrate good news.
Record Highs

7 ASX 200 shares that just smashed new record highs

In a topsy-turvy day for the ASX 200, these stocks have ascended to new price milestones.

Read more »

A young man punches the air in delight as he reacts to great news on his mobile phone.
Share Gainers

Why EML Payments, Gentrack, Regis, and Resimac shares are racing higher

These shares are outperforming on Tuesday. What's going on?

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why ASX, CBA, Iperionx, and Sayona Mining shares are dropping today

These shares aren't having a good session on Tuesday. But why?

Read more »

A man sits in a chair hunched over a laptop and covered head to toe in frozen icicles to represent Envirosuite's trading halt
Capital Raising

Why the Novonix share price is frozen today

Time to refill the cash tank before it runs out.

Read more »

Woman looking at a phone with stock market bars in the background.
Share Market News

Why did the rising ASX 200 just reverse course into the red?

US President-Elect Donald Trump has announced new tariffs on goods from China, Canada, and Mexico.

Read more »

A man has a surprised and relieved expression on his face. as he raises his hands up to his face in response to the high fluctuations in the Galileo share price today
Broker Notes

This ASX All Ords stock is undervalued and could rocket 60%+

Bell Potter is tipping this share to deliver big returns for investors.

Read more »