I would now like to hand the conference call over to Mr. Haydn Long, Investor Relations. Please go ahead.
Good morning, everyone. Thank you for dialing in today for our half year result announcement. I'm joined by the usual suspects, and you'll hear from them in the usual order. First up will be Adam Campbell, our CFO, and the GDS CEO, Chris Galanty, the head of the corporate business, calling in from the U.K., J.K., the Leisure CEO, and also Skroo, the Global MD. We'll also be joined by Greg Parker, the Head of Supply, and Mel Elf, the Head of Productive Operations, for the Q&A session after this. I'll now hand over to Adam.
Thank you, Haydn, and welcome everyone. I want to start this morning by briefly talking about what we see as being the key elements of our ongoing competitive advantage, which we would summarize under five broad headings, that you see on page 4 of the pack. Firstly, the enduring strength of our leading leisure and corporate brands, which is demonstrated by the ongoing resilient demand and record TPV being seen across both divisions through the half. Secondly, our ongoing innovation and proven ability to adapt to changing market conditions. This has been the case for many years as the industry has evolved, and more recently has been seen with the use of AI as an enabler of increased consultant productivity, reduced cost to serve, and the delivery of a more personalized and consistent customer experience.
Our diversified leisure offerings are also a competitive advantage, with recent examples being seen through the strong specialist brand growth, scaling digital channels, and accelerating momentum in the cruise and luxury segments. Our corporate growth engine, with its TPV and profit growth over recent years, and new revenue streams in payments, meeting events, and consulting services, also serve as an advantage to the group. Finally, our ongoing improvements in efficiency and productivity, with cost margins now well below pre-pandemic levels and a productivity uplift across the group, highlighted by a 13% improvement in our corporate businesses. These competitive advantages have combined to deliver what I believe to be a pretty strong result for the first half, and importantly, sets us up for a solid full year result in line with our current expectations.
Some of the financial highlights for the first half are shown on slide five, including TPV growth of 7% to AUD 12.5 billion, revenue increasing 6% to AUD 1.4 billion, underlying EBITDA increasing 9% to AUD 213 million, and underlying PBT increasing 4% to AUD 125 million. The difference between EBITDA and PBT growth was primarily due to much lower interest income being generated during the period, as official interest rates were reduced and our cash reserves were lower during the period due to our ongoing share buyback. As a result of this strong first half, we've seen an increase in today's declared interim dividends to AUD 0.12 per share, and an increase in EPS for the period to just over AUD 0.28 per share.
It is worth noting that trading conditions in the first half weren't all smooth sailing, with the volatility that we saw in the last quarter of 2025 continuing into the first quarter of this year, which makes the TPV and profit growth for the half stronger than they may look at face value. As Skroo will discuss later on the call, pleasingly, we've also seen this momentum continue through the early stages of the second half. During the period, we've also continued to invest in network enhancements, digital capabilities and AI, high growth sectors, and new revenue streams. Whilst our focus has been very much centered on the current year results, we've also continued to keep a strong eye on the evolution of our business for future years' success. Moving to slide 7.
Chris Galanty and J.K. are going to discuss their respective divisional results shortly. I won't spend a lot of time duplicating those comments. As you can see, though, Corporate's top-line growth of 6% converted to profit growth for the half of 20%, as the investments made over recent years in productivity and efficiency now start to flow through to operating leverage and the Asia business returns to profitability. Leisure's profit for the half is down on prior year, as we had expected. Their TPV grew at a faster rate in the second quarter than it did in the first quarter, and second quarter profits were also above the prior periods for that quarter. This momentum continued into early trading for the second half. At the end of January, the division's profits on a year-to-date basis were also once again above the prior year comparatives.
We've rebranded the old other segment to now be called our HQ segment. There's been no changes to what gets reported in the segment. It's just a name change to more accurately reflect the nature of the businesses and group services reported in there. That segment has increased reported losses this half, predominantly due to the lower interest income that I mentioned earlier, and that gets reported through that segment. As can be seen on slide 9, the business now that we now operate is very different to that from 6 or 7 years ago and continues to evolve. Our corporate TPV has moved from less than 40% of the group's total to now being the major contributor. Flight Centre brand contributed nearly a third of the group's TPV, now around a quarter.
Back then, we only had around 6% of Flight Centre's TPV transacted online, which is now approaching 20%. In the same time period, we've also reduced our underlying cost base and increased our productivity by over 60%, with TTV per FTE exceeding AUD 1 million for the first time ever during the first half of this year. Throughout this period of evolution and change, we've held certain core non-financial assets constant, which you can see on slide 10 of the pack. These assets have always been important to us and include brand equity and trust, customer loyalty and proprietary data, differentiated travel technology, people expertise to navigate complexity, and supplier relationships and access.
Whilst we've held these non-financial assets constant, we've also continued to innovate, including the development of both Sam and Mel in the corporate division and CoConsult in leisure, which was built on Anthropic technology, as well as partnering with leading AI innovators. I'll finish by talking two key areas of focus for us over the last few years: capital management and our ongoing portfolio simplification and strategic reallocation. On slide 12 of the deck, you'll see that from a capital management perspective, we've continued to actively manage our convertible notes on issue.
In the first half, we issued new longer-dated notes, AUD 450 million, which enabled the full retirement of the 2028 notes in May of this year, as well as a further reduction in the face value of the 2027 notes, and also the partial funding of the Iglu acquisition late last year. We've also continued our on-market share buyback of up to AUD 200 million, with AUD 126 million executed to date, retiring just under 10 million shares and enhancing our EPS. Finally, today, we've announced an increased AUD 0.12 per share, fully franked interim dividend. I should note that due to our utilization of carry forward losses, our final dividend for 2026 will likely be partially franked, and we will also likely revert to unfranked dividends for FY 2027.
