FLIGHT CENTRE HITS NEW HIGH

Written on the 3 July 2013

FLIGHT CENTRE HITS NEW HIGH

FLIGHT Centre (ASX:FLT) pre-tax profit for FY13 is expected to ascend to another record altitude, with the company expecting a 17 per cent rise on the previous year.

The group is expecting an underlying profit before tax (PBT) of between $338 million and $342 million, up from the record $290.4 million PBT achieved in FY12, it announced to the market today.

“When we upgraded our initial guidance in early May, we reported that our 10 countries were profitable and that several were on track for record results,” says FLT managing director Graham Turner (pictured) in an announcement.

“This positive momentum continued through the key May-June period, which ensured all businesses finished the year in profit (EBIT) for the third consecutive year.”

FLT has been a market darling over the past 12 months, announcing a series of record profit announcements and almost doubling its share price from $20 in that time. This morning the company’s shares were trading up 0.48 per cent at $39.490 per unit.

Australia and the UK, which generate 80 per cent of the company’s global sales, surpassed their previous profit records, along with the emerging Greater China and Singapore businesses.

FLT’s Australian leisure travel business performed strongly during the second half, to offset a softer domestic corporate market, while leisure tourism was also a strong driver of the UK result.

In contrast, the US corporate business is surging, outperforming both the leisure and wholesale businesses, generating 40 per cent of sales.

“The USA, which is now our second-largest country by sales, delivered its third consecutive profit and should finish slightly up on 2011/12, when it contributed $9.9 million EBIT,” says Turner.

FLT is planning to expand its US operations and in the medium term expects to add four locations to its American presence, which already spreads over 15 cities.

Three new hyperstores – in Boston, Chicago and Philadelphia – featuring flagship Liberty leisure shops are also expected to open during 2013/14, following the successful launch of the first store in Manhattan’s Madison Avenue in October.

Turner says New Zealand, South Africa and India generated solid year-on-year growth, while Canada and Dubai delivered healthy sales growth and were profitable, but bottom-line results were down compared to last year.

The company will release its full-year results on August 27.


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