Not sure if it's been discussed here already, but just wondering if anyone has considered the amount of refunds Flight Centre is liable for...
Since announcing that they would waive their cancellation fees, my understanding is very few, if any refunds have actually been made. This, despite Flight Centre receiving funds from its suppliers.
If the refunds are not processed by EOFY (and going by my personal experience with Flight Centre, this is likely), the cash flow statement will show a pile of cash, which some might mistake for a healthy business (they would be holding funds that would normally be paid to suppliers, in addition to their regular profit margins).
It should be noted that Flight Centre is refunding not only its supplier fees, but also its profit margin and costs (again, based in my experience only). On this basis I would expect a commensurate impact on the P/L statement (it won't just be the impact of lost business during COVID).
Any thoughts?
FLT Price at posting:
$13.74 Sentiment: Sell Disclosure: Not Held
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