Flight Centre shares plunge 7% despite return of the interim dividend

ASX 200 investors are sending the Flight Centre share price spiralling lower on Wednesday.

| More on:
A woman ponders a question as she puts money into a piggy bank with a model plane and suitcase nearby.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Flight Centre Travel Group Ltd (ASX: FLT) shares are under heavy selling pressure today.

Shares in the S&P/ASX 200 Index (ASX: XJO) travel stock closed yesterday trading for $21.73. At the time of writing on Wednesday morning, shares are swapping hands for $20.245 apiece, down a precipitous 6.8%.

For some context, the ASX 200 is down 0.1% at this same time.

This comes despite the company reporting some very solid half-year results this morning.

Here's a quick recap.

ASX 200 investors hitting the sell button

Expectations for the company's six-month performance look to have been sky-high, with investors pressuring Flight Centre shares today despite the welcome reinstatement of the interim dividend.

The company last paid an interim dividend in 2019, before suspending payouts in the wake of the global pandemic and resulting travel restrictions.

For 1H FY 2024, management declared a fully franked interim dividend of 10 cents per share. If you'd like to secure that passive income payout, you'll need to own shares at market close on 25 March. Eligible shareholders can then expect to see that hit their bank accounts on 17 April.

Combined with the reinstated final dividend of 18 cents per share for 2H FY 2023, Flight Centre will have returned $62 million to shareholders via the two dividend payments.

Judging by today's sharp sell-down in Flight Centre shares, though, that isn't enough to encourage the buyers.

Nor was the company's net profit after tax (NPAT) of $86 million, which was up from a net loss after tax of $20 million in 1H FY 2023.

Other strong metrics included a 99% year on year increase in underlying earnings before interest, tax, depreciation and amortisation (EBITDA), which reached $189 million.

And Flight Centre reported total transaction value (TTV) of $11.3 billion, which was up 15% year on year.

Perhaps, given these strong growth metrics and an optimistic outlook from management for the remainder of the financial year, ASX 200 investors had been hoping for a boost in the company's full-year guidance.

If so, they were disappointed.

According to Flight Centre, "Given that the business continues to trade in line with expectations, there is no change to the financial outlook previously provided to the market."

How have Flight Centre shares been tracking?

Despite today's big fall, Flight Centre shares remain up 8% over 12 months, not including the dividend payments.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Travel Shares

A little boy measures himself against a ruler and comes up short.
Travel Shares

Short sellers up the ante on Qantas shares

The short interest in Qantas shares rose to its highest level since the pandemic this month.

Read more »

A woman reaches her arms to the sky as a plane flies overhead at sunset.
Travel Shares

Are Qantas shares too expensive at over $6?

Is it too late to buy? Let's find out what analysts are saying.

Read more »

A little boy in flying goggles and wings rides high on his mum's back with blue skies above.
Travel Shares

Flight Centre share price lifts off amid record full year sales prediction

ASX 200 investors are bidding up the Flight Centre share price today. But why?

Read more »

Man sitting in a plane looking through a window and working on a laptop.
Travel Shares

4 reasons this fund manager thinks Qantas shares are a cheap buy

Here are some top reasons why the airline could be a top buy.

Read more »

A female cabin crew member on a place looks like she has a headache.
Travel Shares

Qantas share price sinks on $120 million 'egregious and unacceptable' ruling

ASX 200 investors are pressuring the Qantas share price on Monday.

Read more »

A young man goes over his finances and investment portfolio at home.
Travel Shares

What does the Bonza collapse mean for Qantas shares?

I’ll be keeping an eye on Qantas shares following the collapse of budget airline Bonza.

Read more »

Man waiting for his flight and looking at his phone.
Travel Shares

Qantas share price falls on reported data breach

There has been an issue with Qantas’ app and customer data.

Read more »

A happy couple sit together at an airport
Travel Shares

Are Webjet shares a good buy in April?

ASX experts are united in their views of this travel stock.

Read more »