Okay. Good morning, ladies and gentlemen, and welcome to our 28th annual general meeting. My name is Gary Smith, and as Flight Centre Travel Group Limited Board Chairman, I will chair this meeting. Before officially opening today's proceedings, I'd like to show you a short trailer put together to promote upcoming screenings of a new film that tells a story about Topdeck touring business. As many of you will know, Skroo and a couple of mates started Topdeck Travel in London back in 1973, and it just celebrated its 50th birthday earlier this month. So it's quite a milestone. It really was the genesis of Flight Centre Travel Group, so please enjoy this.
We were in a group known as The Animals. We were pretty wild.
We were both working as vets in the U.K. We did a couple of trips with camping tours.
We thought a better way to do that would be to have beds inside double-decker bus.
Crikey, we could do this. All you need was a bus and some passengers.
None of us knew how to drive.
None of us had bus licenses. We certainly didn't have any insurance for the passengers.
You just walk up to a good-looking girl and say, "You want to go on a bus trip to Morocco?
I said, "Look, we've got a business here.
The parties were just legendary. The whole bus would just vibrate.
Best time of my life.
We grew pretty rapidly. We were running buses all over the world. We were always spending all the money almost before we had it to buy more buses.
Our bank account is GBP 80,000 overdrawn. The phone rang at about 3:00 A.M., and it was Skroo on the line. He said, "Bill, I've actually got an idea." This just transformed the business overnight.
I hope you enjoyed that sneak peek into the Topdeck story. I think it gives a great insight into the success of Flight Centre Travel Group and the unique things that drives this thirst for growth and also an insight into the unique culture of the organization. So, it's an amazing story. For those who are interested, the full film will be screened at various locations throughout Australia over the next couple of weeks. So if you are interested, please let us know, and we could send you some details. So moving on to our official AGM duties. As we have the necessary quorum, I declare the meeting open. This meeting is a hybrid meeting with shareholders able to attend either in person or online by the Computershare meeting platform.
Shareholders online can listen to our live webcast and watch our presentation. They can also ask questions and submit votes online. Before introducing our directors, we would like to acknowledge the traditional owners of our country throughout Australia and recognize their ongoing connection to lands, waters, and communities. We pay our respects to Aboriginal and Torres Strait Islander elders, past, present, and future, and support the continuation of cultural, spiritual, and educational practices. I would now like to introduce our directors, starting at the other end, Rob Baker-
Morning.
Colette Garnsey, John Eales, Kirsty Rankin, our CFO, Adam Campbell, Graham "Skroo" Turner, and our Company Secretary, David Smith. We're also joined today by various senior executives of the company, including Melissa Elf, our Corporate Chief Operating Officer, Tom Walley, our Corporate Traveller Global Managing Director, Andrew Stark, our Flight Centre Brand Global Managing Director, and Danny Peters, our Chief Information Security Officer. Haydn Long, our Head of Investor Relations, is sitting right up the back. Finally, our auditor, EY, is represented today by Audit Partner Alison de Groot. Given this is a hybrid meeting, there are a few matters I need to run through, so please bear with me.
Only shareholders, representatives and attorneys of shareholders and proxy holders who are attending in person today and holding blue admission cards and those attending online, are entitled to ask questions or vote during this meeting. For attendees attending in person, to ask a question, you will need to raise your hand when I invite questions at the appropriate time. Online attendees can submit questions at any time by selecting the Q&A icon on your device. Select the topic of your question, that your question relates to from the dropdown box, then type your question and press the Send button. Online attendees can also ask verbal questions by following the instructions written below the broadcast window. Although online shareholders can submit questions at any time, I will address those questions only at the relevant time during the meeting.
If we receive multiple similar questions on any topic, we will try to group them together. I'll ask Haydn, who will be our moderator today, to read out the questions at the appropriate time. Voting today will be conducted by a poll on all items of business, and I'll open voting shortly. For attendees present in person, on the reverse of your blue admission card is your voting paper and instructions. You will need to follow the instructions, mark a box beside the motion on the voting paper to indicate how you wish to cast your vote, and then lodge it in the ballot box before voting closes. Proxy holders here in person have attached to their blue admission cards a summary of their proxy votes, which detail their voting instructions. By completing the voting paper, you will be deemed to have voted in accordance with those instructions.
The proxy holders who are entitled to cast any open votes will need to mark a box beside the motion to indicate how you wish to cast your open votes. For attendees online, a polling icon will appear on your device when voting opens. Clicking on the icon will bring up a list of the motions and present you with voting options. You simply select one of the options for the relevant motion to cast your vote. There is no need to hit a Submit or Enter button, as the vote is automatically recorded. You may change your vote at any time up until I declare the meeting voting closed. All attendees, whether online or in person, may submit votes at any time from when voting opens until I declare that voting is closed.
Finally, I appoint Lewis Brimlow of Computershare Investor Services to be the Returning Officer and to conduct the poll for this meeting. I will now declare voting open on all items of business. We'll start today's meeting with the chairman's address, after which I'll invite Skroo to address the meeting in relation to our plans and prospects for financial year 2023/2024. We'll then move to the formal business for the meeting before finishing with general questions from shareholders. I'll now proceed with the chairman's address. In an improved trading environment during the 2023 fiscal year, we delivered material uplifts in total transaction value, or TTV, profit and other key financial metrics. As you can see on this slide, TTV more than doubled year-on-year to AUD 22 billion, while underlying earnings before interest, tax, depreciation, and amortization, or EBITDA, reached AUD 301.6 million.
