Shares in Flight Centre take dive

SHARES in Flight Centre have plunged despite the bookings business recording a double-digit rise in full-year profit after achieving record transaction volumes.

Net profit climbed 13.9 per cent to $262.9 million for the year to June, Flight Centre reported yesterday.

Underlying profit, which strips out one-offs such as asset sales or writedowns, hit a record $384.7 million, at the upper end of its $360 million$385 million forecast range.

“The company’s record results highlight its business model’s strength, its ongoing relevance to customers globally and its increasing diversity,” managing director Graham Turner said.

Revenue rose 6.5 per cent to $2.95 billion. The Americas, Europe, the Middle East and Africa generated about 40 per cent of underlying profit. Profit in the Americas more than doubled.

“This is a promising sign for the future, given the size of these markets – particularly in corporate travel – and our relatively small market share,” Mr Turner said. “While there is still work to be done in the leisure sector, we are also starting to see some positive signs, with the Canada and US leisure businesses profitable for the first time since financial year 2011 and 2012, respectively.”

Australia and New Zealand posted slower than normal transaction growth of 4 per cent. Shares in the group tumbled more than 8 per cent.

The final dividend of $1.07, was up from 94¢ a year earlier.

UBS analysts said the result was “good” but of “mixed quality” with the international performance strong but Australia below expectations.

Flight Centre was in the media spotlight on Wednesday, with the ABC running a critical story about its alleged business practices and culture. AAP