As we regularly do, in light of the impending conclusion of our current share buyback process in May, our convertible note balances and our franking credit balance, we will review our future capital management strategy over the course of the second half. As you can see on slide 13, it's worth revisiting the outcomes of our ongoing portfolio simplification and strategic reallocation program, where we've seen the divestiture of non-core assets such as Cross Hotels during the first half of this year. The closure of underperforming businesses such as Discover Americas, Gogo, The Travel Junction, and StudentUniverse. Strategic pivots in businesses such as Topdeck, which is now small group-focused, and Liberty, which has been rebranded to Envoy Orange.
The acquisition of businesses with defensible moats in high growth sectors such as Iglu and Cruise Club in the cruise sector, and Scott Dunn in the luxury sector. Organic expansion in key sectors such as meetings and events, Stage and Screen, and energy and marine in the corporate division, and TA Reserves, Cruiseabout and CruiseHQ in the leisure division. I'll now hand over to Chris to give some more color around the performance of our corporate division.
Thanks, Adam. I'm very pleased to give some more details on what has been a very strong first half corporate performance, and encouragingly, we're seeing good momentum building in the second half as well. Before I do, I'd just like to reiterate a few points about our corporate business. Firstly, we continue to address the market with two world-class brands, Corporate Traveller in the SME space and SCM in the large global and enterprise space. We see this as a competitive advantage, as we think our customers have very different needs in these two different segments. Unlike virtually all of our competitors, we approach the market with distinct brands, which have separate management teams, different products, different pricing, different customer acquisition, and different service models. We believe avoiding this sort of typical one-size-fits-all approach gives us strong customer centricity and a competitive advantage.
These are two global businesses. As you know, we generate roughly a third of our TTV and revenue from Australia, New Zealand, EMEA, and the Americas, and roughly 10% from Asia. This global approach means we can build things globally, but address the market and the customers locally. We consider ourselves a people-led digital business, and what this means is we invest heavily in terms of both time and money and expertise in building world-class technology. This digital product is something our customers hugely value and is one of the reasons we continue to win and grow. However, behind that technology are our people, our culture, and it's important that whilst many of our competitors focus solely on technology, we very much believe in the dual benefit of people and technology to deliver value. Also a broadening revenue mix.
As we've been saying for the last couple of years, we're investing in new higher-end areas to deliver customer value and also generate revenue from ourselves. This includes things such as meetings and events, payment expense, consultancy, VIP travel, and some specialist travel sectors. This is all about deepening customer relationships as well as generating more value to ourselves. If you look at this Venn diagram, I think this sums this up quite clearly. We've all traditionally focused on travel management with our SCM and Corporate Traveller brands. Increasingly now, we're making heavy investments in our meetings and events capability. This is something we've always offered customers. We're investing to ensure that we can offer it all around the world and offer global customers M&E capability for the first time, right through from creative services through to managed meetings.
We also are focusing on professional services, things such as payment and expense, loyalty, consultancy. This means that these three different areas of expertise allow us to generate new revenue streams and give a more holistic experience to our customers. Our aim is really to deliver all three areas to all of our customers, certainly as many customers as possible. In the coming years, you're going to see more and more customers experience all three areas from us. We think this makes customers stickier, we think it improves retention, and we think it will obviously improve our economics as well. Getting back to those results that Adam touched on, I'm pleased to say we did deliver record TTV.
We've got a solid pipeline of new accounts secured at both across both brand and our meetings and events business, which means the momentum will continue to build for the rest of this year and into the next financial year. I'm pleased to say that CT, Corporate Traveller, is well on track to surpass AUD 5 billion of TTV for the first time ever this year, which makes it the largest SME-only TMC in the world. Particularly pleasing is the strong performance in Northern Hemisphere, with the USA in particular, our largest market opportunity, growing at 13%, which is great because it's a very competitive market. M&E and professional services contribute over 10% of our corporate revenue. It's a larger amount in SCM, and we see a huge opportunity to grow this in both brands in all four regions in the coming years.
Profit growth exceeded TTV growth quite considerably at 20%, this is really starting to show the scale benefits of what we've spoken about and we've called Productive Operations, which is our digital transformation. We expect to see further gains flowing from Productive Operations in the coming year. On the call, we have Mel Elf, who's our Global CIO and Managing Director of SCM, she led with her team, the Productive Operations initiative. I'm really pleased to say they've done a great job, and we're generating meaningful financial and operational benefits this first half. We expect to see further benefits as initiatives are embedded in the business, we're on track for full deployment of some of this key projects throughout by the end of this year.
Really, this is all about creating more automated workflow, and it's about delivering our customer-facing platforms, Melon in Corporate Traveller and SCM platform in SCM, and making sure that those platforms are fully integrated with our consultant operating platforms as well. It's about building a global operating model and platform for both brands, which gives us real economies of scale and consistency across the board. For our people, it means they only have to learn one system no matter where they work, which gives us a lot more flexibility in our workforce. It gives us much more streamlined processes across all of our markets. For customers, it gives them, and this is particularly important for SCM customers, much more consistency and quality across the board in all of our markets.
It does allow us, because we can configure these operating systems locally, to preserve our local expertise. For our business, it gives us economy of scale, which leads to efficiency. It reduces costs and complexity, but it still enables us to maintain our market agility. We are now seeing strong returns on this investment and compound productivity growth quarter by quarter, month by month, year by year. We can expect this to continue as the project comes to completion and we move into a phase of reoptimizing a global operating system rather than deploying it. It's been a big success, a lot of hard work from our people, and we've really tried to make this massive change, which I think is the biggest project in Flight Centre Travel Group's history, without any disruption to our customers.
Moving forward, what are the key growth drivers that we're focusing on? Well, firstly, our AI transformation, and unlike many of our competitors, we don't just see AI about having chatbots in the marketplace. We really see AI as a foundational technology, and I'm really pleased that our team had the foresight to invest in our AI Center of Excellence over 2 years ago, which has meant we do have a competitive lead in many areas. By foundational technology, what we mean is that AI is embedded in all of our platforms. Our customer-facing platforms now is the AI capability in Melon, and Sam is the capability in SCM platform, but also in all of the platforms we've deployed in Productive Operations, which means that this intelligence layer gives a much more personalized experience to our customers and a much more productive experience to our business.
