Flight Centre hits new heights
Flight Centre managing director Graham Turner will pocket a dividend for the year of almost $21 million after the travel company he founded delivered another record profit.
Shares in Flight Centre soared almost 9 per cent to a record high of $48.41 following a 23 per cent rise in annual net profit to $246 million and the prospect of double-digit earnings growth in the year ahead.
Defying expectations about the threat posed by the internet, Australia's largest travel agency has forecast a rise of between 8 per cent and 12 per cent in pre-tax earnings for the new financial year to as much as $385 million.
Flight Centre will pay a final fully franked dividend of 91¢ on October 18, compared with 71¢ in the same period a year earlier. It takes the payout for the full year to $1.37.
It means Mr Turner, whose private company Gainsdale is the second-largest shareholder, will have pocketed total dividend payments of almost $21 million this year. He also received a salary package of $883,304.
The travel company's pre-tax profit of $349 million was better than it forecast at the start of July. Revenue rose almost 9 per cent to $1.985 billion as sales increased in both leisure and corporate travel.
Mr Turner said the leisure travel business in Australia performed strongly - especially in the second half - helping to more than offset softer corporate travel results.
Flight Centre derives nearly 70 per cent of its earnings from Australia. Pre-tax earnings from its UK business - its second largest after Australia - have doubled over the past two years to $32 million.
While it had been a solid start in July and August, Mr Turner said it was still difficult to predict the travel market in the new financial year. Flight Centre has two small acquisition targets on its radar but he emphasised that its main focus would be boosting its existing businesses.
Mr Turner also warned that Flight Centre might have to make goodwill impairments on its businesses in India and the US in 2013-14. Flight Centre made it clear that its long-term focus would remain on increasing dividend yields rather than making one-off distributions to shareholders.
Qantas-backed Jetset Travelworld posted an 8 per cent rise in pre-tax earnings to $55 million for the year but warned that the cost of rolling out its new Helloworld brand will crimp pre-tax earnings in the new financial year.
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