A circa AUD 485 million year-on-year turnaround. On a profit before tax, or PBT, basis, we achieved an underlying AUD 106 million profit and a AUD 70 million statutory profit before tax. This strong profit recovery was underpinned by significant leisure and corporate rebounds, particularly after governments globally removed travel restrictions. Financial highlights included the 112% TTV uplift, which delivered our second-best full-year result, behind only financial year 2019. Margin improvement, highlighted by a 70 basis point revenue margin improvement and a record low 9.6% underlying cost margin. Solid cash generation and cash flow, which paved the way for ongoing investment in key growth drivers, a fully franked AUD 0.18 per share final dividend, and further capital management initiatives early this fiscal year.
As expected, results were heavily second-half weighted, with almost 70% of underlying group EBITDA generated during the six months to June 30. This reflects normal seasonality. Key booking periods typically occur during the second half of a fiscal year. But as well as that, there was improved market dynamics, specifically airline capacity growth and fewer restrictions as the year progressed. During FY 2023, Flight Centre successfully executed its key global strategies, as outlined on this slide. Key outcomes included: maintaining a lower cost base. Operating expenses were circa 75% of FY 2019 levels. Higher productivity, with TTV per full-time employee increasing by 52% compared to FY 2019. And converting 38% of incremental revenue growth group-wide to underlying EBITDA, with leisure and corporate converting at 47% and 41% respectively.
Our corporate business continued to outperform, comfortably outpacing broader industry recovery and delivering a record AUD 11 billion in TTV. This represented 96% year-on-year growth and an almost 25% increase on the previous TTV milestone of AUD 8.9 billion in FY 2019. With new records established in all four geographic regions in which we operate: the Americas, Australia, New Zealand, Europe, the Middle East and Africa, or EMEA, as we call it, and Asia. Growth was again driven organically through high customer retention rates and a large pipeline of account wins, which were the two key objectives of the Grow to Win strategy that was initiated at the start of the pandemic. In the large market sector, FCM secured new contracted accounts with annual spends in the order of AUD 1.6 billion from other travel management companies.
More than half of Corporate Traveller's wins, which are uncontracted customers in the SME sector, were previously unmanaged. Underlying corporate EBITDA reached AUD 190 million, a circa 3,000% improvement on the prior year, despite a significant pre-investment in people to win accounts, to design and implement travel programs, and to onboard and service large volumes of new business. We also invested significantly in our leading proprietary technology suite, with new features added to the FCM Platform, which is now in use by more than 2,700 multinational customers in 86 countries. Corporate Traveller's Melon platform, now being used by more than 1,700 SME customers in North America and the United Kingdom. Our leisure TTV increased 162% to AUD 10 billion at improved revenue and cost margins.
This margin improvement helped drive a more than 200% underlying EBITDA increase to AUD 172 million. With all four business categories, mass market, independent, luxury, and complimentary, profitable for the year. Following a major transformation initiated pre-pandemic and fast-tracked during the crisis, leisure has reemerged with a leaner cost base and a scalable brand and channel stable.... A number of these brands and channels delivered record TTV, including the online businesses, which contributed circa AUD 1.6 billion in TTV, and that's more than double the AUD 752 million in FY 2022. The independent category, TTV more than tripled globally to AUD 1.5 billion, and the luxury collection, which includes the recent acquisition of Scott Dunn and Luxperience acquisition.
To acquire Scott Dunn, we initiated AUD 180 million institutional placement and a 40 million share purchase plan for our shareholders. While the SPP was ultimately upsized by 50% to AUD 60 million following very strong interest, a significant scale back was still required. Once again, we thank you, our shareholders, for your support. Our balance sheet remains very strong, as highlighted on this slide, which shows almost AUD 1.4 billion in cash and investments at year-end. Given this strong position, the directors returned almost AUD 40 million to shareholders via the fully franked AUD 0.18 per share dividend that I referred to earlier.
This was our first dividend for 4 years, and it took shareholder returns related to the year to a healthy 10.8% when combined with our AUD 0.69 share price increase from AUD 17.36 to AUD 19.05 during FY 2023. Improving shareholder returns is a priority as our recovery gains momentum. In addition to this dividend payment, we have initiated a new capital management policy designed to create shareholder value by using free cash flow to reinvest in the business, to drive longer-term growth through capital expenditure, and where appropriate, mergers and acquisitions, and also to deliver ongoing benefits via a combination of dividends and share or convertible note buybacks to reduce future dilution and increase earnings per share.
Under this policy, which is summarized on this slide, we intend to allocate 50%-60% of net profit after tax to dividends or capital management initiatives from this year, subject, of course, to the business's anticipated needs at the time. In addition to introducing this policy, we recently bought back notes with a AUD 75 million face value, an opportunistic move to capitalize on what we thought was an undervalued share price. We'll continue to evaluate opportunities to reduce our remaining note balance in the short to medium term. While we are focused on maintaining a structurally lower cost base, we're also committed to investing in key areas that will deliver stronger future returns. Last year, for example, we invested significantly in people. We're now fully staffed in corporate, and we're recruiting at normal levels in leisure.
Our diverse global leisure and corporate networks, as we reopened hibernated shops, brought new products to market, and in some instances, rolled out new offerings in growth sectors like meetings and events, cruise, and foreign exchange, and also technology to advance productivity, the customer experience, and to reduce costs. Cybersecurity and data protection are at the forefront of our thinking. We have built and retained strong internal capabilities and have augmented this with specialist external expertise as we've developed and fine-tuned our systems and response plans. Group-wide, we are driving innovation by investing in new ways to deliver a better customer experience and achieving our sales and savings objectives. Leveraging artificial intelligence, machine learning, and robotic process automation to ensure responsible use of our AI, our efforts are overseen by an AI governance board, which is headed by one of our directors, Kirsty Rankin.