We will continue to invest heavily in this, and we're getting great feedback from our customers. We'll also continue to invest in our global booking platforms, Melon in Corporate Traveller and SCM platform in SCM. It's really important that we design and control this digital experience because it gives us much more control over, obviously, customer experience, but also content access and productivity. We'll keep focusing on organic growth, investing heavily in SCM and corporate travel, marketing and sales to make sure we keep growing by winning new customers and retaining existing ones. However, we also want to invest more in accelerating new growth models.
As I said, meetings and events, specialist travels travel areas like Stage and Screen, which is our Corporate Traveller business that focuses on the performance area of music, sports, and entertainment, and of course, payment expense, which is a really important way that we can deliver more value to customers, but also more revenue for our business as well. We're calling out something called Brilliant Basics, which is really making sure that as we deploy this global operating system, we optimize it, which again, gives all the consistency and scale benefits, and this leads to productivity growth, more automation, which lowers cost per transaction, as well as improving customer experience. Finally, and most importantly, our people.
Every time I talk to customers, and I talk to customers pretty much every day of the week, they say to us that they like our technology and all the investments we're making. They enjoy using our products, but fundamentally, it's our people that make the difference. I think it is our people all around the world who contributed to this great result this year, and it's a testament to our culture, our belief in the value of technology and people that has made that true. I'm really pleased with the results, really pleased with the momentum building into the second half. On that note, I'll hand over to J.K. to give an update on our leisure business.
Thank you, Chris. Hi, everybody. Good morning. Well, to begin with, the leisure business, it looks very different to 5 years ago. We've really transformed from a shop-heavy, single channel-focused model to a diversified, digitally enabled business that's really built around 4 categories, which is mass market, luxury, specialist brands, and a range of independent brands, too. Each of these are now generating over AUD 1 billion in annual TTV, which shows great diversification. The portfolio model itself is really multi-channel by design, and we know that customers really choose brand or booking channel based on trip complexity, product offering, trust, and price. We saw our online sales grow 14% this half to almost AUD 900 million, which is now making up about 15% of sales overall. What this does is really frees up our stores and our call centers to handle high-value, complex work.
Turning to the numbers, well, Adam introduced some of the numbers, but to go a bit deeper, TTV was up 10% to just under AUD 6 billion, with all 4 categories growing. Revenue also grew 6% to AUD 690 million, and our underlying PBT was AUD 61 million, slightly below prior year's AUD 64 million, but it really reflects a few things. Firstly, the shift in mix in our business and the shift in destinations that we saw through shorter haul, more lower-margin international travel, as well as some front-loaded investments, sales staff, product design, technology, and stores, which we've previously flagged. The good news is, the mix is actually already reversing, and you'll see on the slide that in January, we delivered a record leisure profit, which was the strongest month in our company's history, which we're really proud of.
As you can see, TTV and profit are both tracking ahead on a year-to-date basis. Some of the call-out performers for the half were Scott Dunn in our luxury division. TTV was up 20%, and profit was up almost 80%, with all countries growing. The US has been a standout, and Asia is also performing as we expand into Hong Kong with the Scott Dunn brand. Our specialist category, you can also see the list on the slide there, has also grown with TTV up more than 30%. A real focus for us has been to grow in the cruise industry. With Iglu now underway with integration, we are on track to exceed AUD 2 billion in cruise TTV this year alone, and our ambition in this space is to become a leading global cruise seller.
We're building genuine scale here and some great capability, which you can see illustrated on the slide in terms of the numbers. Everything that I've described here really maps back to our three big moves, which is also on the slide. We've talked about these for some time. Flight Centre makes up about half of the leisure portfolio, and growing the core is very important to us. The brand's omni-channel model is really maturing, and the proof point here, which we're proud to actually share, is that the online channel has now delivered over a 2% PBT margin in January alone. This result is down to enhanced content that we've been investing in to make it available to our customers, as well as change commercials in this channel.
In fact, flightcentre.com now makes up about 50%, or just over 50% of our bookings are made online. That really shows that we've got a profitable digital business that is sitting alongside a high-touch retail network, and both are growing in basket size. Productivity is also growing, as well as Net Promoter Scores. Big move 2 for us in leisure is all about betting on winners. Firstly, I call these our margin engines, which is really luxury, cruise, tours, package holidays, and these are all high-margin, complex, and defensible business models. The Scott Dunn results speak for themselves, but in the Ignite business, you can see here that our packages model is really thriving. In fact, we sold about AUD 50 million worth of cruise in January alone, versus 2019, across a full year, we sold AUD 19 million.
This model has been one that we've been investing in a lot, and it's starting to pay dividends as we expand the model into the UK. When I look at our volume engines, the independent network is scaling across five markets. Our foreign exchange business, Travel Money, launched a wholesale offering, and that brand itself is up 46% in the half, as well as Jetmax, another low-cost OTA business, which is up 15% and PBT doubled. Big move number three for us is about launching and lifting loyalty. I'm really proud of the work the team have done to deliver WorldThreeSixty Rewards. It's now live across three brands: Flight Centre, Cruiseabout, and Travel Associates. This is an app-first program. It's integrated across a new CRM and loyalty management platform, and the early signs are really promising.
In fact, we're attracting about 54% of members that have either never booked with us or they haven't booked with us in the last three years. The largest cohort of members in the Flight Centre brand alone are those in the age of 20 to 29, which is really showing that it has broad appeal as a program, we're excited about more younger customers booking with our group. The launch partners include ANZ, Bupa, Caltex, and over 300 retail partners. This really is becoming a new engine of growth for Flight Centre, with a free and paid membership that will generate new revenue streams and give our customers more reasons to book with the group.
