Flight Centre (ASX:FLT) shares a ‘good long term investment’, says CEO

Here’s why Flight Centre’s boss is keeping his shares in the company.
The post Flight Centre (ASX:FLT) shares a ‘good long term investment’, says CEO appeared first on The Motley Fool Australia. –

Shares in Flight Centre Travel Group Ltd (ASX: FLT) are worth holding onto, according to the travel company’s boss.

Graham ‘Skroo’ Turner recently told the Australian Financial Review‘s How I Made It the company would likely take 3 years to get back to pre-pandemic business levels. However, Turner isn’t looking to sell any time soon.

As of Friday’s close, the Flight Centre share price is trading at $20.47, 0.99% higher than it was at the end of Thursday’s session. That brings its gains for the week to 2.45%.

Let’s take a closer look at why the company’s boss is keeping his stake.

Flight Centre CEO holds shares for growth

Insider ownership is generally a good sign that management has confidence in a business, but Turner is going a step further. He said he was now holding his Flight Centre shares for growth.  

According to podcast host Julie-Anne Sprague, in August 2018 when the Flight Centre share price was at a record high, Turner’s stake in the company was worth around $900 million.

Then, in 2020, Flight Centre underwent a $700 million capital raise to ward off the effects of the pandemic.

As a result, its outstanding shares nearly doubled. Thus, Turner’s stake in the company fell to around 8% right as its share price was tumbling.

When asked if he regretted not selling some of his holdings when the Flight Centre share price hit its pre-pandemic high, Turner stated:

It’s never a good time, particularly as CEO and as a founder, to sell. The main thing is that you have the business at heart…

The other founders… and I tended to keep our shares generally because we think it’s a good long term investment. The fact is, considering the capitalisation of the company at the moment isn’t too far off $5 billion, which considering we’re still losing money, is rather extraordinary.

To return the business to its pre-pandemic profit line might take around 3 years, according to Turner. However, when COVID-19 first halted international travel, he hadn’t expected it to be that long.

Turner said prior to COVID-19, the biggest negative impact an outside influence had had on the business slowed profits for a just few months:

COVID is nothing like that…when this happened and international travel stopped out of Australia… [we] immediately had to hibernate our costs.

Our costs were around $230 million a month and we had to get that down to about $70 million a month, which is basically what we are now.

The post Flight Centre (ASX:FLT) shares a ‘good long term investment’, says CEO appeared first on The Motley Fool Australia.

Should you invest $1,000 in Flight Centre right now?

Before you consider Flight Centre, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Flight Centre wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Flight Centre (ASX:FLT) share price dips as WA government plays hardball on borders

Leading brokers name 3 ASX shares to sell today

The Flight Centre (ASX:FLT) share price is still trading 40% below pre-COVID highs. So, what now?

These are the 10 most shorted ASX shares

Here’s why travel shares led the ASX 200 on Monday

Motley Fool contributor Brooke Cooper 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 Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!