A Generative AI center of excellence is now in place to centralize our development and deployment of AI-related innovations. Our first outcome of this effort, a ChatGPT-powered private content creation tool in the FCM Extension product, is illustrated on this slide and begins customer activation this month. To give you an example of its possible uses, customers can dynamically generate a list of top 10 activities in key cities, totally customized to their preferences, instead of having to manually input and maintain a list. Our leisure business is also trialing several initiatives using Generative AI technology to improve consultant productivity and customer experience. For example, we have deployed AI-based travel recommendations to customers to capture a greater share of wallet and increase the number of components across our digital itineraries.
In addition, we have enabled a secure and intelligent plugin for agents, allowing them to use the technology as part of trip planning. I think it's fair to say our total focus with AI is really around what's good for our customers. We really want to make sure what we do is right for our customers. Today, I would like to update you also on our progress in another very important area of investment and focus, sustainability and ESG. That's environmental, social, and governance frameworks. Throughout FY 2023, we broadened our ESG approach to ensure engagement across our key focus areas: our people, suppliers, industry partners, and customers. Our key achievements were outlined at our full year in August and again on this slide.
We have developed sophisticated tools for corporate customers, including comprehensive carbon reporting within travel programs that we tailor for them, offset programs through Trees4Travel, point-of-sale details of the carbon impact of flight and rail options within our proprietary booking tools and within third-party products, and FCM consulting services to help customers track and set sustainable travel goals. In terms of reporting on our targets and achievements, we're now working on our first sustainability report post-COVID, and through an internal working group, we're evaluating requirements in the light of the International Sustainability Standards Board's new disclosure standards, which apply to us and most large public companies from financial year 2024/2025. We also plan to reduce Scope 1 and 2 emissions under the Science-Based Targets Initiative framework, and currently await validation of our plans from that governing body.
Before handing over to Skroo, I'd like to thank a number of people and groups for their invaluable contributions to our recovery. Firstly, our people. Our expert travel advisors and support teams continue to work tirelessly to create and deliver a compelling customer offering, and there's a number of them in the audience today who are not only working with, for the company, but are shareholders. So, welcome. While we don't typically talk about honors that we win, our people are instrumental to our success at events like the World Travel Awards. In 2023, our company-owned businesses and corporate licensees won nearly 30 World Travel Awards, including leisure honors in the major countries that we operate in, and flagship regional corporate titles for North America, Europe, Asia, and Oceania.
We're also in the running for major global awards in the corporate FCM, leisure, with Flight Centre brand, and luxury Scott Dunn sectors later this week. Secondly, I'd like to thank my fellow directors, who continue to provide invaluable guidance and oversight. And thirdly, our senior leadership team, which is headed by Skroo, and now includes the leader of our Asia business, Bertrand Saillet, and our Head of People and Culture, Lincoln Turvey. On that note, I'd like to now invite Skroo to address the meeting in relation to the current financial year.
Thank you, Gary. That was very well said. Yeah, well done. Yeah. Good morning, everyone. When we talked about our financial year 2024 at our result announcement in August, we said we expected leisure and corporate sales growth as both sectors progressed towards full recovery, which was expected to be late next calendar year. Stronger profit margin as revenue margin increased and cost margin decreased, and better market dynamics for travelers as competition and capacity improved. So some two and a half months on, these expectations remain relevant. And I'm pleased to report that we have started the year strongly, with AUD 6 billion in the first quarter of TTV, and which is our second strongest start to a year, with corporate TTV again at record levels. Continued margin improvement, leading to a very strong first quarter profit uplift.
Positive signs in relation to market dynamics, although there is certainly scope for further improvement in terms of competition, capacity, and ultimate price, ultimately pricing. As you know, we've had quite a few arguments with the government about the rejection of capacity and obviously keeping airfares far higher than we like. As Gary mentioned, we've also returned almost AUD 40 million fully franked dividends to shareholders and brought back significant parcel of the 2027 convertible notes. These moves highlight confidence in both our current position and our outlook as the industry continues to recover, and we presume returns to the typical growth trajectory of 3% or 4% annually. While there'll inevitably be short-term cyclical changes to overcome, the industry outlook is pretty bright, with IATA projecting 3.4% compound annual passenger growth globally through to 2040.
This morning, there are some insights into our progress in and prospects for financial year 2024, starting with an update on our first quarter progress. The first quarter results, TTV increased about 20% or more than AUD 900 million compared to the same period last year, to AUD 6 billion, just below a record, AUD 6.2 billion result we achieved four years ago in 2019. Revenue growth at 38% comfortably outpaced TTV growth, leading to a 160 basis point revenue margin improvement to 11.2%. This improvement across both leisure and corporate businesses was driven by strategic initiatives relating to pricing, the attachment of higher margin products, and ancillary sales and improved supplier margins.
While revenue margin increased strongly, underlying cost margin, excluding touring costs of sales, was fairly flat, which led to healthy underlying first quarter profit margin and profit growth. Our underlying PBT increased more than 500% to AUD 54 million, at an underlying PBT margin just under 1%, compared to an AUD 12.9 million loss during the first quarter in 2023. Underlying EBITDA more than tripled to AUD 102.3 million, compared to AUD 33.1 million during the equivalent first quarter last year. We again converted about 40% of incremental revenue growth to underlying EBITDA, with leisure and corporate converting at 47% and 45% respectively. We expect further improvements in corporate in particular, as its productive operations initiatives gain traction.