What connects all three moves is our investment in core platforms, data, and personalization, and this is where I believe we're building genuine competitive advantage. For the first time, we have a single customer view in leisure that is connecting retail, online, loyalty, and behavioral data in real time. We're capturing what our customers tell us what they want. We're also capturing the behavior on what they're likely to buy, and we're also seeing their profile with what much more rich information about what they can afford. This data is really proprietary to us. It deepens with every interaction, and we believe it's becoming increasingly difficult to replicate. Built on this dataset is our first AI co-consulting tool. It's live in the Flight Centre brand, and it's actually saving our consultants nearly 30 minutes per itinerary.
What it's doing, though, is surfacing personalized recommendations, it's ranking conversion likelihoods, and it fundamentally changes how our consultants work. As Adam mentioned, we're partnering with Anthropic, this is really going to accelerate AI across the group. Looking into the second half, a record January is already in the bank, which we're very happy about. Key investments that were front-loaded in the first half are covering 5 core areas. We've got more sales staff, new product lines, enhanced platforms, and well-positioned stores, as well as new commercial partners. I believe this sets us up nicely for a great upside in what we call our seasonal H2 peak. Leisure is on track for profit growth in FY 26, and we're well positioned now for a record second half TTV as well.
I just want to say a big shout-out and thanks to all of our people who have contributed to these great results. Over to you, Skroo.
Thank you, JK. Very good. Thanks, everyone, for joining us here today. Just as you heard from Adam, I think, I'm happy to reaffirm our FY26 guidance of AUD 315 million-AUD 350 million in underlying profits before tax. The midpoint of this is about AUD 332 and a half million. This represents 15% year-on-year growth and implies a 38%, 62% skew between first half, second half earnings. This is consistent with the trading patterns we typically see across the business in the past. As we enter this peak, trading period, the second half, we believe we're pretty well placed for the full financial year. As you heard, January delivered a record leisure profit in TTV, and importantly, both the leisure and corporate divisions are now tracking for year-on-year profit growth.
While some of this momentum will be partially offset by losses in global HQ, driven largely by those interest costs, the group's operational performance remains good. We continue to invest where we feel it matters. FY 2026 CapEx remains at about that AUD 85 million, aimed more towards systems and technology to drive scale, efficiency, and that long-term capability across the organization. We are, of course, continuing to open shops and growing physical teams in certain brands, certain locations, particularly where we feel underrepresented. At a macro level, underlying travel demand continues to be pretty good. According to IATA, global passenger traffic is expected to grow by nearly 5% this year, with APAC forecast to grow even faster at over 7%.
On the corporate side, 84% of global travel buyers expect their travel spend to hold or increase, reinforcing what we see as resilience in the category, and we see the opportunity for further expansion here. All of this gives us some pretty good confidence in the year ahead. This is because we've got strong brands, good momentum in corporate, differentiated some AI-driven profitability capabilities and a leisure portfolio positioned for sustainable, good quality growth. With these attributes, we believe we're well-placed to deliver on our FY26 targets and continue to build a stronger, more productive, more competitive Flight Centre Travel Group over the next few years.
As you've seen in our half-year results, Flight Centre Travel Group enters the second half with some pretty good momentum and a strong position that leaves us well-placed to benefit from our growth across our two core sectors, leisure and corporate travel. Our global model, and various well-trusted brands continue to show their strength. Even in a challenging trading environment, demand has remained resilient, and we've delivered some record TTV in the first half. That consistency speaks to these brands' enduring value and the effectiveness of our longer-term plans across both corporate and leisure. Our corporate business continues to outperform the market. We delivered record TTV and a significant profit uplift, supported by our operational performance, our significant productivity gains, and our new revenue streams beyond traditional travel management.
We're expanding into other areas, of course, such as payments, meetings and events, and consulting, broadening our relevance to clients, expanding our addressable markets, and giving us more revenues to capture growth as corporate travel generally continues to grow. Thirdly, we're embedding AI at scale across the group, creating real operational leverage as volumes grow. In corporate, AI is already handling millions of inquiries and supporting more consistent service delivery across the group. In leisure, our new CoConsult tools, saving consultants, as you heard, I think, from J.K., up to 30 minutes an itinerary. These gains allow us to effectively serve more customers, improve the speed and accuracy, and support margin growth as that holiday market grows. Finally, our diversified leisure business is building momentum.
Specialist categories are growing strongly, our digital channels continue to scale, the integration of Iglu is accelerating our cruise offering, one of the fastest-growing sectors globally. Combine this with our WorldThreeSixty Rewards program proposition, the leisure division is now positioned to deliver effective and profitable year-on-year profit growth. As the industry continues to grow, Flight Centre Travel Group is well placed to outperform. We have those strong brands, the corporate growth momentum, the differentiated AI-driven productivity capability, and of course, the diversified exposure to high-growth leisure segments. These advantages give us confidence in reaffirming that financial year 26 guidance and in our ability to continue delivering sustainable, profitable growth into the future. Thank you very much. Adam?
Thanks, Skroo. I think we're now ready for Q&A.
At this time, we'll begin the question-and-answer session. If you wish to ask a question, please press star and then 1 on your telephones and wait for your name to be announced. If you wish to cancel your request, please press star and 2. If you are on a speakerphone, we do ask that you please pick up your handset to ask your questions. Our first question comes from Michael Simotas from Jefferies. Please go ahead with your question.
Morning, everyone, and thanks for the presentation. Can I just start with productivity? I'd be interested in having the conversation across both corporate and leisure. There's been a lot of work done on productivity initiatives, and we can see it coming through the P&L. If you sort of looked at the programs that you've got underway, how much is in the P&L now versus how much is still to come?
Michael, I might-
Hi, Mike.
I might send that to Chris initially. I've got Mel Else sitting here with us as well, so Mel might have a few words to say. Chris, do you want to address the corporate side of that?
