Profits down $100m for Flight Centre

TRAVEL agency Flight Centre recorded a $38.2 million profit for 08/09 – a fall of almost $100 million from 07/08, with results affected by $38 million in losses in the US, as well as non-recurring impairments and write-downs.

Flight Centre (FLT) managing director Graham Turner (pictured), says the company will aim for a pre-tax profit of more than $125 million this year, compared to $99.8 million in 08/09.

“While FLT has not yet seen conducive evidence of a full recovery, the company has started the year with some positive momentum from the fourth quarter, particularly in the US, and has achieved encouraging trading results in July and August,” says Turner.

“Cheap airfares and holiday deals have started to stimulate demand, which has led to improving sales volumes, albeit at lower than normal yields.”

In banking and finance, Suncorp-Metway's share price dropped by a modest 3.3 per cent this morning as the company recorded a 40 per cent fall in profits in 2008/09, following a disastrous year for the company’s insurance arm.

With a net profit after tax of $348 million, the full year profit before tax and the acquisition of insurance company Promina Group was $799 million. The company warned investors earlier this month that net profit would fall to $340m-$360m.

Acting CEO Chris Skilton, says Suncorp (SUN) has significantly adapted its business model in response to market challenges, but the board takes responsibility for poor financial results. Patrick Snowball will take over as CEO next week.

“We acknowledge and we take responsibility for the fact that shareholders will find the headline financial result disappointing, but it was also a year in which the group made considerable progress in reshaping each of our businesses,” says Skilton.

Chairman John Story, says that despite solid underlying performance, each of Suncorp’s businesses were impacted by an unfavourable environment, which has been the most volatile in Australian financial services history.

But while Suncorp delivered a 40 per cent fall in profits, internet cable provider Pipe Networks Limited (PWK) did just the opposite, with a 46 per cent increase after tax.

CEO Bevan Slattery, says the strong result is testament to a sound business model underpinned by growing demand, long term annuity contracts, investment in high growth assets and a continued focus on customer service.

“Whilst the company undertook some large capital investment programs over the past five years, shareholder returns have been our number one priority,” he says.

Earlier this year Slattery told Brisbane Business News how an undersea cable from Sydney to Guam would cut international internet connectivity costs in half. The PPC-1 Cable is expected to be launched October 8.

Energy Developments Limited (ENE) recorded a 4 per cent rise in after tax profit to $18.8 million, with Collection House Limited (CLH) recording the same percentage rise in pre-tax profit to $10.5 million. However, after tax profit fell by 36 per cent.

CLH shares have rallied by 9.3 per cent today to $0.53, PWK shares rose 3 per cent higher this morning but have since flattened out to $4.90, FLT shares have dropped 1.5 per cent to $13.07

ENE shares have increased by 1.2 per cent to $2.53 and SUN shares are now at $7.48.