FLIGHT CENTRE SOARS

Written on the 26 February 2013

FLIGHT CENTRE SOARS

Flight centre (FLT) has recorded a record half-year profit to December as its corporate and online businesses grow.

Net profit after tax is up 13 per cent on the previous corresponding period to $91.8 million, while EBITDA (earnings before interest, tax, depreciation and amortisation) was up 8 per cent to $148.9 million.

Despite the news, FLT shares were trading 3 per cent down this morning at $31.32 on a difficult trading day.

FLT enjoyed record results in Australia, the United Kingdom, Greater China and Singapore.

It lowered its debt while increasing its cash balance, taking the company to a $273 million positive net debt position at December 31.

The company is marginally ahead of targeted full year growth rate after eight months and is targeting $305-$315 million profit before tax (PBT).

“Globally, the corporate businesses turned over more than $2 billion, with the Australian business contributing more than $1 billion for the first time during a first half,” says company founder and managing director Graham Turner (pictured).

“These figures, which do not include sales generated by FCm’s licensee network in 70 other countries, highlight the company’s emergence as Australia’s largest corporate travel manager and one of the world’s leading players in this sector.”

FLT grew online sales 23 per cent and is on track to deliver EBIT in this area of $5 million.

The company tracked at the top end of its guidance range at the end of the first half andas a result, expects profit before tax for the eight months to February 28 to be about 10 per cent up on the corresponding period last year.

It will target a PBT of between $305 million and $315 million for the full year.

“While FLT is currently ahead of its full-year growth target, maintaining 10 per cent profit before tax growth will become more challenging as the year progresses and as the company tracks against its largest profit months,” says Turner.

“FLT is, however, well placed to build on the foundations that are in place.”

The company will put 20 new sales teams in place by June 30 to focus on first and business class travel, round-the-world flights, small corporate accounts (Flight Centre Business), group and online travel.

The company expects Australia the UK and USA to remain its key growth drivers for the foreseeable future.

FLT will pay a dividend of 46 cents per share, up 12 per cent from 41 cents.


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