HOLD Flight Cen­tre

The In­tel­li­gent In­vestor, James Green­halgh

Money Magazine Australia - - IN BRIEF -

Af­ter a shocker of a first half, who would have thought Flight Cen­tre could hit man­age­ment’s ag­gres­sive earn­ings guid­ance? Well, it just did.

Flight Cen­tre is one of the world’s largest travel re­tail­ers, has a rapidly grow­ing cor­po­rate travel busi­ness and is branching out into “in-des­ti­na­tion travel ex­pe­ri­ences” such as tours and even ho­tel man­age­ment. Air­fare de­fla­tion in the first half mod­er­ated in the sec­ond, while the com­pany has en­gaged in some self-help by ef­fec­tively manag­ing costs and im­prov­ing staff pro­duc­tiv­ity. As a re­sult, it re­cently an­nounced that it would earn around $2.25 a share in 2017, close to the top end of man­age­ment’s guid­ance.

The man­age­ment re­mains first-rate and con­tin­ues to run the com­pany with the next two decades in mind rather than the next two years, some- thing that we ap­prove of. It is also re­mains well placed to deal with on­line com­pe­ti­tion. Un­for­tu­nately, the re­cent good news means the com­pany is too ex­pen­sive for us to con­sider up­grad­ing to buy.

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.