FLIGHT Centre (ASX:FLT) is jetting towards another record profit result after reporting a strong start to the new financial year at the annual general meeting in Brisbane.
The travel company's pre-tax profit forecast is expected to be in the range of $380 million to $395 million, an improvement of up to 8 per cent of $366.3 million in FY15.
The guidance excludes the $11 million returned to the company following its court victory over the ACCC which alleged the company had engaged in price-fixing with airlines.
Flight Centre managing director Graham Turner (pictured) says the company has performed in line with expectations, despite subdued conditions in the outbound travel market.
He says government figures released this week indicate the number of travellers heading overseas increased 2.3 per cent during the first quarter of FY16.
"The weaker Australian dollar does not appear to have turned Australians away from America, with short-term departures to the States growing at more than three times this rate during the same period," Turner says.
"Within our business, both leisure and corporate travel turnover has increased at a slightly higher rate than the outbound travel growth rate.
"We are, of course, a lead indicator of outbound given that we recognise our revenue when the customer has paid in full, which is obviously well before he or she travels and becomes an outbound departure statistic."
Turner says there are some positive signs in the market, including solid customer enquiries, cheaper airfares compared to a year ago and healthy competition between airlines.
Flight Centre has a renewed focus in Asia, outlining a host of new Top Deck tours and acquisitions in the region. The company has also secured commercial agreements with Scoot and Air Asia, as well as a deal with Tiger to be finalised soon.
"In terms of growth drivers for this year, returning the Australian leisure business to its traditional growth trajectory is an obvious opportunity," Turner says.
"To achieve this, we are doing things like broadening our offerings by developing new revenue streams and product lines.
"We're also expanding our footprint, particularly in sectors that are performing well like foreign exchange and cruising."
In a bid to boost total transactions, Flight Centre also plans to grow its global salesforce with another 1000 jobs.
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support