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Flight Centre upgrades profit guidance


Flight Centre's international business has taken off, helping to lift the travel agency's first-half profit and prompting an upgrade of its full-year forecast.

Net profit of $102.2 million in the six months to December was up 37 per cent on the previous corresponding period, as it processed a record number of transactions, at improved margins.

Managing director Graham Turner said a better than expected half year performance had led Flight Centre to upgrade its forecast for annual pre-tax profit growth to between nine and 15 per cent on 2016/17.

"Given the strategic progress we have made and our positive start to the year, we now believe that our profit will finish slightly higher than initially expected and we have adjusted our guidance accordingly," he said.

Flight Centre shares were up $5.42, or 10.8 per cent, at an all-time high of $55.49 at 1525 AEDT.

Flight Centre's total transaction value, the amount its customers pay for flights and other travel services, rose nine per cent from a year ago to $10.2 billion.

Its Australian and New Zealand businesses generated $5.9 billion of TTV, up four per cent, but it was its businesses in the Americas, Europe, the Middle East and Asia that generated the strongest growth.

"For the first time, the US business was profitable during the seasonally-softer first-half, while the Canada business continued its strong improvement trajectory," Mr Turner said.

Flight Centre's Asian operations returned to profit after two years of losses.

He said the company was making progress with its consolidation and transformation strategies that have aided revenue growth and cut costs.


* Half-year net profit up 37.2pct to $102.2m

* Revenue up 5.4pct to $1.4b

* Fully franked interim dividend up 15 cents to 60 cents