Flight Centre lifts guidance

06-FlightCentre_signage_2Shares in Flight Centre have lifted by about eight per cent after the travel agency group improved its full-year earnings outlook.

Flight Centre expects its underlying profit before tax to land between $325 million and $330 million for the 12 months to June 30, compared with previous guidance of $300 million to $330 million.

The latest guidance is in line with its original forecast, which was amended after a challenging first half.

Shares in Flight Centre was up 7.83per cent or $3.12 to $43.08 by 1040 AEST.

Flight Centre said it has experienced strong sales and profit growth in the second half, underpinned by significant growth from its North America business.

The travel group’s USA business is on track for a record second half profit and there has been a significant rise in its business in Canada compared to the pior year.

Its Australian and New Zealand business has benefited from strong sales volumes.

Flight Centre managing director Graham Turner said average international airfare prices in Australia, which were down seven per cent in the first half due to widespread discounting, had improved to be closer in line with the prior corresponding period.

This has led to stronger revenue and total transaction value growth.

“While we always aim to improve on the prior year result, our achievements during the second half reflect a solid recovery after a challenging first half, which saw a combination of internal and external factors affect results,” Mr Turner said.

He said the company is focused on lifting sales volumes to offset a decline in international airfare prices, increasing productivity, reducing costs, and to make it easier for customers to do business with the company.

Despite ongoing political uncertainty in the UK, as a minority government navigates a split from the European Union, the group’s UK business is expected to deliver another record profit in local currency.

However, significant falls in the British pound’s value in the past year will negatively affect its conversion into Australian dollars.

Flight Centre’s full-year results are due to be released on August 24.


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