First quarter, the corporate travel TDV exceeded AUD 3.1 billion, another record, as we continue to outpace the broader sector's recovery, with activity across the industry globally reaching 72% of pre-COVID levels during the period. This is based on the MIDT data for the first quarter of 2023, as a percentage of first quarter financial year 2019. The organic growth that has fueled our rapid recovery to date has continued with FCM securing new contracted accounts, with projected annual spends in the order of AUD 565 million already won this year, including good recent wins in North America, our largest corporate market, and in the UK. In addition, Corporate Traveller has won uncontracted accounts with projected annual spends of AUD 315 million, taking total wins to about AUD 900 million in this first quarter.
Tech investments are continuing to help these wins, with our new digital platforms helping to differentiate our offerings, in addition to improving consultant and customer productivity. Our leisure business again recovered well, building on solid momentum from late last year, to deliver almost AUD 2.7 billion in first quarter TTV, about 20% growth on the equivalent quarter last year. All leisure categories were again profitable, and the business overall has become more diverse, with the independent luxury and complimentary pillars contributing 45% of TTV. Although about 15% of first quarter leisure TTV was generated online, largely via FlightCentre.com and the Jetmax and StudentUniverse businesses.
Bear in mind, with leisure, we shut down a huge number of our network during COVID, which most of you have probably heard of by now, that it finished a couple of years ago. But we're still feeling the effects of that. In Australia, FlightCentre.com customers typically book the low-margin, point-to-point domestic flights. And to improve margin and ultimately profitability within this channel, new products are being made available, including a hybrid Captain's Pack, which costs AUD 10 for domestic flights and AUD 40 for international, and also Flight Centre Holidays and air and land packages.
Underlying first quarter leisure and corporate profit margins were about 1.5%, with several brands, including Corporate Travel, Flight Centre Business Travel, Scott Dunn, Travel Associates, and the My Holidays brands, plus the EMEA geographical segment, above the 2% target that we're working towards as a group. As expected, though, first quarter group profit margin was lower than leisure and corporate because of losses in our other segment. This segment includes unallocated head office expenses and businesses that sit outside our leisure and corporate divisions, such as Topdeck, the Pedal Group, Pedal Cycle Group, joint venture, loss-making US wholesaler GOGO, and Dubai-based airfare aggregator TPConnects. For the financial year 2024 guidance and outlook. In terms of 2024 guidance, we currently expect underlying PBT between about AUD 270 million and AUD 310 million.
The midpoint, which is about AUD 290 million, represents about 175% growth on 2023 and is broadly in line with current market consensus. Underlying EBITDA is expected to be between AUD 460 million and AUD 500 million. Now, this is almost a 60% growth on AUD 302 million financial year 2023 underlying result, and at that midpoint, which is AUD 480 million. While profit and sales projections are difficult to predict in a recovery, we are comfortable with the market's expectations at this relatively early stage, and recognizing our traditionally large second half, earnings skew, which is expected to increase this year and into the future because of Scott Dunn's very heavy second half product weighting.
Second quarter PBT will be less than the first quarter result, reflecting the traditional December holiday period booking slowdown. This is ahead of the traditional uplift in the new calendar year, which drives our heavier second half weighting. One of the biggest impediments to recovery so far has been the lack of airline capacity and competition, and this was particularly relevant with the rejection by the Albanese government of the Qatar extra 28 flights that Qatar wanted to bring in. This means the government has deliberately tried to keep airfares high. We don't know why, but I know in the travel industry, the Minister for Transport, Minister King, is now known as the Minister for Higher Airfares. But hopefully, this will change.
The good news is conditions are gradually improving, which is expected to benefit travelers in the, as the year progresses, although we're still concerned with that lack of available seats. This is particularly true through the Middle East. And Qantas, Emirates, and Etihad in the UAE are only using about half their allocated seats into Australia, which, which is obviously, again, keeping the airfares very high. According to IATA, international capacity reached 90% of comparative pre-COVID level in September 2019, in September 2023. Our data indicates 88% recovery in Australia at the end of last month, with further growth expected in the months ahead, as several key partners ramp up services, including Singapore Airlines and Emirates and Qantas, as well as Cathay Pacific.
The real thing, of course, is that over three years, the extra demand is probably 3 or 4% a year. So we're probably through the Middle East only, still only at about 60% of actual capacity needed there at the moment. Whereas on the North American routes, it has improved more than that. Another positive development, the eight Chinese-based carriers have all returned or resumed Australian services, along with the China Airlines out of Taiwan and Hong Kong's Cathay Pacific. We welcome further additions and strongly support the Turkish Airlines application, which is in train at the moment, we believe, and obviously Qatar's expansion plans. Particularly in light of the fact that particularly to Europe through the Middle East, we are struggling finding seats for our customers.
As I alluded to earlier, we're starting to see some attractively priced travel deals, which are highlighting now in travels, Flight Centre's brand's Big Red Sale, our first global leisure marketing campaign since before the pandemic. You can see some of these deals on the screen now. We are, of course, keeping a close eye on macroeconomic conditions and world events, particularly, as you know, about the Middle East and the Ukraine issues. While we continue to monitor developments in relation to these tragic events and hope for a speedy resolution, we don't currently expect significant ongoing impacts on our business. Historically, travelers have tended to adjust plans to bypass affected areas during times of unrest, and overall travel volumes have not been materially impacted for prolonged periods. This is from a historical point of view.
