Ann: FLT FY19 Half Year Results Release, page-36

RBC analyst initiates on Flight Centre, Helloworld
Sarah Thompson and Anthony Macdonald
Updated Mar 7, 2019 — 8.26am, first published at Mar 5, 2019 — 12.15am

Flight Centre Travel Group is expected to increase altitude, with RBC Capital Markets analyst Tim Piper placing an "outperform" recommendation on the stock in a research note to clients this week.
The industrials analyst, who joined RBC in January from Bell Potter Securities, said Flight Centre's geographic and product diversification within the travel industry was reason for the bullish position.
The other cause for optimism was that Flight Centre is well positioned to grow its market share in the $1.3 trillion corporate travel market. Noting corporate travel is a fragmented market and the largest competitor globally holds less than a 10 per cent share, Piper posits that Flight Centre is in a strong position to increase its hold on the market.

RBC Capital Markets' freshly minted industrials analyst Tim Piper has started coverage on Flight Centre and Helloworld. Photo: Glenn Hunt
"Flight Centres 2020 financial year price to earnings multiple of below 15 times screens as good value against our forecast double digit earnings growth in FY20 and FY21, as well as against the ASX-listed peer group of travel services companies, which have a median P/E of 17 times," Piper said.
Piper also reckons further capital management is possible down the track, "given Flight Centre is a strong cash generator and sits on a solid balance sheet with a net cash position."

Travel companion Helloworld Travel is expected to weather soft revenue growth, according to Piper, who noted that the business had managed a strong turnaround at the hands of its current management.
Retail network growth was cited as a clear sign of a turnaround, with member numbers up close to 40 per cent from 2016 lows. However, with a P/E of 15 times and a challenging consumer market, Piper said he viewed the stock as fully valued and has initiated with a "sector perform" recommendation.
And the commendation for management is despite chief executive Andrew Burnes being embroiled in a political controversy in February after it was revealed the personally took a flight booking that was never paid from a Finance Minister Mathias Cormann.

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