Thank you for the question, Michael. Obviously, we are seeing gains already, and that's largely because our staff numbers have been consistently coming down this year, while we've been growing turnover, revenue, and transactions. Look, I think we're confident we've got a lot of future benefit to come, and it comes from 2 main areas. One is, obviously, we win more business without adding staff. We get more self-serving through both Melon and FCM platforms, so customers can do more things themselves as we add more features. The work that Mel has been doing with Productive Operations and her team, we see more automation, whether it's robotics or AI. We think there's more to come, but, Mel, do you want to add a few words to that as well?
Yeah, look, I think, you know, as we continue to deploy the systems and start to optimize those systems, we'll not only get the benefits as we go through to future markets, but just optimizing the existing markets and getting our consultants more productive on new systems as well. We'll start to see, you know, more productivity gains there, and then also moving into our support businesses as well. They'll obviously support our front end, and that's our focus for the coming 12 months.
JK?
Yeah. Hi, Michael Simotas, J.K. here. Just to give you a view on leisure. Firstly, we have also grown productivity. Our TTV has grown 10%, and our employee benefits has not grown at the same growth rate, for a few reasons. One is actually, our employee benefits costs have actually uplifted, so we're not actually seeing it, materially-.
... benefit the PNL at this stage, but it's actually resulting more in cost avoidance to make sure that we don't need to grow our employee benefits at the same rate as what TTV is growing. We have been investing in staff numbers to generate sales, and as you know, this is really the period. The first half is when we invest. We've got over 100 new staff to be able to get ready for our peak H2.
Okay, great. Thank you. Maybe one on the corporate market for Chris. There's been a lot of change in the market with consolidation and some challenges faced by one of the competitors. Is that changing the competitive landscape, or do you think that benefit's still to come?
Well, they're separate things. I think the consolidation in the marketplace has been happening over many years, as I'm sure you know. The most recent big move was Amex GBT taking over CWT, and we think there's still some benefit there with more RFPs coming out this year. I think with the competitor, I think you're referring to, I mean, I suspect that there may be some opportunities still to come, certainly in the Australian market. Again, Mel, do you wanna have an Australian view? The reason I touch on Australia is we don't really come up against them very much in North America or Europe. Is anything to add there, Mel?
Yeah, look, you're right. We're not really seeing it, in a global space, but certainly here in Australia, we're starting to see a lot more RFP activity, a lot more inquiry, starting to see a bit of conversion. Yeah, there's definitely a heightened activity, over the past six months or so.
Okay, thank you. Can I just squeeze one quickly in on the, on the loyalty program, and just the setup costs? You've taken AUD 16 million below the line in the first half. It sounds like another AUD 10 million in the second half. Is that AUD 26 million it for the setup costs, and then it will just sort of fold into the leisure business, or should we expect more development over time there?
Look, it will mostly roll into the leisure business, as we go into the year ahead. There's a few caveats there, depending on how much we invest in new markets and other ventures as we expand the program, broadly, we expect it to roll into the leisure results next year.
Okay, thank you.
Our next question comes from Ben Gilbert, from Jarden. Please go ahead with your question.
Morning, team. Just following on from the corporate, how's the contract wins or the wins looking in terms of the run rate that you're at? Also just interested in sort of the ability to continue to ramp. Obviously, you've had a lot of wins over the last 12, 18 months, just that maturity profile from a margin standpoint in corporate.
Sure. Mel, do you want to start with FCM, and then I'll touch on Corporate Traveller?
Yeah, sure. We're actually ahead of where we were this time last year in terms of new wins, and that's certainly across both activity and bid volume coming through. We are actually starting to see a lot more activity in the market generally, which is helping our position. We're winning on value, not price at the moment. We're actually seeing that, you know, a lot of our solutions and a lot of our technology and positioning is really starting to resonate in the market. Yeah, we are doing well. Our pipeline is strong, so, you know, we still have a solid pipeline in play at the moment. Got a number of key active opportunities, which we hope we can see materialize within the next 6-12 months.
Yeah, we're definitely seeing more activity, which is positive.
In CT, look, it's a similar story. We've actually had a record first 6-month wins, and the good news is a lot of that's coming out of the North American market, which is We've always identified as our largest opportunity market, mainly U.S., but also Canada is important too. The great news for us really is that we're winning in that market, which is probably the most advanced with digital disruptors. The Melon product, which we've invested heavily in, is really holding its own against some of the new disruptors there. We're pretty pleased, actually. It's been a good first 6 months, and we do expect that to carry on into the second half.
Thanks. Second one for me, maybe for you, Adam. Just, can you just help us remind what you're cycling through in the second half? You've still got, what, AUD 5 million-AUD 10 million of the Asian ticketing piece from the PCP. I appreciate most that's washed in the first half. Liberation Day, I think that had a pretty material impact on your numbers sort of through April, and then obviously, the Middle East tensions in the June quarter really knocked around the overrides. I appreciate probably not going to be able to put numbers around all those, but just remind us just those comps, because they do, you do cycle over some easy periods in the second half.
Yeah, Ben, I mean, look, as you say, the key things that we're cycling against, first of all, Asia issues that we had, and they were relatively heavily weighted towards the second half. As you've seen in the first half results, we've, you know, we've pretty much got that back on track now. We have released about AUD 4.5 million, I think, Mel, of.
Mm-hmm
... of provisions that is sitting in that Asia results. Excluding that, the Asia segment overall was probably about AUD 1 million or thereabout, so a very small profit, but as we expected it to be. We probably expect the second half for Asia, excluding any further releases of provisions, to be about the same run rate. A small profit in that market. We've added some costs as we've stabilized the region, and, you know, it's also still relatively volatile, a bit softer market for us in that space. The Asia segment, we are expecting to be profitable, small profit, excluding the release of provisions. We're not expecting as high a release of provisions in the second half.
