Flight Centre looks overseas for growth
Flight Centre is looking to its international businesses to boost its performance this financial year, as the travel company expects first-half profit for its Australian operations to be slightly down on last year.
Managing director Graham Turner told the company’s annual general meeting on Thursday that Flight Centre expects its full-year result will be between $350 million and $380 million for the 2017/18 financial year, up 6.2-15.6 per cent on last year.
Underlying first-half profit before tax was tracking towards $120 million to $135 million, with stronger performing operations in Asia, New Zealand, North America, Europe, the UK and South Africa, Turner said.
“We weren’t particularly happy with last year’s results, although it was pleasing to deliver an underlying PBT in the order of $330million and another year of record TTV in a fairly challenging trading climate,” said Turner.
“While external factors had a significant impact, particularly during the first half, market conditions were not solely to blame for our inability to deliver a record profit to match our record sales.
“Some of our businesses simply did not deliver the results that were expected of them.”
Turner described 2017 as a story of two halves, with the company encountering strong headwinds early in the year, but finishing reasonably well.
“Results in New Zealand have been fairly good, particularly in corporate travel, while the Australian corporate business has also performed reasonably well.”
Second half PBT increased 4.7 per cent after being down 22.4 per cent during the first half; and second half TTV increased 6.4 per cent, after being up just 1.8 per cent during the first half.
“Although it is still early days in the new year, our businesses generally are performing well and are tracking towards a $120million to $135million underlying first half PBT. If achieved, this will represent 6 per cent to 19 per cent growth on the $113.2million underlying PBT recorded during the first half of last year.
“It will also set us up for a solid full year result, which we expect will be between $350million and $380million for the 2018 fiscal year.”
Turner added further changes are inevitable in response to market conditions while the company looks to take advantage of what it calls ‘the golden era for travel’, characterised by cheaper flights and improved services.