Greener on other side

Flight Centre’s international profits boost

FLIGHT Centre expects its international businesses to boost the group’s first-half performance, helping offset weaker Australian operations.

Speaking at the travel agency’s annual meeting yesterday, managing director Graham Turner said the group was expecting an underlying profit – a tally which excludes “one offs” – of $120 million to $135 million before tax for the six months to December.

That would be up 6 per cent to 19 per cent from the same period a year earlier.

The company is forecasting a full-year result of between $350 million and $380 million, for an increase of up to 15.6 per cent on the past financial year.

It is the first forecast Flight Centre has given for this financial year.

“In Australia, we currently expect first-half profit will be slightly down on last year, while we make some important system changes within the business,” Mr Turner said.

The outlook for the second half of the year in Australia was brighter, he said.

“At the moment, our focus is on training our people and embedding the new system, rather than replacing any departing leisure travel staff.”

Flight Centre says it is looking to expand its online leisure travel operation, corporate travel management business and in-destination travel experience operations, such as tour operator Top Deck, in which it has an investment.

Mr Turner said Flight Centre’s corporate businesses in the United States and Canada were driving profit for the company in the region, whereas the leisure and wholesale travel sectors were proving more challenging.

Flight Centre’s North American businesses were responsible for generating about 10 per cent of the company’s overall profit last year, and were performing well so far this financial year, Mr Turner said.

Operations in Europe, the UK, South Africa, Namibia, and the United Arab Emirates were delivering solid profit growth this year, he said, after making about 13.5 per cent of Flight Centre’s overall profit last year.

Flight Centre’s Asian operations returned to a modest profit in the first quarter after recording a loss last year, and corporate travel in New Zealand has also performed well.