We have had to utilize some of those, as we've completed discussions with some of our customers and the like. Some we're holding there as well. I think it'll certainly be a positive for us in the second half for Asia, like for like. As you said, we saw that last quarter impacted by some external things like the ongoing impact of Liberation Day and the Mideast tension. That last quarter was pretty soft for us across the board. That did impact down on overrides. We are expecting, all things being equal, that we'll be comping against what wasn't a great final quarter for us.
April was pretty poor as well, wasn't it? You had a pretty material drop in the US on the back of Liberation Day.
Yeah, it started in April that we saw a lot of that impact coming through, and then really did continue through the last couple of months of the year.
It started a little bit earlier in some markets, too. I think Canada and the leisure business, they had their downturn sort of around January, February, when Trump first made his tariff comments. As Adam said, in Australia, it was more like April, we started to see it.
All right. Thanks, guys, appreciate it.
Our next question comes from Sam Sal from Citi. Please go ahead with your question.
Thanks. Morning, all. Maybe if I can just follow on and just dig into that fourth quarter 25 comp a little bit more. I mean, now, from our perspective, it looks like volumes are down, kind of like mid-to-high single digits. You know, you're telling us you had minimal overrides. Just wondering, was that fourth quarter 25, you know, actually loss-making for the business? Anything, you know, financially you can kind of give us as context.
No, it certainly wasn't loss-making. When we say we were, overrides were minimal, we do have guaranteed levels with our a lot of, most of our supplier agreements now. I think what we were talking to last quarter, in the last quarter of 2025, Sam, was we were pretty much operating at guaranteed minimum levels for those overrides. We just weren't seeing any uptick in them coming through. Not quite that we're not really getting the overrides, more that they were at that base level.
Sam, the business was significantly profitable in that fourth quarter. It's just fourth quarter is normally a very big quarter. The fourth quarter wasn't massively bigger than some of the others. Normally it would sort of swamp the other quarters.
Got it. That's helpful. When you talk about that weak fourth quarter, was it impacting the corporate or leisure business more?
We certainly saw it coming through in leisure. Was heavily impacted by it. A lot of that was due to those, you know, minimum guarantees in the overrides, but flowing from top line. Jack, do you want to talk to the impact on leisure?
Yeah, it was mostly leisure. We saw the biggest decline when April hit to the U.S., we dropped about 20% in volume in that month alone. May recovered a little bit, June dipped further. The biggest impact was literally what was happening from the U.S., we also had June, the political unrest that was happening in the Middle East, there was a few other things that happened. All things combined, it just meant that travel volume dipped down below expectations, we just didn't hit those override tiers in terms of the growth rates.
We still saw, Sam, people were traveling, but they shifted destinations.
Yeah.
That's when you started to see that Japan was already looking pretty popular, but Japan really took off at the same time as America started to drop off. I think if you look at outbound departures, I think you'll see that Japan is up about, say, 10%, and America's dropped about 10%. Not all of those people would have shifted, obviously, but you know, one's kind of gone through the roof and the other one's dropped off. With Japan, you know, a little bit closer to home out of Australia, obviously, and dominated by an airline like Jetstar, which doesn't necessarily pass as much as some of the other airlines would.
Got it. As we think about your guidance, you know, you've guided to. You're telling us there's a fairly weak comp, and you've given us a conservative skew compared to historic periods. Is there something that we're missing in the second half that's a headwind, or is it just you guys being a little bit conservative?
I think there's a couple of things. I think the second half comparative, I think we're looking at, what was it.
30, 62% of profit.
62% in the second half. I think that actually is probably more in line with expectations. It's been fluctuating a bit over the last few years, but it's probably more, more in line with what we might, you know, traditionally expect to see. I think that, certainly, from our perspective, we don't want to get ahead of ourselves. I think we need to actually see how things play out over the next couple of months because they are our busiest trading months. You know, there will always be things that move around in the world, and it's not totally settled out there at the moment.
Whilst we're seeing some good momentum, finishing off that first half, coming through January, I certainly don't think we should be getting too far ahead in terms of what's to come. There may be a bit of conservatism in there, but I think it's probably appropriate conservatism from us at the moment in terms of how we're looking at the business.
Yeah, just bear in mind too, mate, that.
We're only 4% up at the moment in profit, and to get to the midpoint, we've got to be 15% up. We are banking on an uptick already, and part of that is because we think we'll do better in the fourth quarter.
All right. Thanks, guys. Appreciate the call.
Thanks, sir.
Our next question comes from Damon Clackner from CLSA. Please go ahead with your question.
Hi, guys. Good morning. Just a couple of questions on the leisure business, please. So you called out, customer destination mix is improving into the second half. I think you mentioned a reversal in some of the trends you've seen between Japan and the U.S. Which other regions are driving this and which is still lagging? Are you continuing to see this more of a trading down, cost of living pressure effect, or are there other factors at play there? Then the second question, on the leisure business, the margin draft we've seen in the first half, can you give us a sense of how much of that was due to weaker super overrides versus some of that front-loaded OpEx investment that you were talking about? Thank you.
Sure. The recovery that we're seeing, and if you look at the month of January, we highlighted a record month, and that's attributable to a number of brands where we're seeing the likes of Scott Dunn. Their biggest month of the year is January, and they outperformed that month. We also, Scott Dunn has also seen travel returning to the U.S., and their U.S. business is also performing. We're quite pleased to see that luxury travelers are typically at the front of the recovery, and then you see the mass market follow soon after. Other destinations that are starting to open up more is we're seeing a lot of the return to Europe again, and Japan is still super popular. The U.S. is challenged from different markets, but Asia, more broadly speaking, is still very, very popular.
Our packages business that does a lot of long-haul travel, Ignite and so on, is really starting to take off as well. There's a lot of good positivity in a number of brands in the month of January that gives us good indication that we're starting to see a bit of the tide turning, but it hasn't turned fully, and we have certainly haven't seen the U.S. recover to the levels that we would like it to across the board. The second question about business mix is really the driver for the revenue drop in the first half.
