FLIGHT Centre shares have jumped more than 8% today after the lifting of a trading suspension and a strong take-up of its institutional capital raising.
The company this morning confirmed it had successfully raised more than $560 million, after receiving strong support from existing shareholders at $7.20 per new share, while a fully underwritten offer to retail customers will open next Wed 15 Apr to raise a further $138 million.
“We are extremely pleased and appreciative of the support we have received from both our existing shareholders and new investors,” said Flight Centre MD Graham Turner.
“The suite of initiatives announced yesterday, including the equity raising, will enable Flight Centre to trade through this period of disruption to the global travel industry, while continuing to deliver exceptional service to our corporate and leisure customers,” he said.
Flight Centre’s reaction to the COVID-19 crisis will see it go from a 944 store footprint across Australia to just 516 by the end of Jul (TD yesterday), while the overseas store network will shrink from 593 down to 222 – a total combined reduction of 800 shops.
Occupancy costs are being slashed by 52% while staff costs are declining by a whopping 69%.
The company will also reduce its $19.4 million monthly sales and marketing spend to just $1.3 million, and eliminate all non-essential capital expenditure.
Despite the crisis, the company said it is still receiving some longer-term leisure bookings, as well as interest in intra-state and intra-region travel and bookings relating to essential services and hotel isolation programs.
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Source: traveldaily