Similarly, macroeconomic conditions have not historically deterred large numbers of travelers from taking off overseas to make the most of their holiday time. Despite recent interest rate hikes in some countries, travel demand remains fairly healthy, with industry volumes generally up on prior year, but below historic highs, as expected, given we're only 12 months away or so away from the anticipated timeframe for full recovery. This is reflected in the latest ABS statistics released yesterday, which shows first quarter short-term resident outbound departures are up strongly year-on-year, but still remain about 9% below the same level in 2019. We believe the ongoing demand that we are seeing reflects our leisure customer base's leverage to demographics that are less affected by mortgage stress, specifically the luxury sector and the baby boomers.
A relatively wildly, widely held customer view is that travel is non-discretionary, a priority product that customers are prepared to budget for and invest in most years. Recent surveys paint a positive future picture, with the Global Business Travel Association finding about 70% of corporate travel buyers expect to increase or maintain their travel budgets through 2024. Travel's resilience is further underlined by consistent year-on-year market growth pre-COVID. Downturns have been relatively rare, short-lived; in some cases, have been followed by sharp rebounds, as illustrated in the Australian examples on the screen, and it again highlights the absolute importance of governments unleashing their restrictions, particularly through the Middle East.
In 2009, widespread job uncertainty during the global financial crisis led to short-term resident departure decreases from January to March, followed by modest increases over the next quarter, then a sharp rebound for the rest of the year, as illustrated on the left here. We saw similar trends in 2003, reflecting the combined impacts of the U.S. invasion of Iraq and the SARS outbreak. After a turbulent first half, travel stabilized before taking off late in the year, and then by about almost 30% during 2004, as you can see in this chart on the right. Looking within our businesses are also clear opportunities for improvement. In corporate, we plan to grow transaction volumes, which we are consistently doing. We intend to increase revenue per, per transaction and decrease cost per transaction.
To achieve these objectives, CEO of our global corporate, Chris Galanty and his team, are deploying a global productivity initiative headed by Chief Operating Officer Melissa Elf, who's I think, I think she's in the room somewhere. And focusing on digitalization and streamlining processes and non-market facing systems so that we can ensure we can deliver the scale benefits we expect in that corporate-global corporate travel. Leisure CEO James Kavanagh's priorities are global expansion of core offerings, which is obviously the Flight Centre brand, investment in customers, leveraging assets, and delivering scalable, profitable growth. Within leisure, Ignite, which operates the highly successful MyCruise and MyHolidays, MyFiji, and other businesses, as well as Travel Money, which is foreign exchange business, are currently among our best performers.
Money, in particular, is growing rapidly, generating high, higher-than-expected margins and bringing new products to market, including Click and Deliver and Click and Contact services, which are appealing to a younger customer base of the 25- to 45-year-olds. This is compared to the branch in-store. I think we have about 70 stores reopened now, average age of about 55+ . In our support ranks, we're also developing a global business services structure, headed by CFO Adam Campbell, to deliver more streamlined and efficient services. So if you want to talk to Adam about his global business services after this, yeah, I'd be happy to. Our Global Head of People and Culture, Lincoln Turvey, is a key investment in our people being our greatest asset, and also our ability to more efficiently and effectively manage a global function of people and culture, size, and importance.
Lincoln will work alongside Adam to drive the GBS model over the next year. We'll continue to focus on organic growth as we're doing by reintroducing the cruise brand, Cruiseabout. Pardon me. Expanding travel money and exporting brands to new geographies, but we will also acquire assets that are aligned with our strategic objectives. Scott Dunn is a good example of this alignment, as it fast-tracked our growth in an attractive and resilient sector, which is the luxury travel sector, while delivering very solid returns. Since acquisition, Scott Dunn has also established a broader platform for future growth by developing a U.S. East Coast presence within, Flight Centre's, Flight Centre Travel Group's new New York corporate hub and unlocking additional revenue synergies by wholesaling its products within Flight Centre Travel Group.
Looking further ahead, we continue to target the 2% underlying profit margin for financial year 2025. This aspirational target was set during the pandemic, and it was last achieved in 2015, although subsequently a number of near misses. Pardon me, that's my Paris cough. Returning to a 2% a decade after we last year will not be easy, but we see a clear path towards achieving that target. By further revenue margin improvement, a trend we are now seeing, lower cost margins via ongoing cost discipline, further productivity enhancements, particularly in corporate, and benefits flowing from the GBS area, Global Business Services, area creation. While we're very focused on delivering that 2% margin, it's not a short-term target that we'll chase down at all costs simply to ensure we receive it, we achieve it in 2025.
Our objective is to deliver a profit margin, sustainable long term, as our business continues to grow and evolve. Which means we'll not sacrifice future prosperity by abandoning strategic investments like TPConnects, Cruiseabout, CruiseHQ, other wholesale businesses that are currently starting up or scaling up, or slowing growth in businesses that are profitable and large TTV generators, but potentially dilutive to overall margins in that 2025 year. Travel Money, our independent agent model, and FCM currently fall into this category, with FCM generating almost one-third of the first quarter TTV at a lower-than-normal profit margin, while large volumes of new businesses are onboarded. So in conclusion, we've started 2024 fairly well and have laid solid foundations for the full year and for the longer-term future, while also delivering tangible benefits to shareholders in the form of the recent dividend and convertible note buyback.
While the market overall is still in recovery mode and experiencing some macroeconomic and political uncertainty, we're delivering solid year-on-year growth and see clear improvement opportunities in both leisure and corporate sectors. I'm sorry again. We are well placed to capitalize given our diversity, our balance sheet, and strong brands and people networks, which continue to deliver compelling offerings to our customers. Thank you again for our, your support. I now invite Gary back. Thank you, Gary.