To give some behind that, our lowest margin brands who have performed very strong in the first half, these are typically brands that make up less than 11% of revenue margin, and on a comparative basis, they shifted from about 34% of the profile and portfolio to about 38% in the first half. As a result of that, being lower margin brands, it really drove a significant shift in terms of revenue margin, coupled with the destination shift as well. We haven't really seen much of a softening in terms of overrides at all that gives us any concern, but we typically start to take up overrides more in the second half as we get more confident at hitting those next tiers in the various contracts.
Okay, thank you.
Our next question comes from Wei Wang Chen from RBC Capital Markets. Please go ahead with your question.
Hi, guys. Just sticking with leisure again. Interesting you guys called out a record leisure TTV and profits in January. I'm not sure if you've seen it as well, but Helloworld also this morning said that January was up 12% for them. Is your sense that a large part of these improvements are kind of macro or kind of cyclical factors rather than sort of, you know, self-driven factors such as, you know, improved marketing or conversion, et cetera?
Look, these things are always a blend of both. You know, when the macro swings in your favor and your business strategies are actually starting to take off and your investments that you've made are aligned, well, then arguably you should see by look, good management, good strategy. It's a combination of all of those things that's really driving performance. I think there's been a fair degree of, you know, there's always just volatility and uncertainty, but at the moment you can see that, January is that peak holiday period, and we've been investing to make sure that we can do our best in this month, and it paid off.
Yeah. Cool. Cool. Thanks. Apologies, I missed a lot of the initial presentation, but just the acquisition of Iglu, how's that going? I guess, is there any appetite for further acquisitions, at Flight Centre, either corporate or in the leisure segment?
On Iglu specifically, transaction closed 10 December, integration is going well so far. Their biggest months as well now are really that kind of January, February period. The U.K. market has, you know, they've been outperforming the market in those months, we're very happy with the, the engagement so far. It's still very early days, but we know it's a very good business, we've got good plans for the cruise category overall, as you'll see in the presentation pack. In terms of broader acquisitions, I might hand over to Skroo on that. Thoughts around broader acquisitions.
Thanks, James Kavanagh. Look, we won't be rushing into acquisitions, but in the areas that are doing well and, whether that's in specialist corporate areas or, in the leisure, you know, the luxury and, cruise type leisure, we're certainly looking at these. Yeah, we're obviously being reasonably cautious. There are macro issues.
... in various countries, you know, which, from Iran to what the administration's doing in America. We're modestly cautious at the moment, but we're certainly looking at some that fit those strategies that we are focused.
Yeah. Cool. Cool. Thanks. That's all for me.
Our next question comes from Brian Han from Morningstar. Please go ahead with your question.
In leisure, I'm not sure whether you've ever spoken about this, James, but what do you think the demographics of your leisure customers look like? I mean, is it more heavily skewed to all the cohorts who are, you know, sort of less hostage to economic volatility?
It's really mixed, Brian, across the portfolio, and it's also mixed by need state as to how customers are thinking about their holidays as to where they shop in the various channels. Broadly speaking, we haven't seen too much of a shift in terms of older demographics, and the average has been holding still for our Flight Centre brand, as an example. Offline in-store bookings is typically around that mid-fifties, whereas our online channel, which is one of the fastest-growing channels, is around that mid-forties. When we look at our luxury customers, Scott Dunn, as an example, the average age in that brand is actually mid-forties as well. We're actually attracting more and more younger customers with some of the latest investments in our loyalty program and so on.
We really look at all the various cohorts to make sure that we're designing the right product line, and we've got the best channels to be able to service those various demographics dependent on their need state. Because we think customers shop that way as opposed to, just thinking, "I'm a certain age group, and I only do X." It's not like that anymore. It's very much a case of need state, and we've got the right solution.
Thanks for that, James. Just, at the group level, on your portfolio simplification initiatives, is there a timetable you're working to in terms of divesting non-core and underperforming businesses?
Brian, it's Adam. No, there's not. I mean, we've been reviewing for the last couple of years, our businesses. It's an ongoing thing. I think it should be part of any business like ours with a, you know, fairly diverse range of businesses and portfolios. We, you know, we're looking to see always how best we can get the true value of those businesses coming through, and that could be through divestiture, like we did with Cross Hotels. It could be some rebranding, it could be organic growth, it could be M&A bolt-on, or it could just be, you know, holding the line with the strategy that we've got in play and organically growing those. There's not a timeline in place.
We've done most of that heavy lifting, though, I've got to say, over the last couple of years now. And we think that we're in a reasonable position, but it will be an ongoing piece of work that, you know, that Chris and his team in corporate do, that JK and the team in leisure do, and that us as a CEO group, with myself and Greg attached to them, will continue to do as well.
When you say non-core and underperforming businesses, are we still talking mostly in that HQ division, that you call it now, or are you talking across the other businesses, too?
Well, it's not just about non-core, and it's not just about underperforming. It's also how do we accelerate performance and get to the value that we believe into the businesses. no, we're looking at different brands and businesses through corporate, through leisure and in those HQ businesses as well, as to how we do that. an example of that is if you look at the cruise segment in leisure, you know, the acquisition of Iglu was a way to really enhance the growth there and to take us more quickly towards the value that we could see extracting out of that sector of the leisure business.
We've got other areas, meetings and events in corporate that we're, at the moment, organically, supercharging to try and grow and extract the value from as well. There's a bit of a mixture. It's not just about those businesses that are so-called underperforming. It's also how do we accelerate performance?
Thanks, Adam.
Our next question comes from John O'Shea from Ord Minnett. Please go ahead with your question.
Morning, guys. Can you hear me okay?
Not really, John. You're very quiet.
Oh, thanks, mate. I'll speak up a bit more. Is that better?
Yeah, we can hear you definitely.
Yeah.
That's fine. Just a question, and I may have missed some of this early on, but directionally, where do you see the revenue margin going for the business in the second half and into FY27? Obviously, revenue margin down a couple %, in the period, but not a couple %, but, you know, 13 basis points. Where do you see it heading directionally?
