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Flight Centre Travel Group (ASX: FLT) has gone full throttle on its cruise operations in Europe with the acquisition of Iglu, one of the UK’s biggest operators in the sector, in a deal worth up to £127 million ($255 million).
The Iglu deal will boost the total transaction value (TTV) of Flight Centre’s cruise business to more than $2 billion annually, two years ahead of schedule, while also creating opportunities to expand into the US and other high-growth markets.
London-based Iglu, which was established in 1998, currently accounts for more than 15 per cent of UK cruise bookings and more than 75 per cent of online bookings, and while the cruise sector represents 90 per cent of its total bookings, Iglu Ski accounts for the rest.
Flight Centre is acquiring the business from UK private equity investor LDC, Beauport Partners and founder Richard Downs, which the Brisbane-based travel group says ends “a transformational 10-year partnership to create the UK’s leading cruise online travel agency”.
The acquisition, which settles today, comprises an upfront payment of £100 million ($200.6 million), plus £27 million ($54.2 million) in performance-based earnouts.
Flight Centre has accompanied the acquisition announcement with an upgrade to its forecast underlying profit before tax for FY26 to $315-$350 million – up from $305-$340 million previously.
“This acquisition delivers immediate shareholder value through EPS (earnings per share) accretion and is a game-changer in terms of the future opportunities it unlocks in the global cruise market,” says Flight Centre managing director Graham Turner.
“Iglu brings a strong brand and a scalable technology platform that aligns with FLT’s strategic objectives.”
Flight Centre says the acquisition significantly expands its cruise footprint, while delivering scale, advanced technology and broader access to the UK market, which is the world’s third largest in the cruise sector.
The company notes that the fast-growing sector has driven sales at both Flight Centre and Iglu up by 15 to 20 per cent year on year.
Iglu is running at a higher margin than Flight Centre’s cruise operations with a 3.1 per cent EBITDA margin in FY25 compared with Flight Centre’s 2.2 per cent for its leisure division which includes luxury travel operator Scott Dunn and Cruise Club UK.
The acquisition is expected to deliver £14.8 million ($29.7 million) in adjusted EBITDA from about £450 million ($902.8 million) in TTV during FY26.
With Iglu’s full-year contribution to Flight Centre’s cruise-based TTV set to almost double to more than $2 billion on an annualised basis, Flight Centre is now targeting $3 billion in TTV from cruise operations by FY28.
Iglu CEO David Gooch will remain with the business following settlement, working within Flight Centre’s global leisure division under CEO James Kavanagh.
“This opens up significant future growth opportunities, allowing us to scale our operations while maintaining the unique identity that has made us successful,” says Gooch.
“By leveraging Iglu’s world-leading ecommerce platform alongside Flight Centre’s global experience, we are perfectly positioned to capture market share.
“Most importantly, the strong cultural fit between our businesses gives me great confidence that we will continue to deliver exceptional value to our customers and people."
Shares in Flight Centre were trading 96c, or 6.9 per cent, higher at $14.93 at 10.40am (AEDT).
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