Thanks for the Morgans note
here is the Goldman Sachs report from Commsec
Flight Centre Travel Group (FLT.AX):
First Take: 2H21 underlying losses expected in line with 1H21 losses; Neutral
4 May 2021 | 9:46AM AESTFlight Centre has provided an update regarding the ongoing trading conditions and outlook on 2H21 profitability. Key takeaways are:
Sales revenue in March, (+32.7% mom) has accelerated after a subdued January and February with quarterly TTV ahead of A$1bn (GSe 2H21 A$2.2bn), an improvement vs. our expectations. Australian leisure and corporate businesses and US Leisure business has been noted as strong contributors to the improvement.
Corporate business is tracking at c. 29% of pre-pandemic levels at the end of 3Q21 (GSe for 2H21 at 28%) and Leisure businesses at c.14% of pre-pandemic levels (GSe for 2H21 14.5%). Australian corporate margins have been noted to be at lower than normal levels.
flightcentre.com.au has been noted as now generating c.30% of sales, this is largely in line with GSe expectations of e-commerce channels (globally) representing c.30% of TTV in 2H21.
Fixed cost continues to track at c.A$70mn per month while variable costs have been increasing. Jobkeeper subsidy was c. A$5-7mn per month previously.
The Group reported cash of c.A$1.5bn at the end of 3Q (ahead of GSe at the end of 2H21 at A$1.4b) with liquidity of c.A$1.1bn.
The group continues to target a return to profitability (at PBT) in FY22, GSe -A$11.9mn) and expects underlying losses in 2H21 to be broadly in line with 1H21 (GSe for 2H21 improvement of c.A$34mn vs. 1H21).
Bottomline: Overall, topline recover is noted to be recovering ahead of GSe, an encouraging read on travel recovery and FLT maintaining a strong market position. However, profit outlook for 2H21 remains below our expectations as a result of increasing shift towards lower margin e-commerce and corporate businesses with corporate especially trading at lower than normal revenue margins.
Valuation: We value FLT on a 50:50 blended EV/EBIT based SOTP (A$19.70) and DCF (A$20.20)resulting in a 12m Target Price of A$20. We are Neutral rated on FLT.
Key upside risks are: Faster-than-expected recovery in trading environment, significant market-share gains in the online channel, travel bubbles.
Key downside risks are: Emergence of COVID-19 strains which could make vaccines less effective, further decline in Brick'n'mortar travel sales, increased competition in the corporate segment.
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Last
$20.18 |
Change
0.140(0.70%) |
Mkt cap ! $4.459B |
Open | High | Low | Value | Volume |
$20.05 | $20.20 | $19.95 | $17.10M | 850.2K |
Buyers (Bids)
No. | Vol. | Price($) |
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1 | 2500 | $20.10 |
Sellers (Offers)
Price($) | Vol. | No. |
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$20.18 | 2347 | 3 |
View Market Depth
No. | Vol. | Price($) |
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1 | 2500 | 20.100 |
1 | 17922 | 20.080 |
1 | 500 | 20.010 |
1 | 130 | 20.000 |
1 | 2000 | 19.980 |
Price($) | Vol. | No. |
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20.200 | 650 | 2 |
20.210 | 3970 | 3 |
20.220 | 1800 | 2 |
20.230 | 190 | 1 |
20.250 | 2652 | 4 |
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