Flight Centre upgrades profit guidance

Flight Centre upgrades profit guidance
By admin


A strong start to the second half of its financial year has prompted Flight Centre to raise its profit expectation as it predicted a record year for several of its global businesses.

Based on 10 months of trading results, the retailer has raised its underlying profit before tax (PBT) expectation from the initial $305-315 million target to $325-340 million.

The new figure marks an increase of between 12% and 17% on last year's result of $290.4 million PBT.

Managing director Graham Turner revealed that PBT had risen 8% in the first half, with the second half seeing a strong start.

"Year-to-date, our 10 countries are profitable and several are on track for record full year EBIT contributions," he said.

Turner confirmed this applies to both Australia and the UK – the firm's "largest profit generators".

"In Australia, the leisure business has rebounded during the second half to more than offset a slightly softer domestic corporate travel market," he said.

Despite the "challenging" local trading environment, Turner said the UK is on track to deliver more than GBP 20 million in earnings before interest and tax, exceeding its 2011/12 record by more than 30%.

Its US business is expected to deliver its third consecutive full year profit.

However, India, Canada and Dubai, although solid, are not expected to see the same levels of success.

Meanwhile, Flight Centre is preparing to unveil phase three of its new blended model in Australia which will see the launch of a "fully integrated offering" which allows customers to switch between sales channels at any stage of the travel planning or booking process.

It has already introduced website capabilities that allow customers to enquire, pay for and view travel itineraries online rather than in-store or over the phone, along with the addition of more product and services, including international flights and hotels, to its online offering.

"The enhancements that are now in place take away some of the pain points that customers traditionally experience when they plan and book travel," Turner said.

"The end product will be a fully integrated new-age service that combines the best features of both the on and offline travel models."

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