Flight Centre Travel Group Ltd (ASX: FLT) shares will be under scrutiny next week when the business hands in its FY23 result.
The ASX travel share is going to reveal how it performed in the 12 months to 30 June 2023 when it reports on Wednesday 30 August 2023.
Let's look at what we already know and what the business could report.
Profit update
About a month ago, the business gave a profit update on what it's expecting for FY23.
It indicated 2023 financial year earnings before interest, tax, depreciation and amortisation (EBITDA) to be between $295 million to $305 million. This guidance saw a 7% increase from the mid-point of the previous guidance of $270 million to $290 million.
The midpoint of $300 million would be a significant turnaround of $483 million compared to the underlying EBITDA loss of $183 million from FY22. Profit growth can be the key driver for Flight Centre shares.
The total transaction value (TTV) for FY23 is expected to be approximately $22 billion, which would be 115% growth compared to FY22's $10.3 billion. That would make it the second-strongest year ever for the company behind FY19's $23.7 billion.
Corporate TTV is expected to reach $11 billion, which represents more than 20% growth on the previous TTV record of $8.9 billion in FY19. There has been a recovery in client activity after the removal of COVID-related travel restrictions, and a multi-billion-dollar pipeline of new accounts won during the pandemic.
Global leisure TTV for FY23 is expected to be "in the order" of $10 billion after a "strong and consistent" recovery.
The Flight Centre managing director Graham Turner said at the time:
Looking ahead, our expectations are that leisure travellers will continue to prioritise holidays and experiences over other areas of discretionary spending, as we have seen in the past and as evidenced by the consistent year-on-year growth in outbound travel in large and important markets like Australia.
In corporate, we expect that the large volume of new business that we continue to win – both from competitors and accounts that were previously unmanaged – will offset the impact on TTV flowing from lower-than-normal client spend.
Positive, or negative, commentary about the outlook could be very important for the ASX travel share.
What do analysts make of Flight Centre shares?
On Commsec, the current estimate is that the ASX travel share can generate earnings per share (EPS) of 37.5 cents, but that it won't pay a dividend.
Profit is then expected to jump in FY24 and FY25. According to Commsec, EPS is projected to increase 169% to $1.01 in FY24 and then a further 37% to $1.38 in FY25.
Going on this result, analysts are much more optimistic than negative on the business. Nine analysts rate it as a buy, six as a hold, and only one as a sell.
It's been a strong year for the Flight Centre share price, with a rise of more than 50% year to date, as we can see on the chart below.
