Malmanu - thanks for the calrification - I pulled out the AR2008 and looked deeper - here is what I came up with:
My understanding of "client monies" is that it is monies that they collect from customers who have bought their travel tickets outright - FLT hen hang on to these monies for 90 days or so (max possible) - after which they have to obviously pay the travel operator (read: airline etc etc) - some of these will be on longer terms than others - I guess based on commercial arrangements etc.
So, they effectively double dip - they get a) a 40% gross margin on revenue, (1.4bn revenue 1bn cost of sales) and b) an interest / investment payback on the "float" so to speak. (about 46m "other" revenue)
They can't withdraw it and run away - as it is committed to current liabilities - hence the "restriction" - looking more closely at the numbers:
Total cash/equivelants: 739m Restricted client funds: 578m Unrestricted cash: 161m
That then balances with current assets: Available Sale Investments: 246 Receivables: 341 ..and add in the... Restricted client funds (from above): 578m = about 1.1bn
And low and behold their trade and other payables is... 1.1bn!
..more to come..
FLT Price at posting:
$6.88 Sentiment: None Disclosure: Not Held
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