Thanks, Skroo. I think Minister King will be thrilled to hear of her new portfolio title. We'll now move to the meeting's formal business. Details of the proxies received prior to the meeting will show on your screens before each resolution. The notice of meeting has been circulated to all shareholders registered as at 13th October 2023, and I'll take that notice of meeting as read. The minutes of the previous annual general meeting, which was held on 14th November 2022, were approved by the board and signed by the chair of that general meeting. Minutes are available for inspection at the company's registered address. We now move to the company's reports and accounts. The financial report, directors' report, and the auditors' report have been forwarded to shareholders in the annual report and are tabled at this meeting.
The first item of business is the director's re-election of John Eales as a non-executive director of the company. In accordance with the company's constitution, directors may not hold office past the third AGM following their appointment, excluding the managing director. At least one director retires each year and offers him or herself for re-election. Accordingly, John retires and offers himself for re-election today. I now invite any questions on this item from shareholders attending in person today. That's if you're in the room. If there are no further questions from shareholders attending, I ask Haydn if there are any written online questions?
... No, Gary, no online questions on this one.
Haydn, are there any verbal questions on the line?
Operator, any verbal questions? I think that's a no.
I think that's a no. We'll take that as a no. As there are no further questions, I note that the number of proxies received prior to the meeting should now be showing on your screens. As I mentioned earlier, voting today is being conducted by way of a poll, and you may cast your votes on all items now. I'll now move to the next item on the agenda. The second item of business is the adoption of the directors' remuneration report, as presented in the annual report. Just a reminder that the key management personnel listed in the annual report and their closely related parties are not permitted to vote on this resolution. I now invite any questions on this item from shareholders attending in person today. If there are no further questions from shareholders attending in person, I ask Haydn if there are any written online questions.
Thanks, Gary. Yes, we do. We have a question from Stephen Mayne, which applies also to the next question. What Stephen's asking is: "Thank you for disclosing the proxy voting data before the AGM, et cetera. This is best practice, and there are no protest votes of note this year. When disclosing the outcome of voting on all resolutions today, including the REM report, could you please advise the ASX how many of your shareholders voted for and against each item, similar to what happens with a scheme of arrangement? This will provide a better gauge of retail shareholder sentiment on all resolutions and was a voluntary disclosure initiative adopted by the likes of various other companies, to paraphrase, over the past two years. The ASX itself and Qantas both did it for the first time this season.
You've got the data, so why not let the sun shine in?
I don't see any reason why you wouldn't let the sun shine in, Mr. Mayne. I'll ask David Smith, our Company Secretary, to comment on that.
Yeah, Gary, that's something we'll be able to do later today when we launch the results with the ASX.
Okay, so that will be done later today. Any other questions, Haydn?
No, that's it on this resolution. There's also no questions on the phone.
Thank you. As there are no further questions on that, I note the number of proxies received prior to the meeting, which should now be showing on your screens. As I mentioned earlier, voting today is being conducted by way of a poll, and you may cast your votes on all items now. I now move to the next item on the agenda. The third item of business today is approval to refresh the placement capacity. Approval and ratification is sought for all purposes, including for the purpose of ASX listing rule 7.4, for the issue of 12,328,768 fully paid ordinary shares, pursuant to the institutional placement announced by the company to the ASX on 31 January 2023. I now invite any questions on this item from shareholders attending in person today.
If there are no questions from shareholders attending in person, I ask Haydn if there are any written online questions.
Thanks, Gary. We do have two questions from Stephen Mayne, again, on this one. I'll read you the first one. "Placement participants are not meant to vote on the following placement refresh resolution, so why have only 19 million proxy votes been abstained on this item? Surely, some of the 98 million votes in favor of this item have come from institutions which participated in the AUD 180 million placement. Also, there was a 7% protest, against this item, presumably from shareholders who really didn't participate and got diluted without compensation. Did any of the proxy advisors recommend against this item?
I might ask our Company Secretary, David Smith, to address that question.
Yeah. Thanks, Haydn. Look, I can confirm that voter exclusions have been applied to Resolution 3, as required by the Listing Rules , Listing Rules 7 and 14, and the ASX Guidance Notes . So it has all been done as required.
Thank you, David. Haydn, I think you said there were two questions.
Yeah, question number 2: "The placement only represented 6.2% of issued capital, so why are we refreshing our placement capacity to the maximum 15% in a 12-month period, when based on current prices, we'd be free to do a AUD 600 million placement by February next year anyway? Does this signal that we're thinking about doing another placement, and why not raise capital pro rata and treat all shareholders equally?
Yeah, thank you for that question. It's a simple answer. We're just keeping our options open. We have no intentions to do any capital raisings over this period, but we saw no reason why not to at least refresh capacity in the event that something like another global pandemic, heaven forbid, would happen again. So, we've learned a lot through COVID, and we decided that it was worth just refreshing that capacity.
That's it, Gary, no further questions on the phone either.
Okay, as there are no further questions, I note that the number of proxies received prior to the meeting should now be showing on your screens. As I mentioned earlier, voting today is being conducted by way of a poll. You may cast your vote on all items now. We'll now address questions and comments submitted on the annual financial report, directors' report, auditors' report, or on the company's management. As mentioned earlier, Alison de Groot from EY is available to answer questions about the audit's conduct, the audit report's preparation and content, the accounting policies adopted by the company in relation to the financial statements preparation, and the auditor's independence in relation to the audit's conduct. Are there any questions from shareholders attending in person today? Please raise your hand, and we'll get a microphone to you. No?
