Flight Centre big loss in the year to June was very much expected as the company raised new capital, slashed staff numbers and costs, accepted JobKeeper payments in a struggle to survive.
Flight Centre reported a $662 million net loss for the 12 months to June 30, compared to a $264 million profit in the same period last year. Total bookings for the financial year were down 36%.
There is of course no dividends and a payment for 2020-21 looks highly unlikely given the continuing softness.
Spending (or ‘cash burn’) has been cut to the bare minimum as the company hunkers down to try and ride out the slide in spending by consumers unable to travel overseas, the closing of international borders, and a reluctance of people to fly because of COVID-19 fears.
The lower cash burn was achieved by standing down or laying off around 70% of its 22,000-strong workforce and is shutting around half its retail stores worldwide, with the cuts concentrated in Australia.
CEO and co-founder Graham Turner said the company had lowered its cost base to 31% of pre-COVID levels and claims the company could break even with around 40% of its pre-COVID level of bookings.
The Victorian lockdowns and tough border controls in Queensland, WA, and South Australia are also adding to the pressures on the company’s survival.
Flight Centre said in its release on Thursday that demand is starting to recover in countries where borders have reopened. But with news of an upsurge in new cases in Spain, problems in France, Europe, a popular destination for Australians, is still looking problematic.
Mr. Turner said revenue so far this financial year had been ahead of expectations.
“Travel is starting to gradually recover in locations like North America, Europe, and South Africa, where domestic borders are now open, although we are also seeing heightened restrictions in Australia and New Zealand after earlier relaxations,” he said.
The shares eased 0.2% to $12.58.
