A HIGH Australian dollar and bolstered balance sheet helped Flight Centre Limited (FLT) exceed expectations during the December half, with $51.5 million net profit after tax.
Managing director Graham Turner, says while economic recovery has not yet gained significant momentum elsewhere, the Australian side of FLT has driven profit growth for a solid start in FY10.
“Leisure results have been good, particularly in Australia, where cheap fares have stimulated demand and consumer confidence appears to have rebounded fastest,” says the company founder.
“Profit has increased significantly in comparison to last year, both in our shops and in our online businesses.
“In corporate travel, we have continued to offset the effects of client downtrading by winning new accounts, which should allow us to benefit when companies return to normal business patterns.”
FLT has also introduced its Corporate Traveller brand to target local and national accounts, supplementing multinational-targeting subsidiary FCm Travel solutions.
A direct-contracting model has seen positive results for FLT’s wholesale travel business, as a key contributor to growth.
“While challenges remain, our fundamentals are strong as we enter the next phase of our evolution,” says Turner.
“We have emerged from the difficulties we faced last year with a stronger sales force, stronger brand offerings catering for most market niches, a leaner cost base and a stronger balance sheet.
“Looking ahead, we see continued growth and improvement opportunities, particularly in corporate and wholesale travel and in niche leisure market areas.”
Turner believes ticket prices will continue to rise moderately in the short to medium term, lifting from the ‘unsustainable fares’ seen last year.
He offers a full year pre-tax profit guidance between $160 million and $180 million.
Managing director: Graham Turner
Market capitalisation: $1.8 billion
Revenue ’09: $1.7 billion
Profit ’09: $38.1 million
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