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

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.

The post Flight Centre shares plunge 7% despite return of the interim dividend appeared first on The Motley Fool Australia.

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More reading

• Flight Centre share price on watch amid 565% half-year profit surge
• 5 things to watch on the ASX 200 on Wednesday
• These are the 10 most shorted ASX shares
• 3 things ASX investors should watch this week
• Own Flight Centre shares? Here’s what you need to know ahead of its results

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.

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