I know we have some online, so I'll move. If there are no questions from the floor, I'll move to Haydn for any questions online.
... Thanks, Gary. We do have a few questions from Stephen. First question: The three founders terminated their preemptive rights agreement earlier this year, meaning each could sell down without offering their stock to the other founders. As the only founder still working in the business, could Skroo comment on why it took so long to do this, and what drove the decision? Did it require all three founders to agree, and how are you all getting along these days?
Thanks for that question, Stephen. I think that's somewhat unreasonable, in that three investors who for 50 years have co-invested have made some decisions to change their investment policies. I think, good on them. That's fair enough. But I will ask Skroo if he has any comment, but if he didn't, I'd fully understand.
Yeah. I think it was just an oversight, wasn't it, Haydn? We forgot about it for about 10 or 15 years, and we got around to it and decided that the preemptive rights were no longer necessary. So there wasn't anything, anything sinister or anything behind it or opportunistic.
Question number two, Gary. The 2019 annual report stated that we had about 22,000 shareholders, and four years later, the 2023 annual report says we have 92,000 shareholders. However, when announcing the SPP outcome in February, we said there were 104,719 eligible shareholders. Which is correct, and why are we seeing such an extraordinary growth in retail shareholder numbers? Is there a staff share scheme element? Are there particular brokers promoting the stock, or are customers so impressed with your service that they keep buying shares in our company?
I like that last one. You know, I don't really have any... I can't shed any light on that. It is quite remarkable, the growth in the retail shareholder base, and I'd like to think they are all happy customers who want to share in the growth of the company and the profits and dividends and capital growth that that will drive. But I will ask our Company Secretary if he can shed any light on that question.
Yeah. Thanks, Haydn. Look, the difference will primarily be the employee shareholders. Anyone who participates in our employee share schemes holds their shares through a trust. The trustee will represent as one shareholder, and then each employee holds onto that. So they won't necessarily show up in the shareholder numbers, but they were eligible to participate in the share purchase plan. So that'll be the primary reason for that difference.
Just to give shareholders some further color around that one, too. I think probably at the moment, we've got 17 analysts who cover us, and most of them have buy recommendations, so that will partly be contributing, as alluded to in Stephen's question. We also have our share plan now as a top 20 shareholder, so lots... And the— Sorry, there was one other. Oh, also, the share price for retail shareholders tend to be more attracted to the when you have a lower share price than when we had a AUD 70 share price a few years ago, pre-COVID. Moving on to the next question. Placement participants are not meant to... Oh, sorry, we've done that one. Stand by. Here we go. Yep.
Flight Centre has a history of doing dilutive capital raisings. This is again from Stephen Mayne. I think all the questions that we have today are from Stephen Mayne. Flight Centre has a history of doing dilutive capital raisings, and even the three founders suffered acutely during COVID when we raised AUD 700 million, including a AUD 282 million placement at AUD 7.20, which diluted all non-participants. And a AUD 418 million one for 1.72 non-renounceable entitlement offer at the same price, which was a 27.3% discount to the last traded price of AUD 9.91.
The three founders, Skroo, Geoff Harris, and Bill James, went into the crisis owning a combined 42% of the company, and collectively only took up AUD 25 million of their AUD 175 million entitlement, badly diluting themselves as the total number of shares on issue almost doubled. The AUD 138 million retail offer finished 23% short, attracting AUD 106 million from 13,116 applicants, including AUD 14 million through the needlessly constrained oversubscribing facility, which was capped at just 25% of entitlement. In hindsight, does CEO and co-founder, Skroo, have any regrets about this capital raising, and would he have done anything differently?
Can I just... I'll pass to Skroo on that, but can I just start by saying the company doesn't have a history of dilutive capital raisings. Little thing called COVID came along, and that's what's driven the dilutive capital raisings, and we were having to do that for one simple reason, and that was survival. So I'll pass to Skroo for any additional comment.
Yeah, I think, you know, Gary said most of it. We, with, with COVID, obviously, it dramatically affected travel and a lot of other industries. And, you know, the, you, you will have known the borders were shut, about March 12 or something in, in, in 2020. And we had a, yeah, we had a very short period of time to be able to raise enough money. At the time, when we, when the borders were shut and lockdowns started to happen, we had costs globally of about AUD 225 million a month. We had to get that down to AUD 65 million a month in a matter of weeks. And, and we had to raise money very quickly as well.
So, I think generally, the way it was done, you know, I certainly disagree with the shutting of borders and having lockdowns with a virus like COVID, and it does worry me what might happen if we get a really serious virus. You know, if we get a serious that affects other than 80- and 90-year-olds or even 70-year-olds, I suppose, some of them. Yeah, but it is the government actions that caused this, and unfortunately, we had no choice but to raise money as we did. And I think, it's a credit to the people in our team, you know, whether it's in our treasury, in my leadership team and the board, that we actually managed to survive this devastating event.
A lot of companies haven't in the travel and tourism industries. But it's a good lesson for us, and I think it'll be really good if the government actually learns from their mistakes, and they've made some terrible mistakes over the last three or four years, for the next virus that comes along, because it could be a serious one.
Thank you, Skroo. Haydn, further questions online?
Yeah, last question, Gary, on—unless I've missed any. Flight Centre announced a AUD 180 million dollar placement at AUD 14.60, a 7.8% discount to the previous close of AUD 15.83 on January 31 this year to fund the Scott Dunn acquisition. This was followed by a AUD 40 million SPP. The SPP was swamped by AUD 350 million in applications from 19,304 of the eligible 104,719 shareholders. So the board lifted the cap to AUD 60 million and imposed a pro rata scale back, with everyone getting a minimum AUD 511 worth of new shares. The stock is currently at AUD 19.45, so did we really need to do the AUD 250 million dollar placement and SPP?
