Flight Centre Guides FY27 Profit to $290m–$325m, Warns on First Half

Flight Centre Travel Group has set initial FY27 underlying profit before tax guidance of $290 million to $325 million — growth of 4–17% on last year's $278 million — while warning that first-half profit will come in below the prior year's $125 million.

Managing director Graham "Skroo" Turner told the company's AGM, in a statement filed with the ASX, that the midpoint of the range sits broadly in line with market expectations. The first half is expected to deliver about 31% of the full-year result, a steeper skew than the 34% share recorded in FY24, the most recent year without a significantly disrupted fourth quarter.

The takeaway: Flight Centre is again betting on a second-half recovery in its peak trading period to carry the year.

What is dragging on the first half?

Turner quantified a combined hit of roughly $30 million. The components:

• $16 million from moving World360 Rewards and Productive Operations costs above the line
• Up to $5 million of upfront investment in Northern Hemisphere corporate SME growth
• The absence of a $5 million bad debt reversal in Asia booked last year
• A swing in global touring from a $3.5 million profit to a forecast $1.5 million loss, driven by Middle East tensions
• Net interest expense forecast $6–8 million higher, an $11–13 million first-half drag at global HQ level

Where the result lands within guidance depends on the strength of leisure's fourth-quarter recovery, returns on corporate investment, and the group's ability to offset higher interest costs and weaker touring.

What did Turner tell shareholders?

"That outlook rests on foundations I believe are strong," Turner said. He attributed expected TTV growth to three drivers: overall market growth, citing an IATA projection that global air passenger demand will more than double between 2024 and 2050; rapid expansion in cruise, tours, luxury, foreign exchange and meetings and events; and a larger addressable market through payments, expense, wholesale FX and World360 Rewards partner revenue.

"Our challenge in recent years has been converting TTV growth into bottom-line profit growth. We are confident we can close that gap," he said. About 60% of Flight Centre brand customers this year are repeat buyers, with higher percentages in corporate and luxury.

How is trading tracking?

Chairman Gary Smith said July was the company's strongest month ever for leisure total transaction value, surpassing the pre-pandemic 2019 peak. Corporate TTV rose about 7% in constant currency in the first quarter, led by the USA at about 15% growth in US dollars; in Australian dollars, global corporate TTV grew just 1.2%.

FCM begins trading accounts with annualised spend above $350 million this month and next, and has secured a further $400 million in estimated annual spend this year, mostly starting in the second half. About 85% of year-one itineraries on Flight Centre's exclusive 12-month cruise charters are sold, alongside 35% of year two.

What did FY26 deliver?

The guidance follows a year in which Middle East hostilities cost the leisure business an estimated $60 million in profit. Group TTV hit a record $25.7 billion, up 4.7%, but underlying PBT fell 4% to $278 million. Leisure TTV rose 7.4% to $12.6 billion while leisure underlying PBT fell 21.7% to $139 million — it had been tracking toward $200 million. Corporate TTV rose 2.9% to $12.7 billion with underlying PBT up 28% to $240 million.

Shareholder returns included a 42-cent dividend, up 5%, EPS up 43% to 71 cents, a completed $200 million buy-back and a new buy-back of up to $200 million launched in July. A $450 million convertible note partly funded the Iglu acquisition, while Cross Hotels and Resorts and the Pedal Group stake sold for about $80 million.

What else is on the agenda?

Smith flagged a likely first-ever remuneration report strike, with approval expected to fall just short of the required 75%. Proxy adviser ISS recommended votes against the report and one other resolution. Smith said concerns related to how pay packages were structured and presented, not the amounts paid, and the company will report back on its response next year.

Rob Baker retires from the board after 13 years, with Gareth Turner succeeding him as chair of the audit and risk committee, and board renewal extending to a future chair transition.

With leisure posting a record July and new corporate accounts weighted to the second half, Flight Centre's FY27 case rests almost entirely on an undisrupted fourth quarter.