I'd like to get JK and Chris to talk about from a corporate and leisure perspective. JK, do you want to kick off?
Yeah. Across the portfolio, if I take the brand by brand view, John, I expect revenue margin to lift, and that's typically the second half is our highest margin, broadly speaking. The mix, though, will depend on which brands perform the fastest rate in the second half.
We do expect to see an uplift in revenue margin in H2 versus H1.
Yep. Thanks a lot.
I think, John, from a corporate perspective, our revenue margin was flat for the first six months. It was the same as versus last year. I don't really expect to see much change. I think revenue margin is holding, which is good as we grow. Really, we see net margin improvements through productivity, but probably reasonably consistent revenue margin.
Thank you very much, guys.
Our next question comes from Alex McLean, from Evans and Partners. Please go ahead with your question.
Morning, team. I just had a question on the Iglu business that you bought. You basically gave an implied EBITDA earnings base when you took over the business in December, and there was some uncertainty around where it would wash out at the PBT level. Do you have a better sense for where that sits now that you've had it, I guess, in the portfolio for a couple of months now?
Yeah, I might, okay, I might start off and hand over to J.K. We obviously, when we bought the business, we increased our guidance at the same time, that predominantly reflected the contribution we thought Iglu would make, that's obviously based on underlying PBT. We also, you know, we're seeing some reasonably positive trends in the business as well, so potentially a little bit of movement there, captured within our, within our, you know, our overall range. The PBT uplift of AUD 10 million, we felt that that would cover the PBT range that the business would deliver. As you said, it was a little bit difficult to work out.
The business also loses money in December, which we knew about, and then makes a lot of money in January and February, and that's the way it's panned out so far. I might let J.K. talk to you about expectations, so.
Yeah. That's pretty much the expectations, as Haydn has covered it. It's really just making sure that they perform the plan and things are going okay so far.
Okay. Then maybe while I've got you, JK, just attachment rates in the leisure business, are you seeing any improvement there with what you're doing, rolling out AI to your frontline agents?
We have actually. Yeah, we've rolled out quite a few new solutions, and it's been quite positive. You can imagine the last half, we've been heavily testing a whole range of initiatives that have been AI-generated. A lot of them have been in POC, proof of concept stage, and then as we've scaled up quite a few, we've seen an uplift, particularly with our novices, in terms of attachment and conversion, more so in some of the bookings. I have to say, it's too early to tell in terms of forecasting into our numbers as to what the uplift has been. It's showing some positive trends in terms of just some of the conversion rates and also accommodation rates in terms of prompting things like next best action with hotels and that for our consultants to be able to convert more.
Early signs are promising. We'll be able to share more next time we speak.
Okay. That's great. Thanks, guys.
Yeah.
Once again, if you would like to ask a question, please press star and then 1 on your telephone and wait for your name to be announced. Our next question comes from Belinda Moore from Morgans. Please go ahead with your question.
Hi, team Flight Centre. J.K., if I could ask you, this leisure uplift you've seen of 4%, in January, I mean, that obviously includes Iglu. What would the base business be doing ex that, please? For Adam, how should we think about the full year loss from I know you've changed the name today, but from that division, please?
First question, we swung over into year-to-date growth, excluding Iglu, and then, if we add Iglu onto it, then it's just extended out to the 4% lift.
I think, Belinda, just to clarify, I think the 4% is year to date, correct? Yeah, the 4% wasn't the swing in January. It's gone. It was 4% down at the end of the half, and by the end of January, it's actually up 4%, so the swing is a little bit bigger.
Great. Thank you.
Belinda, just in relation to the other segment or the HQ segment, I think from memory, we did about AUD 75 million PBT loss in that business last year. I'd expect interest to continue to be a headwind for us in the second half at a similar run rate to what we saw in the first half. That could change, obviously, if we see some changes in interest rates over the next couple of months. That's my initial expectations.
Outside of that, other costs, we're certainly gonna be investing another AUD 2 million in technology, in the second half, but that should start to be offset by a lot of the changes we've put in place in terms of changing operating model, that we've been investing in the first half through both our enterprise technology business, and also more broadly through GBS. At a gut feel, I would suggest that including interest, being up, you're probably looking at around about an AUD 90 million-AUD 95 million loss for that HQ segment for the full year.
Thank you.
Our next question comes from Tim Plumbe from UBS. Please go ahead with your question.
Hi, guys. Sorry, most of my questions have been asked, I might throw a different one in there. Following on from the Asia losses, guys in the corporate business, if we looked at the corporate-
Sorry, Tim. Excuse me, Tim, can we ask you to speak up a little bit? It's very soft.
Bit muffled, mate. Asia, you were talking about?
Yeah, sorry, guys.
Yeah
... Asia into the corporate business. If we thought about the corporate underlying PBT growth, do we just take off the AUD 4 million provision that's been released? Or can you talk to what the kind of growth in corporate PBT was ex-Asia?
Sure. Yeah.
Yeah.
You know, Sorry, you go, Adam.
No, no, you're right, Chris. You go for it.
On our PBT growth, most of it actually came out of, it wasn't really Asia. Asia contributed some, but a lot of it came out of Australia, New Zealand, the Americas, and particularly the Corporate Traveller business in the Americas. Asia contributed about AUD 4 million of the release there, but some of the other Asia improvements came just from operational improvements as well. Yes, Asia contributed, but it certainly wasn't the lion's share of the contribution.
Got it. Thank you.
In showing no additional questions at this time, I would like to turn the floor back over to Mr. Campbell for any closing remarks.
Hayden impersonating Adam. Just thanks, everyone, for dialing in. Thanks for your time today. I know it's very busy for a lot of you. Shoot us through any other questions that you have, and we'll try and get back to you as quickly as we can. We'll see a few of you over the next few days. Thank you very much.