In hindsight, wasn't it dilutive? Also, did we really need to pay Macquarie and UBS, 2% management fee or some AUD 3.6 million when they were on risk for less than 48 hours?
There, there's a lot in that. I'll attempt to answer that comprehensively. That acquisition has been a very successful acquisition, if I can start by saying that, so far. I actually visited their business a couple of weeks ago in the UK, and I was very impressed. They're certainly trading up to where we had hoped they would. The acquisition was earnings accretive. It was very strategic for us. We wanted to move into more luxury travel, higher margin travel, and it was a very, very strategic move for us, and we look. As Skroo said, we're looking to expand it into other markets. The share placement was really all about retaining our strong balance sheet.
We wanted to be certain of our funding for the acquisition, and it was decided that that was the best way to go. The SPP was important to let our shareholders participate in that capital raising, and there was very strong demand for it. As I said earlier, we upsized by 50% to try and cater for some of that demand. Certainly not all of it. Unfortunately, we couldn't. So no, no regrets on that. As far as the question on investment banking fees, someone did point out they were having a tough year, but it had nothing to do with that. It was really around... They provided a service, and they delivered the results, so they were entitled to what was a market fee on the transaction.
I think that answers that question for Mr. Mayne. Are there any other questions, Haydn?
No, I think we're done, Gary.
So, we do have one more question from the back of the room that I think I might have missed. So, could you stand, please?
Thank you, Mr. Chairman. I would like to thank you, your board, and your management for great job that you guys doing. But I come all the way from Sydney to ask three questions. Question number one: when you guys, not you, or your offices, will go back to service pre-COVID? Because at the moment, there's no service in any of your shops. Question number two is regarding the placement. I read the, all the prospectus, and there's nothing was mentioned about scale back. I tried to apply for all the placements that you offered, and then I was scaled back, like, 80%. Next time, when you do prospectus, please indicate what is your intention. Like other companies saying, "Look, we give one share for any two shares or three shares that you're holding." This way, I can manage my capital. I gave you money.
It was sitting for a couple couple months, sorry, for months, and then it just come back to my bank account, and I need to... Okay, so please answer these two, and then I will go to third one.
Okay, thank you for that. Sorry, what was your name?
Roman.
Roman, thank you for that. The first question is to service. Certainly coming out of COVID has been a very challenging time for us, just to meet the explosion of demand. I think our people have done an amazing job trying to deal with a really, really difficult time. Have we got it right a hundred percent of the time? No, clearly not. But to say that we have no service, I'd thoroughly dispute. So, we'll take that on board. Skroo, have you got anything to add to that one?
I think, I think Andrew Stark should answer this question, because this was a Flight Centre, was in New South Wales, I believe. So, Starky?
Stand up, stand up. Andrew is the head of our Flight Centre brand globally. Stark, just, just wait for the microphone, please, Andrew.
Thank you. Hi. We certainly, we've certainly tried our best over this pandemic. It's been hard for everyone, both our people and our customers. We pride ourselves on service. And we've recently actually launched an NPS score rating across the country, and our NPS sits at 50, versus our worthy rivals in this space at 26. So from a service perspective, I sort of, you know, agree with Gary. You know, we try our best. We probably don't meet the demands and asks all the time. We're pretty much human in this space, but we're certainly trying our best.
Thanks, Andrew. To your second question, David, can you respond to that one about the SPP scaleback?
Yeah, sure. Look, there's the scaleback possibility was flagged in the documentation that went with the SPP. I'll get you the reference for that, but that possibility was flagged. Unfortunately, the demand was so much, and we did upsize it from AUD 40 million to AUD 60 million to try and address those sort of concerns. But unfortunately, had we gone further with it, we would've been criticized for, you know, further dilution for taking capital that we didn't necessarily need.
So, you know, whilst the outcome might not have been what everyone would've liked, we tried to get that balance between, you know, making sure our retail shareholders were looked after, but making sure that we had certainty of funding up front, which is the reason why we did the placement. But I'll get you those references.
Thank you, David. Roman, you said you had one more?
Yep. It's fine. You just need to be more clear on the prospectus that there's possibility of scaleback, because I could not find. And last question is, Mr. Chairman, when we're going to back of our share price to pre-COVID levels?
Well, everyone in this room would love to see that. Bear in mind, the number of shares on issue have doubled, effectively have doubled, so the market cap of the company is very similar to what it was pre-COVID. There's just more shares on issue, and we all know the result of why that happened. So, our team are doing their best to drive profitability and growth right across all geographies. Just sit tight, and I'm sure we'll get there. Thank you, Roman.
Thank you very much.
As there are no further questions, that brings the meeting to a close. Very soon, I will close the voting on Items 1 to 3 , but before I do so, I'll pause the meeting to give shareholders a final opportunity to cast your votes. For those attending online, please submit your votes through the online platform. In-person attendees need to complete and lodge your blue voting cards in the ballot box. I'm gonna now pause the meeting for 1 minute, so you may finalize your votes. Okay, thank you, ladies and gentlemen. All voting is now closed. I see 1 gentleman is still filling his out, but we'll, we'll, allow that into the ballot box. The results for each agenda item will be tallied immediately following the meeting and released to the stock exchange later today.
Ladies and gentlemen, that being the end of all business, I thank you for your attendance and declare the meeting closed, and I invite you to join the board and senior executives for refreshments that will be served just outside this room. Thanks very much.